Good balanced NY Times story on outsourcing and offshoring to India:
Only certain kinds of tasks can be outsourced — what can be set down as a set of rules," said Nariman Behravesh, chief economist of Global Insight, a forecasting and consulting firm based in Waltham, Mass. "That which requires more creativity is more difficult to manage at a distance.
A typical challenge is the difficulty of finding programmers overseas who can go beyond following well-known procedures to the next steps of identifying problems and creating new solutions.
Takeaway: Want to be stay competitive and stand out from the pack? Be creative! Keep in mind the ultimate objective is to solve compelling and burning issues for businesses and society. Writing software or handling a customer account are means to the higher end. Strive to add value.
...ultimately gave up on outsourcing because the Indian company that it worked with could not deal with the fast-changing requirements.
Indian engineers and software designers in this country know that the businesses whose needs are driving technological innovation are mostly in the United States. It comes down to being where the customers are.
When outsourcing fails, he said, it is typically because "less disciplined" businesses try to farm out projects that are not properly defined.
But Mr. Pradhan agreed that the need for proximity to the final user of the technology does place limits on what types of tasks can be outsourced. "Whenever the pace of innovation is very rapid," he said, "is when the work should be done closer to the client."
Takeway: These (and more) reasons are the reasons I am a big advocate for agile software development processes, including the most well-known version called Extreme Programming, or XP. It's the ideal type of process for business requirements that change and evolve (know any that don't?), builds in frequent customer feedback to ensure the project meets customer needs and focuses on working software that delivers business value within an robust iterative process. (In my own personal experience, I nixed offshore engineering because I didn't have the bandwidth to create highly detailed specifications that I feel comfortable that were fairly fixed and manage the project frictionlessly.)
What cannot be sent to India, he said, is the invention of new business processes and technologies.
Takeaway: These are important core tasks for any company. One of my favorite Peter Drucker quote is: "A business only has two functions. Marketing and innovation. Marketing and innovation make money, everything else is a cost." And I'm with Geoffrey Moore that you don't outsource your core function(s).
Such distinctions are why even the champions of India's programmers-for-hire industry are trying to do more work within the United States. This month, for instance, Infosys announced that it would spend $20 million to set up a consulting company in the United States.
Takeway: Being close to the customers (I'll grant you being close doesn't mean you listen to them -- so take advantage of the proximity to your customer) and their fast-changing requirements matters. And it's not a zero-sum game. I predict more jobs will be created across the board at a global level and it's definitely time to be a creative-class professional wherever you live in the world.