It's hardly news when India's Tata Consultancy Services (TCS) opens a new outsourcing facility, unless it happens to be in Ohio.

TCS, one of the world's top hired guns for corporate IT and back-office services, opened its first U.S. software development center in a suburb of Cincinnati on Mar. 16. And it's hardly alone. Rivals including Accenture and India's Wipro are pursuing similar ventures in unexpected places around the U.S., from Oregon to Arizona to Georgia.

Make no mistake. There's still plenty of money to be saved by shipping work to far-away places with cheaper labor. Yet the economics of outsourcing are changing: With wages rising sharply in India and the dollar's value sliding against the Indian rupee, "there's been a 30% change in cost over the last year," says Andy Singleton, chief executive of Assembla, a company that organizes distributed software development teams. Three years ago, it didn't make sense for Assembla to hire anyone in the U.S. because labor costs were so low in India. But now, "as costs change, we end up with a lot more Americans," Singleton says.

Niche Opportunities for the U.S.

While India is still a great deal for many companies that want to cut costs on high-tech workers, some experts predict the labor savings there could evaporate in 5 to 10 years. That has spurred some interest in lower-cost labor markets in the U.S. "We've seen quite a few small, rural sourcing projects," says Doug Brown, partner of Brown-Wilson Group, an outsourcing consultancy.

If nothing else, these new IT facilities in unexpected places provide an intriguing alternative to Silicon Valley and other pricey high-tech hotbeds. A July, 2007, report from the Information Technology Association of America (ITAA) estimated that midsize metropolitan areas and rural communities could provide a 30% cost savings over top-tier IT hubs in the U.S. The report acknowledged that overseas outsourcing is here to stay, but stressed there might be a niche opportunities in low-cost domestic outsourcing.

Tata says it opened the new software center in Milford, about 16 miles northeast of Cincinnati, because it is trying to be more global and it also wanted to show its commitment to the U.S. The facility is expected to employ up to 1,000 people. "People have criticized the Indian outsourcing industry as exporting people and not investing in the U.S.," says Gabriel Rozman, executive vice-president of emerging markets at TCS. Cheaper Cost of Living

Rozman says TCS chose Milford in part because of its proximity to customers in the Midwest and on East Coast, as well as its strong talent pool. It also helps that the cost of living in the greater Cincinnati area is nearly 10% below the national average, according to the American Chamber of Commerce Researchers Assn. (ACCRA). And compared to Silicon Valley, the cost of living is 42% lower.

The notion that lower-cost U.S. markets might be ripe for outsourcing businesses began percolating a few years back. Accenture (ACN), which already had considerable outsourcing operations in major U.S. markets, announced a five-year deal in late 2006 to manage Cayuse Technologies, an outsourcing business started by the Umatilla tribes on a reservation in Northeast Oregon (BusinessWeek, 11/6/06).

Kathy Brittain White latched onto the idea even earlier, starting Rural Sourcing in Durham, N.C., and Jonesboro, Ark., back in 2004. "Why do we have to go offshore when there are many areas in the U.S. where there are good universities and 50% less cost of living?" asks Brittain White. The cost of living in Jonesboro is 45% lower than in Silicon Valley and 13% below the national average, according to the ACCRA.

Shortage of Talent

It wasn't until more recently, though, that foreign outsourcing firms began setting up shop in the U.S. Aside from TCS, India's Wipro announced in August, 2007, that it would open a global software development center in Atlanta with plans to hire 500 workers. Brown says his firm has done some site evaluations in the rural Southwest around Phoenix and Albuquerque for foreign companies interested in starting outsourcing operations in the U.S.

But one big obstacle to this trend is the limited availability of highly skilled IT professionals, according to the ITAA report. AT&T (T), for example, had trouble finding talent when it agreed to move 5,000 jobs back to the U.S. from India, forcing the company to set up a training program (BusinessWeek.com, 10/11/07).

At least one outsourcing firm in the Cincinnati area is concerned that Tata will boost competition for talent. "I will certainly now have competition that I'll run up against [in recruiting]," says John Bostick, chief executive of dbaDirect, a database outsourcing firm. DbaDirect is located in Florence, Ky., about 30 miles from the Tata's new center. Still, Bostick says he's happy to welcome TCS to the neighborhood. "Inevitably it will help the economy by bringing capital to the area."

King is a writer for BusinessWeek.com in San Francisco .

The new office in Rome will enable the company to build its European client base following a number of recent successes across the continent.

This expansion puts LINK Development in the privileged position of being one of very few Egyptian IT companies serving the European market - a trend that is steadily growing as Egypt's IT potential gains more exposure on a global level.

The company is a world-class provider of e-solutions with a focus on portals & intranets, e-commerce, Enterprise Integration, Microsoft CRM implementations, Helpdesk Solutions, Unified communications and IPTV.

Furthermore, it has built substantial experience in the telecom sector, developing value-added services such as messaging and collaboration services, IPTV and digital rights management.

As one of the largest software development houses in the Middle East and North Africa region, LINK Development has built an unrivalled portfolio of award-winning work and a substantial client base in countries as diverse as Egypt, UAE, Saudi Arabia, Bahrain, Oman, Kuwait, Algeria and in Africa Mauritius, Kenya and Malawi.

Having achieved this position at the forefront of the industry in the region, the company set its sights to entering the European market and has consequently studied its requirements over the past few years.

In order to build its profile in the continent, active participation in leading European trade shows has been on the company's agenda, with Cebit being a major platform for exposure for the company in the last three years. It has already begun building a European customer base, having recently delivered large offshore development projects to Greece and Italy.

The company has also worked in partnership with Microsoft over the last ten years, and has been a Microsoft Gold Certified Partner in five competency areas for more than eight years.

Its continuous focus on training and certification has enabled it to achieve ISO 9001:2000 and CMMI Level 3 certifications, and to have more than half of Microsoft's Most Valued Professionals (MVPs) in Egypt.

The skills of its 270-strong team of software professionals cover areas from software development and design to project management and quality engineering.

In addition, the team's skills combine the strengths of software development with creative design - two areas in which the company continues to build its talent and capabilities - thus enabling the company to deliver complete e-business solutions.

According to Abdel Meguid, the growing interest from European companies stems from Egypt being in closer geographical proximity, and therefore has smaller time differences, than its Asian counterpart India.

In addition, English and French are commonly used languages in the country's IT circle, which removes the hurdle of multilingual communication and enables a better understanding of cultures.

'More importantly, with IT becoming a booming industry in the country, Egypt is able to offer a broad base of professionals skilled in software development with international certifications,' says Abdel Meguid.

'With the company's large resources, breadth of scope and strength of expertise and skills, I believe LINK Development is very well placed to succeed in this market,' she concludes.

Research and Markets (http://www.researchandmarkets.com/reports/c79470) has announced the addition of “China Software Industry Report, 2007-2008” to their offering.

The operating revenue of China software industry reached RMB378.499 billion in the first three quarters of 2007, up 23.6 percent compared to the same period last year and being higher than the growth rate of 20.1 percent for electronic information industry.

Since 2006, the Ministry of Information and relevant Ministries have issued a series of policies to support the development of large well-known software enterprises. With the increasing saturation of informatization demand by large enterprises, the informatization demand of medium and small sized enterprises will be the new market growth. According to our forecast, the investment into the information construction of medium-small sized enterprises will be up to US$15.87 billion by 2010. As the agriculture tax, animal husbandry tax and tax on special agricultural products have been cancelled, the disposable income of farmers increases considerably. With the further opening of agriculture, the growth of farmers' income and the progression of urbanization, information construction in rural areas will be the new potential of the market.

It is the handsome profit model and the demand for informatization that conduce to the fast development of China software industry. Chinese manufacturers have comparative advantages in software service and mixed profit model. Based on market scale, profit margin and comparative advantages, we are confident about the development of software outsourcing and management software pattern.

In 1H 2007, China's offshore outsourcing revenue amounted to RMB6.53 billion. The annual compound growth rate in the coming five years can be up to 37.9 percent. Since application, strict barriers characterize software and being quite attractive to users, the famous related enterprises will be exceedingly developed. The steady supply of rich qualified talents in China secures the strong growth of China's offshore outsourcing business.

Chinese management software market is gradually entering the maturity period, and the cooperation and acquisition become trends. There is steady rising of market concentration. The endogenous growth of profit model, barriers, scale economy and positive feedback effect of management software industry result in that the large companies will grow ever larger. We believe that the manufacturers with self-developed products, rich experience and client resources will possess comparative advantages, and the advantages of leading enterprises and special product enterprises will be obvious.

One of the pillars of modern India, and one the country is relying on to complete its transformation from an economic backwater to a global superpower, is its IT industry.

From humble beginnings the industry has grown beyond what anyone imagined 20 years ago. It is currently worth about US$47 billion, or about 5.4 per cent of India's gross domestic product, and is still growing at about 30 per cent per year. It employs 1.6 million people directly, and many more indirectly.

Its phenomenal growth has led India to take IT to heart as a national industry, and everyday Indians have a real sense of pride now that its large tech companies are rivalling the established IT giants like IBM. This is proof to them that India can play and win on the global stage.

India's first IT company was Tata Consultancy Services (TCS), which sprang into life in 1968 as an offshoot of the giant Tata group. The industry was virtually nonexistent until the 1980s, when India's low labour costs and many fluent English speakers made it an attractive place to set up call centres and perform routine software development.

The seeds were planted then, but the growth of the Indian IT industry really began to skyrocket in the past 10 years on the back of Y2K and the first Internet boom.

The country's IT exports grew eight-fold in seven years – from US$4 billion in 2000 to US$32 billion in 2007 – while the size of its workforce has increased tenfold. It added 300,000 new employees in the past year alone.

In this period TCS's revenues have doubled every two years and it now makes more than US$4.3 billion each year, with close to US$1 billion in after-tax profit, with a market capitalisation of US$26 billion, making it one of the biggest IT firms in the world. It has more than 100,000 employees, one third of these being hired in the past year.

Satyam, another Indian IT giant, took 17 years to make US$1 billion in annual revenues, but only two years after that to reach US$2 billion. It should hit US$3 billion this year, one year later, while hiring another 10,000 to 12,000 more staff to add to its 56,000 employees. Revenue growth sits at about 45 per cent annually.

It is tempting in the West to end the story of India's IT boom there, but it's really just getting started. Both TCS and Satyam expect revenue growth to continue at the pace set by recent years for the short-term. The industry hopes to hit US$60 billion in exports by 2010, but there is every sign it will get there early.

According to Nasscom, India's national IT industry group, about 20 per cent of the world's estimated total IT spend of US$1 trillion is outsourced. About 45 per cent of this is sent offshore, and about 80 per cent of this offshored work goes to India. India's IT firms say there is still room for revenue growth in traditional outsourcing fields, but there are a lot of other IT tasks Indian companies are keen to do as well. The falling price of bandwidth makes this more and more attractive.

TCS is increasingly doing remote management of customers' infrastructure, for example managing 30,000 computers worldwide for German business software giant SAP, handling almost everything from India. "Other than plugging in a desktop, you can pretty much do everything from far away," says Pankaj Baliga, TCS's vice-president.

Today's Indian firms aren't just "body-shopping" organisations, content with call centre work, routine software development and IT support contracts, though there is still a good deal of that.

Firms like TCS and Satyam are now going after high level consulting deals – and winning them.

The consulting market in Western countries like New Zealand, long the domain of well paid locals either self-employed or belonging to multinationals, looks set to be increasingly outsourced to Indian companies using a mix of Indian and non-Indian staff, based both in India and on-site.

Only about 3.5 per cent of TCS's US$30 billion in annual revenues is currently from this sort of high- level consulting work, but the company expects it to grow to as much as 10 per cent within a few years.

"We're no longer just filling RFPs," says Virender Aggarwal, director of Satyam's operations in Asia Pacific, Africa, India and the Middle East. "More and more companies are expecting us to do high- end work. Now they're asking us where they need to go."

Another emerging revenue stream is knowledge process outsourcing, Mr Baliga says. This sees Western firms giving data from financial systems or clinical drug trials to Indian IT firms for analysis. They analyse it more cheaply and then send the results back.

Other Indian firms are filing and researching patents for Western firms at about one-third the cost.

The knowledge process outsourcing market is estimated to be worth about US$2.5 billion each year, and some pundits predict it will quadruple within five years.

"There's going to be a lot of work that today we are not even visualising that will have to be outsourced," Mr Baliga says.

Many companies also see huge growth ahead for the outsourcing of engineering services, such as the design, modelling, and testing of airplanes and cars.

Companies like Tata and Larsen and Toubro (India's biggest construction and engineering firm) have access to both the IT and engineering skills, which they say gives them an edge over the competition.

Indian IT firms are no longer the poor cousins of IBM and Accenture, using a low-wage economy to pick up the low-value scraps.

Companies like TCS, which operates in 45 countries with 67 nationalities on staff, are multinational IT firms that see themselves as the equals of any Western ones, that just happen to be based on the subcontinent.

As this new breed of multinational moves further up the value chain, existing IT giants will have to adapt and compete, or risk being overhauled.

 

Source http://www.stuff.co.nz/4355924a28.html 

Preproject Considerations
Most of our business comes through referrals or new projects from existing customers. Out of those, we try only to accept referrals or repeat business from the "good clients," believing their friends will be similarly low maintenance, high value, and most importantly, great to work with.

We have tried the RFP circuit in the past, and recently considered going at it again. However, after a review of our experiences with it, we felt that unless you are the cause of the RFP being initiated, you have a subatomically small chance of being selected for the project (we've been on both ends of that one). Since it typically takes incredible effort to craft a response, it just seems like a waste of hours to pursue.

On the other hand, we are considering creating a default template and using minimal customization to put out for future RFPs, and even then, only considering ones that have a very detailed scope, to minimize our effort on the proposal even further.

We're also trying to move ourselves into the repeatable solutions space - something that really takes the cheap manufacturing ability we have in software - copying bits from one piece of hardware storage to another - and puts it to good use.

Finally, I'm very interested to hear how some of you in the small software business world bring in business. I know we're technically competitors and all, but really, how can you compete with this?

The Software Development Life Cycle
I won't bother you by giving a "phase" by phase analysis here. Part of that is because I'm not sure if we do all the phases, or if we're just so flexible and have such short iterations the phases seem to bleed together. (Nor do I want to spend the time to figure out which category what each thing belongs in.) Depending on the project, it could be either. Instead, I'll bore you with what we do pretty much every time:

At the start of a project, we sit down with client and take requirements. There's nothing fancy here. I'm the coder and I get involved - we've found that it's a ridiculous waste of time to pass my questions through a mediator and wait two weeks to get an answer. Instead, we take some paper or cards and pen, and dry erase markers for the whiteboard. We talk through of what the system should do at a high level, and make notes of it.

We try to list every feature in terms of the users who will perform it and it's reason for existence. If that's unknown, at least we know the feature, even if we don't know who will get to use it or why it's needed. All of this basically gives us our "use cases," without a lot of the formality.

I should also note that, we also do the formal bit if the need is there, or if the client wants to work that way. But those meetings can easily get boring, and when no one wants to be there, it's not an incredibly productive environment. If we're talking about doing the project in Rails or ColdFusion, it often takes me longer to write a use case than it would to implement the feature and show it to the client for feedback, so you can see why it might be more productive to skip the formality in cases that don't require it.

After we get a list of all the features we can think of, I'll get some rough estimates of points (not hours) of each feature to the client, to give them an idea of the relative costs for each feature. If there is a feature which is something fairly unrelated to anything we've had experience with, we give it the maximum score, or change it to an "investigate point cost," which would be the points we'd need to expend to do some research to get a better estimate of relative effort.

Armed with that knowledge, they can then give me a prioritized list of the features they'd like to see by next Friday when I ask them to pick X number of points for us to work on in the next week. Then we'll discuss in more detail those features they've chosen, to get a better idea of exactly what it is they're asking for.

We repeat that each iteration, adjusting the X number of points the client gets to choose based on what was actually accomplished the previous iteration - if there was spare time, they get a few more points. If we didn't finish, those go on the backlog and the client has fewer points to spend. Normally, we don't have the need for face to face meetings after the initial one, but I prefer to have them if we can. We're just not religious about it.

Whiteboards at this meeting are particularly useful, as most ideas can be illustrated quite quickly, have their picture taken, and be erased when no longer needed. Plus, it lets everyone get involved when we start prioritizing. Notecards are also nice as they swap places with each other with incredible ease.

Within each iteration, we start working immediately. Most of the time, we have one week iterations, unless there are a couple of projects going on - then we'll go on two week iterations, alternating between clients. If the project is relatively stable, we might even do daily releases. On top of that, we'll interface with client daily if they are available that frequently, and if there is something to show.

If the project size warrants it, we (or I) track our progress in consuming points on a burndown chart. This would typically be for anything a month or longer. If you'll be mostly done with a project in a week, I don't see the point in coming up with one of these. You can set up a spreadsheet to do all the calculations and graphing for you, and in doing so you can get a good idea of when the project will actually be finished, not just some random date you pull out of the air.
 

Another thing I try to be adamant about is insisting the client start using the product as soon as it provides some value. This is better for everyone involved. The client can realize ROI sooner and feedback is richer. Without it, the code is not flexed as much. Nor do you get to see what parts work to ease the workload and which go against it as early in the product's life, and that makes changes more difficult. For us, the typical client has been willing to do this, and projects seem to devolve into disaster more readily when they don't.

Finally, every morning we have our daily stand-up meeting. Our company is small enough so that we can talk about company-wide stuff, not just individual projects. Each attendee answers three questions:

1. What did you do yesterday?
2. What are you going to do today?
3. What is holding you back

The meeting is a time-conscious way (15 minutes - you stand so you don't get comfortable) to keep us communicating. Just as importantly, it keeps us accountable to each other, focused on setting goals and getting things done, and removing obstacles that get in our way.

On the code side of things, I try to have unit tests and integration tests for mostly everything. I don't have automated tests for things like games and user interfaces. I haven't seen much detriment from doing it this way, and the tradeoff for learning how to do it doesn't seem worth it at the moment.

I would like to learn how to do it properly and make a more informed decision though. That will likely come when time is not so rare for me. Perhaps when I'm finished with school I'll spend that free time learning the strategies for testing such elements.

Luckily, when I'm working on a ColdFusion project, cfrails is pretty well tested so I get to skip a lot of tests I might otherwise need to write.

By the same token, I don't normally unit test one-off scripts, unless there are obvious test cases I can meet or before doing a final version that would actually change something.

I don't know how to do it in CF, but when I've use continuous integration tools for Java projects it has been helpful. If you have good tests, the CI server will report when someone checks in code that breaks the tests. This means bad code gets checked in less often. If you don't have the tests to back it up, at least you'll feel comfortable knowing the project builds successfully.

For maintenance, we normally don't worry about using a project management tool to track issue. Bugs are fixed as they are reported - show stoppers immediately, less important within the day, and things deemed slight annoyances might take a couple of days. I'd like to formalize our response into an actual policy, though.

Similarly, new requests are typically handled within a couple of days if they are small and I'm not too busy - otherwise I'll give an estimate as to when I can have it done.

With bugs in particular, they are so rare and few in number that I could probably track them in my head. Nevertheless, I mark an email with my "Action Required" tag, and try my best to keep that folder very small. Right now I've overcommitted myself and the folder isn't empty, but there was a time recently that it remained empty on most nights.

In any event, I normally only use project management tools for very large projects or those I inherited for some reason or another.

Summary
If you're a practitioner, you can tell the ideas above are heavily influenced by (when not directly part of) Scrum and Extreme Programming. I wouldn't call what we're doing by either of their names. If you're not familiar with the ideas and they interest you, now you know where to look.

Where would we like to go from here?
One thing that sticks out immediately is client-driven automated testing with Selenium or FIT. I'd also like to work for several months on a team that does it all and does it right, mostly to learn how I might better apply things I've learned, heard of, or yet to be exposed to. What else? That will have to be the subject of another post, as this one's turned into a book.

Source http://www.codeodor.com/index.cfm/2007/11/26/What-Im-Doing-To-Make-Software-Development-Work/1752