Though its well-known, acknowledged old news, every once in a while the "real" cost savings from outsourcing makes headlines. That it may take "research" to derive the obvious, common sense, conclusion is quite baffling.
This research proves that the promise of massive operational savings is unrealistic when you take into account the costs of procurement and ongoing contract management.
One small detail that researchers don't seem to uncover is the role that fear of unemployment plays. Most places I have consulted typically have a local resource that acts as the lead developer and designer - the number of such resources is proportional to the size, "presumed complexity," and budget of the project. More often than not, these individuals act as a major bottleneck in the process and play havoc with planned expenses.
The typical lead developer/designer (from my experience) has not had an opportunity to keep up with latest technology because they were too busy trying to keep their jobs. The technology skills they have are at least ten years too old and will not be any use to them once they lose their current job. It does not help that they are in their late 30s, sometimes early 40s - the twilight zone of a development career in IT.
Their modus operandi on outsourced projects is to provide minimal information upfront to the team offsite and zero oversight through the development and testing cycles. When at last all is done, they begin complaining bitterly about the abominable end product that they now have to work overtime to fix and render acceptable.
I have heard the line "The offshore code sucks so bad that it needs a full re-write" more times than I remember. Clueless middle management does not recognize that code cutting is not rocket science and that, if the lead developer/designer had done their job, code would be the least of anyone's concerns. Instead, they have this person work overtime to "fix" what should not have been broken to begin with. Not once does anyone question why they had not anticipated the extent of damage until the final product was delivered. Is that not their role ?
After all is said and done, everyone bemoans the lack of savings from the deal, powers-that-be proceed to switch vendors to remediate the situation and researchers write up thesis on the failed promises of outsourcing. In failing to take the human element of the problem into account, everyone gets it wrong and we as consumers pay for expensive mistakes.
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