With the new administration’s intended border tax proposals, many companies of all sizes have been focused on re-planning their moves abroad. Special attention of late have gone to manufacturing companies like Toyota, Ford and Carrier. But outsourced technical work will likely be hit hard too! Among those listening the closest have been off-shored IT services and programming.
Major Hi-Tech Companies Meet To Discuss Impact on Off-shored IT
President Trump’s proposed border tax will assuredly impact the IT industry heavily. Relying both on H-1B visa holders as well as off-shored workers to fulfill IT support and customized programming demands, new border taxes will hit your bottom line if you offshore your IT in any capacity. In a meeting attended by leading business leaders in technology, including the founder of Dell Computers, Michael Dell, President Trump underscored that “if you go to another country, we are going to be imposing a very major border tax”. The actual numbers are expected to be seen in the coming months.
Programming shops in Ireland, India and the Philippines have been bracing for effects of the new administration’s protectionism since President Trump’s inaugural speech in January. In fact, the Economic Times of India that while India’s 150 billion dollar outsourced industry has been “a punching bag for over a decade, things are getting more serious to be dismissed as just election rhetoric”. Offshoring companies headquartered in developing nations—particularly ones that have large technical workforces—have seen the looming American taxation efforts as a cut to their bread and butter.
The reason offshore programming companies are worried about American taxation on their services is that their main competitive edge on American programming shops is price. When it comes to cheap software design and database implementation, India is one of the cheapest places to get work filled. American businesses have turned to outsourcing their programming projects to developing countries like India primarily because American software design is frankly more expensive.
Outside of price, while offshored companies have many programmers and technical workers, their work for American businesses is riddled with hidden problems:
They don’t understand American business models— frankly, the majority of programmers abroad get training in a specific programming language—and may be very proficient with their code, but a major issue with them writing and implementing code for American businesses is that they don’t understand how an American business runs. You will end up babysitting your offshore programmers throughout the development of your software.
They don’t understand American work culture— one critical piece to software design—especially for customized business software—is understanding how your office works. Knowing the ‘ins’ and ‘outs’ of your work place is essential to getting workable software that will actually help you resolve issues with your operations. Since offshored workers are completely removed from a normal American work environment, they often overlook subtleties in the software design that make life easier for your workers. The end result will be wasted time and additional meetings to test, correct and re-test programming nuances that expert American programmers are well-versed.
They don’t document their work well— I’d say the biggest long term problem with offshored programming solutions is that foreign programmers tend to be poor communicators. The biggest problem with poor communication is their inability to document what their code is doing. That means a month or year down the road, you may encounter a bug in the code (i.e., the software stops working!) and no one on their end (or even within your IT support team) will be able to easily resolve the issue. Having a trusted American programming team that documents and communicates changes to your software will make it much easier to resolve.
They don’t abide by US security standards— most developing nations lack sophisticated security standards that American IT companies are required to follow. That means that if your programming team needs to work with protected data, they may not have adequate security measures to keep it safe.
Meetings will lead to “lost in translation” work product— in my experience having to clean up messes that offshore programmers leave for my clients, I’ve found that their team simply doesn’t implement the software requirements that you are looking for. They simply misinterpret what your expectations are. The result is an end product that never quite fits what you’re looking for.
It’s Hard To Find Quality Programming Shops
With more restrictions on H-1B visas and growing costs to offshoring, your options for skilled programmers is becoming harder. Hi-Tech companies are faced with a shortage of skilled workers to fulfill projects.
Have you been considering offshoring a software development project?
Your growing demand to make your team’s work less redundant and to automate menial tasks to ultimately cut un-needed costs, may be best served using programmers that understand your business environment, culture and workforce. For Dynamic Edge customers, we offer discounted programming projects tailored to your business environment.
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