Offshoring – en dyrköpt affär?

Externt event, Föreläsningar | 5 oktober, 2017 | Johanna Romin

Offshoring – en dyrköpt affär?

För att spara pengar har många företag som arbetar med mjukvaruintensiva produkter hoppat på trenden att utlokalisera utveckling till länder med låga löner. Eftersom det anses svårt att mäta produktiviteten i kunskapsintensiv verksamhet väljer beslutsfattarna ofta en mer lätt tillgänglig måttstock: timlöner. Men är det egentligen enkelt att uppnå kostnadsbesparingar när man lägger ut komplex storskalig mjukvaruutveckling?

Hur stora investeringar behöver man göra för att bygga kompetens och hur stora blir de löpande kostnaderna? Detta seminariet kommer att beskriva lärdomar från forskning på ett antal fallstudier och beskriva i vilken grad omkostnaderna begränsar vinsten av att flytta utveckling till lågkostnadsländer.

Description in English

What happens when offshore teams are on-boarded in complex evolving software-intensive products? Motivated by tremendous salary differences many software companies, large and small, have jumped on the bandwagon of offshoring. However, in contrast to many other industries that are heavily reliant on physical capital, software development is a highly knowledge intensive business. The importance of skilled and experienced developers is especially high when dealing with complex evolving software-intensive products, for which the learning curve of newly on-boarded developers may take up to 5 years.

In this presentation, we will share our findings from studying relocation of software products offshore in Ericsson. We will share quantitative results regarding the performance impacts, and a number of hidden cost drivers associated with offshore teams on-boarded in legacy products. In addition, we will present an approach for calculating the bottom-line hourly costs by capturing the hidden costs, and the productivity differences, and share the results of cost-saving calculations from two different companies, DutchCo and SwedCo, both offshoring their development to India. Our results demonstrate that the bottom-line costs are much higher than the salary-based hourly rates. Finally, we will show how organizations can further model the business scenarios and evaluate their chances to break even under different circumstances with respect to performance differences and learning curves. The results of our work on cost-calculations in offshoring have been published in such prominent industry-oriented venues as IEEE Software, and have been in the spotlight of national press, such as Dagens Industri and Ingenjören. We believe that our results can be useful for other software companies wanting to calculate offshoring business cases.

Darja Šmite is a professor at Blekinge Institute of Technology and a part-time research scientist at SINTEF ICT. She has dedicatedly focused on understanding the impact of globalization and offshoring in software companies for more than a decade. She has conducted research with and for a number of international companies such as Ericsson, ABB, Emerson Process Management, Boss Media, and CSC, and has insights from working with offshore vendors in India, China, Russia, Ukraine and Latvia.

Lars-Ola Damm works in an organization at Ericsson that develops ‘Digital Business Systems’. Over the years he has had several positions in different organizations within the company, including technical roles and driving global improvement initiatives. Since 2011 he has been a manager of software development teams working in large distributed projects. Currently, he is line responsible for a product involving about 150 software developers distributed across 5 locations at 3 continents. Furthermore, he has a Ph.D. in the field of Software Engineering, including several publications in the area of software process improvement.

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