Part #3.  Making outsourcing optional

The pressure to reduce development overhead in conventional software development is causing many companies to outsource some or all of their development to offshore locations with lower labor costs. This makes economic sense for tasks where the overhead of coordinating remote development is less than the labor cost reduction achieved by sending the product development offshore.

What happens when a software product line development approach reduces development overhead by 90%?

The economic equation for evaluating offshore outsourcing shifts dramatically.

When considering ways to reduce development overhead, the power of the portfolio creates another option - independent or in combination - to offshore outsourcing.

Real-world Example

I observed a client go through the business analysis of whether to reduce development overhead by adopting a software product line approach or offshore outsourcing. The company decided that it was strategically and economically advantageous to "work smarter" with software product line development rather than to "work cheaper" with offshore labor. Thus, the majority of their development resources remained domestic, while only a small portion their development tasks were sent offshore.

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