FLiP and Outsourcing: A Guide to Survival

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FLiP and Outsourcing A Guide to Survival

• Hal Helms
• halhelms.com

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What we'll cover

• What are the forces behind outsourcing?
• What are effective strategies?
• What is FLiP?
• How can it help us in terms of outsourcing?

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Outsourcing facts

• In the past 3 years, the number of offshore
  programming jobs has tripled, from 27,000 to more
  than 80,000 according to Forrester Research
• Average pay for offshore talent 20 of what it
  is for North American programmers
• According to Gartner Group, software produced
  overseas is not only cheaper, but better as
  measured by the Capability Maturity Model (CMM)
• CMM 4 US 41, Overseas 59
• CMM 5 US 17, Overseas 83

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Outsourcing facts

• Indian software exports have topped 10
  billion/yr and are growing at 30 annually
• Efforts to legislate against outsourcing, while
  politically popular, are seldom effective since
  large outsourcing companies (IBM, EDS, GE) are
  multi-national corporations
• 80 of outsourcing is currently done in India,
  but other nations are scrambling to create
  offshore industries
• Still, America's unemployment rate is 5.7, the
  envy of France with 9.3 and Germany with 9.0,
  and even Canada with 6.8
• Cold comfort for those whose livelihoods are
  impacted

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Outsourcing facts

• In August of 2003, the price per hour/programmer
  in India was 22/hr. Of the 44K generated, the
  programmer kept 10-11K/yr
• By the end of 2004, 1 in 10 IT jobs will have
  been moved offshore
• In 2003, 68 of IT execs responding to a CIO
  magazine survey said their offshoring will be
  increasing while 30 said it would remain the
  same. You can do the math for the amount of jobs
  returning to the US
• The CIO survey found that 11 percent of the
  companies had outsourced system and architecture
  planning offshore, and 14 percent had outsourced
  research and developmenttwo categories that
  analysts and chief information officers have
  predicted would never leave these shores.

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Forces towards outsourcing

• Enrollment in undergrad computer science programs
  is in slight decline while demand increases
• The belief by many thought leaders in the
  programming community that programming is an art
  form rather than an engineering discipline

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Will Work for Rupees US jobs are fleeing
overseas...
                                
United StatesGDP per capita 35,060Unemployment
rate 5.8Labor force 141.8 millionPopulation
below the poverty line 13Typical salary for a
programmer 70,000 ... and heading to the
subcontinent ...
                                
IndiaGDP per capita 480 Unemployment rate
8.8Labor force 406 millionPopulation below the
poverty line 25Typical salary for a programmer
8,000 Top 5 US Employers in IndiaGeneral
Electric 17,800 employeesHewlett-Packard 11,000
employeesIBM 6,000 employeesAmerican Express
4,000 employeesDell 3,800 employees
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The skills line
Low
High
Technical skills
Survival
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The skills matrix
Strong Project skills
Project management
Project architect
Survival
Consider a career in the arts
Outsourcing
Weak Project skills
Weak technical skills
Strong technical skills
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Forces opposed to outsourcing

• Language differences
• Culture differences
• The time zone issue
• Upward pressure on salaries in o/s countries
• Loss of critical expertise
• Degradation of service quality
• Loss of intellectual property and control over
  proprietary data

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Quotes/facts

• While pay for basic application development has
  plummeted 17.5 in the past two years, according
  to Foote Partners, a consultant in New Canaan,
  Conn., U.S. project managers have seen their pay
  rise an average of 14.3 since 2002.
• rentacoder.com
• Outsourcing will put downward pressure on
  programming jobs that remain here

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Quotes/facts
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Education

• The half-life of engineering knowledgethe time
  it takes for something to become obsoleteis from
  7 to 2.5 years
• William Wulf, Pres. National Academy of
  Engineering
• Pragmatic programmers recommend an education
  investment plan, similar to a financial
  investment plan
• invest a minimum amount per month
• plan time in advance
• have a plan for what you'll be studying

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To learn more

• Books
• The Inmates Are Running the Asylum by Alan Cooper
• The Goal by Eli Goldratt
• Any of Edwards Demings books
• Any of Tom DeMarcos books
• Training/Mentoring
• Project Success with FLiP by Hal Helms, Inc.