Going Local vs Going Global when Outsourcing

I did a presentation called “A Cheap Date with Cloud Computing” at the a French Chamber of Commerce event last Thursday .

During the presentation I made an off the cuff comment about staying away from Irish outsourcing companies because they were too expensive. This comment was reported by Chris Horn which elicited some responses online.

Twitter is not a good medium for debate so I thought I would clarify my comments.

  1. Irish web design/dev shops are more expensive than overseas suppliers and they all seem to get business, so more power to them.  This is free market economics at its best.
  2. Overseas is not just India/China. You can find good, low cost developers much closer to home within two or three timezones of Ireland
  3. The tech requirements for the audience at The French Chamber of Commerce (primarily SMEs and mostly non tech sector) is limited in scope and doesn’t require high powered (i.e. expensive) design skills or code cutting capability

If you are building genuinely novel software for a new or emerging market using agile techniques then there is some argument for going local because proximity to your development team is a key  requirement.

However even in those projects a significant amount of “grunt” work is required (building wordpress themes, connecting payment engines, porting software to different platforms etc.). This work is an ideal candidate for outsourcing and Odesk and Elance do an excellent job of providing a marketplace for lowering the cost of these activities.

As for design work, well I will never ever source startup logos from anywhere other than 99designs.com, end of.

One thought on “Going Local vs Going Global when Outsourcing

  1. Hi Joe –

    Rather disappointingly, there isn’t really much I’d disagree with there. I myself use eLance for design work. We hire a fantastic South African designer who is only 1 time zone away from Ireland and has a European sense of design that works great for us.

    I also recently launched my first 99design competition and got a whopping 225 responses.

    For SME’s, this type of tactic is a winner for someone who is willing to put in a little extra leg work. It also makes sense that Irish companies strive to compete. A 99design competition carries a fairly hefty reward not too disimilar to what you might pay a designer here for a similar service. Many Irish software development houses and design agencies are simply outsourcing the work on the back end in any case.

    As you pointed out, when it comes to building world class products, it is hard to imagine an outsourced team working as hard or as long as a local team that has a true connection with their client and is aligned towards the same goals. To be honest, I’m not sure if it is really possible to reconcile the ‘per hour’ motivation of any outsourced agent and the product focus of an internal team. I do look on with regret at several Irish entrepreneurs I have seen spend serious money on building excellent applications only to find out that another 3x the investment would be needed to tweak and maneuver the product into what would ultimately become successful.

    In the Holy Land (aka: Silicon Valley) they also contend with sky high developer costs. While rates are high, it is also my perception that there are plenty of engineers around looking for an opportunity to invest their time in return for meaningful equity. This type of arrangement does align motivation in the right way. The difference between there and here is, that there are plenty of templates for success to emulate. It isn’t to difficult to meet an ex-engineer who has made a fortune in a startup in the valley, while it is pretty rare in Dublin.

    Twitter debates are difficult, but rather entertaining all the same. Keep up the good work.



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