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Author: NorthCarolinaKen Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 38  
Subject: Re: Checkpoint Date: 1/13/2004 10:17 AM
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This is a good conversation guys. I have outsourced a lot over the past few years and I'm probably as expert as any with the process. The first thing the outsourcer has to get is that the costs will be greater during the first year. There are some exceptions to that but generally you have to run your staff and the Indian folks in parallel until they are up to speed and the process is working. Outsourcing is a strategic decision, not a short term cost savings. Second is that you must have Indian engineers on site. Distance and communication are the big issues in outsourcing.

So what does this mean in terms of investment? I think outsourcing is a long term deal and I expect it to expand. I have had one bad experience that I had to fix (the vendor claimed he had expertise and then attempted to develop it on the fly) but mostly my experiences have been excellent as has the rest of the industry's.

Two exceptions to strategic long term savings were with HCL, another extremely competent Indian development house, and Wipro. In both cases they had spare expertise in technologies that I wanted to put into maintenance mode to free my staff for the next generation products. I had already outsourced a similar product to HCL so startup time was zero. I did insist on two engineers on site for the first few months and dropped it back to one full time. Wipro took about three months to pick up a product and take it into maintenance. It happened that one of the world's authorities in the technology worked for Wipro and was available.

Infosys is great with application level stuff as is Tata Consulting. Deep kernel expertise, however is with HCL and Wipro. These are very expert engineers, the best, brightest, most trained and experienced.

Ken
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