Information Week, September 7, 1998
IT Looks Offshore
U.S. companies look for more help from foreign programmers
By Marianne Kolbasuk McGee
The shortage of IT talent and the U.S. government's freeze
on issuing H-1B visas to foreign programmers has made the market for offshore
programming more attractive to businesses.
"Even companies that aren't enamored with the idea of
offshore programming are looking at it," says Stan Lepeak, an analyst at
Meta Group Inc. Using offshore programmers costs less than hiring staffers or
bringing in people with visas to work in the United States, he says.
Offshore programming is most commonly used by software
development companies, which tend to do a better job of managing off-site
projects than corporate IT shops do. However, IT consulting and services firms
are becoming frequent customers of offshore programming services as well, says
While U.S. companies are seeking offshore help, foreign
programming companies face local challenges, making them anxious to gain U.S.
clients. Economic conditions in Russia, for example, are prompting some Russian
programming companies to ramp up efforts to sign American customers.
"Russian companies just don't have money to pay for
services," says Vladimir Kurbatov, deputy general director at ArgusSoft
Inc., a Moscow programming services firm. ArgusSoft has opened a marketing
office in Washington to attract American clients. Kurbatov expects ArgusSoft's
business from U.S. companies to double this year, eventually exceeding revenue
Ed Swanstrom, president and CEO of Agilis Corp., a
Gaithersburg, Md., management-consulting firm, hired ArgusSoft to convert
software tools from Objective C to Java. The Russian company saved Agilis
$100,000, based on U.S. bids for the work, Swanstrom says.
To keep offshore programming projects from going awry, keep
tight control over project management from the United States, Swanstrom says.
"There needs to be a clear understanding of what is to be done and what is