Comment by roncesvalles
1 day ago
I think many companies intend to do (2) but find themselves in (1) because they try to force their assumptions about the mythical cost savings, which aren't actually there.
1 day ago
I think many companies intend to do (2) but find themselves in (1) because they try to force their assumptions about the mythical cost savings, which aren't actually there.
I've seen companies blatantly pursue the lowest possible hourly rate, kinda disregarding anything else (time zone difference, quality etc). I believe it comes from a procurement mindset (works for other areas, and probably taught in business school):
1. One $unit of $resource from supplier A is cheaper than from supplier B.
2. The price difference is sufficient to allocate a certain amount to dealing with quality issues (from lower efficiency to lawsuits).
3. If it turns out the quality issues are higher than expected, switch to supplier B.
The thing is, this doesn't work with software development. (2) has that pesky long feedback cycle. (3) typically is about equivalent to starting over from scratch.