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SOA & WOA: Article

Building a Modern SOA: Examining Offshoring All Over Again

Had a Bad Experience? Maybe You Were Too Hasty. Don't Repeat the Mistake

The word “offshoring” and its sibling “outsourcing” can provoke instant, righteous anger among some people, while being touted as a one-size-fits-all panacea by others. The recent decade or so of outsourcing and offshoring—particularly to India within the IT business—has generated copious case studies, best practices, and worst practices.

Everyone has a story to tell, or several, and debate ranges on within companies and on the pages of websites, magazines, and books as to whether The Grand India Experiment will ultimately succeed or fail. But now’s not the time for grand theories. It is time instead to focus on what is smart and what is doable.

Smart and doable does not mean reflexive, though. “In tough economic times, it’s easy enough to fall prey to the desire to cut costs at all costs,” said one of several IT executives interviewed for this story, an executive at a software company. “More offshoring springs immediately to mind. Bulk up your India operation, in a country where you can still hire five or six people for the price of a single person in Silicon Valley.”

Yet “hasty offshoring does not work,” in the succint words of Paul Brown, and ironically, India’s tech areas have been among the earliest and hardest hit victims of the global financial debacle that begin in September 2008. A significant part of this business was driven by the financial services industry, so as contracts expired and markets became turbulent—ie, as things hit the fan--these companies and their employees felt the pain.

So rather than leap into some quick-fix notion of offshoring—or leap away from it based on past frustration—take a look at the middle ground, using offshoring in a practical fashion. “Take the hybrid approach of integrating serious offshoring programs with local teams,” said one executive who manages a global development and professional services team. “When you deploy round-the-clock ‘tag teams,’ locally and in India, you will succed. Do a bit of offshoring to achieve 24/7 functionality.”

“Engage lower cost partners,” says one exec interviewed for this story, “and be sure to bring in a blend of subject matter experts.” Take an end-to-end lifecycle management approach—rather than simply an end-to-end process view--with an overall goal of lowering TCO while delivering projects on time.

In essence, if a company consciously views itself as streamlining, rather than killing, projects, it can aim for cost leadership and innovative business processes. In doing so, it removes some percentage of business risk from its projects and initiatives.

Gartner analyst Sondergaard offered several specific areas for companies to consider in their IT planning in this environment. Some were general principles such as cost optimization, IT modernization, workforce management, and multi-sourcing. Others referred to specific technological approaches, such as virtualization, business intelligence, SOA and BPM, and low-carbon (aka “green”) IT.

More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.