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Still deciding????!!!!
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OK, you are still reading. In this post I want to write about how off-shoring won't really save you money; or at least, not be worth the little money you do save.
Let's say that an average programmer in the US earns 100.000 U$S per annum (it's a bit high, I know, but I don't want to get into statistics and such). The off-shored programmer will make a third of that, let's say 33.333 U$S. Now you need someone to manage off-shorers' administrative tasks (like time-tracking, cost-tracking, etc.). Let's be optimistic and say that you will need 1 person in the U$S for each 40 off-shorers. And certainly, off-shorers will have the equivalent of system analysis, but you don't want them to interact directly with your customer. So for very 3 programmers you need an extra analyst. Your 33K are now 46.900.
Certainly, all that long distance communication is not easy (TANSTAAFL); so you are bound to have make mistakes here and there (or maybe from you staff waking up at 5 AM to manage to get these people late in their business hours); if your error rate increases by 20%, you will need 20% more developers AND 20% more testers (your testers are in the US, aren't they? Otherwise, Quis custodiet ipsos custodes?); even if they don't charge you for bug fixing, it will be in the bill somehow. Your costs are near 76K now. And what about the delays? Are they free? (not in my world). Let's assume it is just a 5% of the overall cost (I don't want to be pessimistic), so we have just crossed the 80K barrier.
Finally, your off-shorer will want to have some earnings (damn bastards!). With a 10% margin, it will be something like 85K. Are 15% savings worth the bad reputation, being dependent on external parties and not really knowing your own product?
Not in my book.
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