In outsourcing, you get what you pay for – that is a point recently presented by Peter Coffee of Information Week in his article titled “Set expectations for outsourcing”.

Peter presents a well-prepared and balanced review of outsourcing and warning development leaders to make sure you are outsourcing for the right reasons. However, the ultimate goal of meeting the customers needs and delivering value should be driving our decisions. There are various incentives for initiating an outsourcing contract including hiring expertise in a particular area, flexibility in staffing when concerned about sustainability of the resources, and cost control. It is this last item – cost control – which has received the most attention recently with the offshoring of development. Quoting Peter Coffee…

Team leaders and business process owners should eye with suspicion any promise that outsourcing and offshoring will yield durable reductions in development costs or an indefinite edge in quality without corresponding stretching of budgets and schedules.

If the performance of a project team's leaders is only somewhat hampered, therefore, by language difficulties, time zone differences and other factors, there may be surprisingly little net gain for the project as a whole, despite the project accountant's pride at hiring rank-and-file workers at lower offshore wages.

Augustine's asymmetries most likely become even more distorted in software development efforts. Barry Boehm, in his definitive 1981 book "Software Engineering Economics," concluded that a developer team drawn from the top 10 percent of the skills range will be about four times as productive as a team from the bottom 15 percent of that spectrum.

If it costs three times as much per unit of effort, therefore, to hire the best and give them optimal working conditions—including prompt and effective communication with business process owners—then the result may still be considerably better value.

In short, to play the defensive game of trying to find tolerable coding talent for less money is an inferior strategy compared with finding the best available talent and paying it what it's worth.

Development managers have no one but themselves to blame if outsourced or offshored development turns out to be a proposition of getting ‘less for less.’ It's unrealistic, moreover, to hope in the long run for a continued stream of ‘more for less.’ Good value, in the long run, comes from paying for what one gets—and a good outsourcing relationship is one in which no one is badly surprised by either what's paid or what's produced.