Should You Use Offshore Programming or Consulting Services?

by Doug Deane

The use of offshore programming services is becoming commonplace in the Sage development and consulting community. Sage uses offshore programmers themselves, and taking their lead, many of the partners in the Sage development community are also doing the same. We have recently heard of one major Sage VAR offering $28/hour offshore consulting services in order to entice end-users to switch resellers.

Before Japanese cars were made here in the US, detractors claimed that it was unpatriotic to purchase foreign cars, when perfectly good cars were made right here in the United States. They went on to say that the purchase of foreign cars took jobs away from American workers and was bad for the economy. Supporters contended that nothing was better for the American economy than the availability of high quality transportation at a lower price. When the bulk of production of Japanese autos moved to the US in the late 80’s and ‘90’s it rendered most of these arguments moot.

Similar arguments can be made for and against offshore programming. Certainly, the availability of high quality, less expensive programming services must be good for our economy in the same way that Toyota Camrys were good for the US economy. Offshoring means higher profits for the US developers and service-providers that use it, and it means lower programming or support costs for end-users. The fact that a few “higher-priced” US workers are now out of work should be incidental to these other benefits.

This is all true, but only if our premise of lower costs and higher quality is accurate. Let’s examine those issues.

Why is it that there are thousands of Indian, Chinese, Russian and Filipino offshore service-providers willing to provide programming and support services for pennies on the dollar? The quick answer is that their standard of living is so much lower than ours, and their overhead is so much lower, that they can afford to do so for much less. But the most compelling answer is that they cannot yet do what we do, so they are forced to charge less. The offshore providers have bright, motivated and hard-working staff, but:

Offshore providers do not have the experience with Sage products that we do and they do not understand American business processes as well as we do. This requires significant supervision. Since the low cost provider typically has no deep understanding of the Sage code – there almost always must be an intermediary (at an additional cost) to supervise the work and check that the specifications are met.

Offshore providers do not have the depth of contacts at Sage that we do. They work in a vacuum completely unaware of your product’s future. Want some extensive FRX reports built? Sure you can pay $28 an hour and feel good for about a year — until you see elsewhere that FRX is a discontinued product. Still think that $28/hour was a bargain?

Offshoring tends to be robotic. Offshore service-providers do what they are told to do by their managers. They do not think outside the box, in order to provide you with a lower cost solution, like we do. You pay – they program. Service-providers have no idea whether your requests are logical or not. So long as the checks are sent the service or programming continues. Offshore providers never say “you shouldn’t do this because in the future you’ll have problems”.

There is rampant turnover in their ranks, causing support headaches when the original programmer or support-provider cannot be found.

Time zone differences cause timely support to be problematic. Communications can at best be inconvenient and costly, and at worst be virtually non-existent. Offshoring loves overnights. Enjoy support at 2am in the morning? Welcome to offshoring where your 2am is their workday.

Offshore locations do not have the same intellectual property laws or political stability that we do. Have you ever tried enforcing an NDA in India? How would you even start?

Quality is difficult to control. It is not unusual for an offshoring service to offshore its work to a completely different offshore company, further complicating project management and reliability.

There is no legal recourse that you can take when a project fails. Money that you paid in advance is probably not going to be easily recovered. Offshoring has few (if any) guarantees. When your checks stop – so do the replies.

The differentiator for offshore service-providers MUST BE their very low price because they have nothing else to offer.

There are many American service-providers who are now touting programming and consulting rates as low as $28 to $40 per hour. Some of the more straightforward of these admit that they are using offshore programmers. The least straightforward will admit it only when pressed hard to do so. The rubber meets the road when they are asked to sign an agreement that no offshore programmers or consultants will be used in your development project.

What is now becoming clear is that the promise of like, or higher quality work at a much lower cost, is simply a myth. The programming or support services may indeed be pennies on the dollar. But after you factor in your company’s downtime, your staff’s time needed to resolve problems, your staff’s inefficiency in having to work around problems that are not resolved in a timely way, and your exposure to intellectual property theft, your actual savings are virtually nil. There are many instances of projects which actually cost more, when all these others factors are considered.

DSD Business Systems urges you to think about these issues and to enter into any arrangements for low cost services with completely open eyes. Using providers like DSD is not only good for the US economy; it’s good for yours as well. When you are considering engaging a developer or consultant to assist you in fine-tuning your Sage software we strongly suggest that you:

•Ask if any programming or consulting services are being offshored.

  1. If the service-provider indicates not, then have them sign an agreement to that effect.

  3. If the provider indicates that offshoring is being used, you owe it to yourself to find out:
  • If you have any legal recourse in the event of the theft of your knowledge or intellectual property.
  • If you have any legal recourse in the event of a failed project.
  • What the time zone difference is between your office and the offshoring service.
  • If the offshore consultants that will be used on your project have been trained by Sage staff to modify source code. Ask for certifications.
  • How much experience your particular offshoring service has with the specific Sage Software module you need modified or supported.
  • If you will receive a fixed-price quote up front for your proposed modifications, and a detailed specification in writing, describing all proposed changes to the databases, screens, reports and entry screens.

DSD Business Systems uses no offshore services. DSD will give you a detailed programming specification and a fixed price for your work. DSD does not believe in a 100% money-back walk-away guarantee. Such guarantees are for vendors who don’t want to take full responsibility for their mistakes. DSD’s commitment is that we will correct any problems at our cost, even if the costs involved in doing so cause us to lose money on the project. We want to make it right, not just give you your money back and walk away.

DSD has accumulated decades of experience working with Sage software modules, and many of the features in the Sage modules were written by DSD staff. DSD is one of a small handful of developers who advise Sage concerning their third party development standards. DSD publishes software development tools that are used by many of the developers in the Sage community. This experience translates into REAL cost savings for you, unlike the elusive cost savings touted by those who use offshore programming services.

We hope that you will think about these issues the next time you or your customer is enticed by low cost programming or consulting services.


Doug Deane is President of DSD Business Systems, a national provider of on-demand (cloud) and on-premises ERP and CRM software, specializing in wholesale distribution, manufacturing, warehouse management, inventory, business intelligence and eCommerce software.  DSD offers Sage 100 (formerly MAS 90), Sage 300 (formerly Accpac), Sage 500 (formerly MAS 500), NetSuite, Sage FAS, Sage HRMS (formerly Abra), Sage CRM, Sage SalesLogix, Extended Solutions, and Custom Programming.

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