The old challenge for IT project managersâ€"keeping development teams motivated and advancingâ€"has given way to a new quandary: whether retaining a full-time IT staff is a cost-efficient, productive way to execute key development projects.
Some companies are discovering it's not, and many are turning to offshore, outsourced IT development services to fill the gap.
Xenergy, which specialises in energy consulting and engineering for investor-owned utilities, felt the need to align its IT infrastructure more closely with its development needs.
"Like most businesses, we have peaks and valleys, and maintaining an IT staff wasn't efficient anymore," said Catherine Owens, director of software products and services.
Owens and her associates at Xenergy, interviewed four contract companies, opting for offshore development services from Vested Development. VDI, the Xenergy officials said, offered the best prospects of substantial savings combined with quality IT talent.
"We provide our clients with global working arrangements that are at least as smooth as an on-site team," said Brian Phelps, CEO and president of VDI. VDI has been serving clients such as Palm, Datawatch and myriad software companies since its 1998 inception, Phelps said. Despite the slow economy, VDI has grown some 50 percent per year and recently received a second round of venture capital funding, indicating the company and the broader notion of global IT development are on good footing.
"By and large, companies that have engaged in global development for several years tell success stories," said Christine Overby, an analyst at Forrester Research. While multinationals such as General Electric and software companies like Microsoft have been sending IT programming overseas for years, Overby said more and more companies are jumping on the bandwagon.
"Projects with clearly defined requirements, like migrating legacy systems to Internet platforms, lend themselves to modular methodologies in which clients can establish clear parameters around the work of offshore providers," Overby said.
Clients save from 30 percent to 70 percent by utilising a qualified offshore team, whether it's in Ireland or the Philippines.
However, "we didn't just go for cheap," said Xenergy's Owens. "The depth of talent was impressive."
In nations such as India, Russia and China, the government has funded science and technology education for decades, and their institutions have turned out more skilled graduates than American universities, experts say.
