The Hidden Costs of Outsourcing
December 14th, 2007 at 3:52 pm by CrankyHey Mr. Suit Guy, I know you just saw the glossy PowerPoint from that offshore firm. You were no doubt dazzled by the buzzword rich show and, of course, the irresistable notion of paying $12/hr for programmer with an advanced degree in engineering.
Since you don’t usually consult with the peasants and livestock in your employ, I will offer you this free advice on an open forum. Having worked with offshore developers for my last three consecutive jobs, I can tell you about the hidden costs.
Let’s lay out a side by side comparison for that cool $12/hr developer against, say a typical $35/hr homegrown alternative.
| Offshore $12/hr * 40hrs/wk = $480 |
Employee $35/hr * 40hrs/wk = $1400 |
| Saying “can you please repeat that” on static-y conference calls 6hrs/wk +$72 |
n/a |
| Lost time waiting for the programmers to wake up and start their working day: 20 hrs/wk +$240 |
n/a |
| Discovering that while you were asleep, they couldn’t compile what you sent, so they just sat on it: 35 hrs/wk +$420 |
n/a |
| On screen wording corrections like “Financign Reprots, Push Button”: 15 hrs/wk +$180 |
n/a |
|
Explaining and re-explaining business specific concepts like annual percentage rates: 8 hrs/wk +$96 |
n/a |
|
Waiting for monsoon ravaged T1 lines to be repaired: 8 hrs/wk +$96 |
n/a |
|
Training costs for new programmer when the $12/hr programmer quits for a $13/hr job: 15 hrs/wk +$180 |
n/a |
|
Total hidden costs: $1284 Revised total: $1764 |
Total hidden costs: $0 Revised total: $1400 |
So there you have it. Think carefully.