Hacker Read top | best | new | newcomments | leaders | about | bookmarklet login

They have already started outsourcing to Canada at 60% of the cost.

One of my clients outsources all large projects to a company in Ukraine (The HQ is there, but the developers are in other parts of Europe). The time zone isn't too bad, their English/communication is nearly perfect, and it's at a fraction of the cost here in the US.

A large year-long project that I was the tech lead on that involved moving our legacy systems to a brand-new system (this includes all of the coding, etc) cost the company around $90,000. There were 10 devs on staff.



sort by: page size:

I have worked remotely each day for the last 3 years with both programmers and testers at one of the largest IT consulting firms in Ukraine. I have no perspective on the cost of doing so, but I do have some on the team work and quality of outsourcing over there.

Like everywhere else in the world there is a shortage of high quality professionals in Ukraine. And specially now that more and more companies are outsourcing their work over there.

My team has had abysmal programmers & testers come in (who we simply had removed from the team as a result) all the way up to fantasticly professional and capable people. It might take some time, and may cost you above the going rate, but there are certainly gems to be found over there.

The main problem has been the culture. In our experience there is a lot of rigid hierarchy over there, that in the first few years kept team members from speaking their minds. Junior developers would never speak their minds, and blindly do what their seniors would tell them to do. And similarly, the seniors would never take any input from anyone who wasn't either a senior, pm/po or architect.

And lets not get into the sexism that is deeply rooted in Ukrainian society and culture.

This is all very different from what we are used to here in northen Europe, as each team member is expected to speak their mind completely (put professionally ofc) so as to leave no stone unturned. Once a decision has been made this way, the team can move onto something actionable as a unified front without unmentioned trepidation arrising later on (or such is the thinking at least).

It has taken us three years of moving people in and out of the teams, figuring out the best composition of what people to have together and where. And even bringing outside contractors in to replace people within the contracting firm we use.

So it is no silver bullet, but it can be done. I do wonder though if all that time and effort, with the cost incurred, would have been better spent simply hiring locally and building the best team we could here.


I worked for a couple of companies who outsourced some heavy lifting low-level dev tasks to Ukrainian-based teams.

Hands down the best experience dealing with outsourced devs ever. Very strong technically, delivering on time with the highest quality I've ever seen from outsourced teams. Communication-wise always eager to jump on a Skype or Google Hangout call to talk sh*t over instead of emailing into the void and waiting for answers for days.


It's called outsourcing to Russia! You can get amazing devs for 15$ / hour...

I’ve worked with offshore dev teams in india, ukraine (2 locations) and romania.

India was definitely the worst. I don’t think we ever reached a point where the work lost to that team (hiring, training, coordinating, spoonfeeding, mess cleaning) was outweighed by actual productivity from them. In other words, I had the feeling that they should have been paying us instead of us paying them.

Ukraine and romania were different. Still many problems inevitable to outsourcing, but at least the ROI made some amount of sense.

Still, I don’t think offshoring is generally worth it. I saw firsthand how the CEO was looking at only half of the numbers (wages) while they weren’t factoring in losses caused by offshoring. I tried to argue this with him at one point, and his argument basically boiled down to: all these big corporations do it, and they can’t all be wrong. I figure all the CEO’s think that.


You said a Ukrainian could do your dev job for a fraction of your fee, I totally understand but could you clarify why the same isn't true for outsourcing marketing?

Thanks!


Agreed, before the war I worked with an outsourced team in Ukraine, and I was blown away with the quality of their work and the professionalism of all the devs I talked to in that shop.

That being said, I'm not worried about outsourcing. I believe I bring enough value to the table to withstand those pressures, even if eventually I have to take a wage hit to compete.


Also my experience with a Polish outsourcing firm that promised a lot to one of my client. Costed over 200k, one year late, full of bugs and security vulnerabilies. I was brought on the project later, fired the outsourcing firm and rewrote the whole codebase in 8 months and billed maybe 50k total. Outsourcing is rarely cheaper and certainly not on par with quality.

To anyone who has lived through various attempts to 'outsource' software development to various countries over the past two decades this is a sad joke. There is a reason most (possibly all?) of these projects fail. For quite a while the people who were capable of performing the work ended up migrating to a few locations; now that they are spreading out a bit in a post-COVID world we are likely to see more work move out of specific geographic locations, but the work is still going to be done by the same people. There may be a small bit of price competition from lower COL areas, but those same coders will also be able to compete for a wider range of available work so that will maintain the higher price for labor.

This company does outsourcing and the reason that it works for them is a) they are doing it on a small enough scale to keep control of the situation and not let problems fester, and b) they are doing it themselves, not subcontracting to a foreign company with an incentive to cut corners.

Not much new here. And I don`t think their early hiring strategy was all that smart. Canada is full of experienced developers and when a new technology comes along, there are hige numbers of people with enough experience to master it in a month, who would even be willing to work for a bit less in order to get up to speed on the new technology. They are unlikely to be senior developers who have invested themselves in ONLY taking high paying jobs where they can put their expertise to work on day one. But none of this is specific to Canada.

And, in fact, I don't really believe that this company's success has much to do with lower wages. The fact that they made remote development teams work demonstrates that they pay attention to details and that is what breeds success.


Price is a bad reason to outsource it just shifts cost from developer headcount to management headcount. There are two really, really good reasons to consider offshore outsourcing:

* Hire the best. Not every great dev is from North America. There is fantastic talent out there, and you can hire them. Now that most dev teams are used to working remote, it's not nearly as difficult to hire great developers in other parts of the world.

* 24 hour development cycle. Teams can operate 6-12 hours offset, and you can go faster. This only works if the offshore team is as good at what they do as the home team.


For our company, I constantly get linkedin requests from either Poland or Ukraine based companies for outsourcing dev work to them. Would love to hear any stories/anecdotes from HN on working with these types of dev shops in Ukraine or Poland. Are they worth it in terms of cost vs benefit ? Compared to US developers, how competitive are the salaries/cost for a mid level developer there ?

There are thousands of extremely talented developers around the world that will work for much less than US salaries. I think every company should at least consider outsourcing as an option, especially if you are working on a "one zebra stripe" product or you are incredibly cash-strapped - which probably describes most young startup entrepreneurs.

That said, I've never outsourced development on anything that is the core technology of a company, be it the product itself or any technology that gives the firm its primary service advantage. I believe that if something can be explained and executed properly by an outsourced team at a significantly lower cost than we can do it ourselves, then it can essentially can be done by anyone else just as easily, so it isn't a worthwhile product for us to pursue. It's just a commodity. It could be an extremely profitable project, of course, but it loses its interest to me. And there are always more interesting projects to work on...projects where I or my team actually have something unique to offer.

I have outsourced several ancillary products to foreign developers, though. Every single one has been a complete nightmare. We used a few major Indian firms, including Wipro, and we even had our own dev leads move there to direct coding. All of the projects went over our time and cost budgets. The solutions were also, for lack of a better word, brittle. The Indian developers were very talented and nice people, but there was just too much communication overhead and something seemed to get lost in the back and forth. A few times, it seemed like we were paying the developers to learn and get up to speed on technology they claimed to be experts in.

We also outsourced a decent-sized project to a team of Ukrainian developers. I was ecstatic to get them (their lead developer had post-doc computer science experience and had worked for the Soviet space program, and he quoted us a salary that was about what we pay our interns. A genius for peanuts.) They finished a very elegant solution for us that was blazing fast and blew away our expectations. It was also finished four months early. But then they held it hostage to get more money. We ultimately negotiated to pay a portion of their "ransom," only to find out they had sold our solution to several other firms for the same price. We had just footed the development bill for our competitors. And good luck getting any kind of legal satisfaction in this type of scenario.

We've outsourced graphic design and the like to freelancers in the US with great success, though. Just budget extra time and money in case they don't deliver.

So, all in all, outsourcing can work out...but it is usually a bigger headache than it is worth and you need to be ultra-cautious.


Yep, but there are price points where it starts being worth costs. If you want to hire a team of 10 engineers (mix of junior/mid/senior) at an average FTE cost of $150k and are struggling to do it in the US, and could probably make it happen at $200k - $250k, the looking at hiring 10 engineers in another country for $80-$120k and hiring another 3-4 local engineers/managers at $250k to manage the coordination inefficiencies still probably comes out ahead.

You still need to hire (or get a vendor that hires) good developers or you'll be screwed though. I was burnt by some bad Indian outsourcing earlier in my career, but since then have worked with excellent firms from India, Ukraine and Columbia. But we paid top of market (for the foreign market) rates for that value.


The company where I work tried to outsource part of our app to India and Ukraine. The result was a mess and they paid a nice amount. Now we do everything in house.

I guess outsourcing companies pay their employees very little and they aren't able to hire top talent. And even if the pay was good, best programmers don't like working for outsourcing companies. The ones they do work for outsourcing companies don't care about the quality of their work as long as their company is paid so they get paid, too.

We assigned a task to one guy in Ukraine and two months latter he didn't complete it. One of our colleagues did it in three days.

My take is if you want to get good results from developers from another country, you have to hire them directly.


I think some companies tried to outsource stuff like this (Oracle, IBM) but they are slowly finding that there are real costs associated with outsourcing tech and it might be actually cheaper for the company to hire expensive developers in San Francisco but have them sitting in the same building as top management so the communication can happen in real time and engineers can fully understand business requirements rather than try to manage remote outsourced teams on the other side of the globe who have no idea what's happening at the HQ.

I worked for a company that only had one in-house programmer. The outsourced to the Ukraine for most of their programming needs. This was 20 years ago.

To outsource development costs.

I had a project that a US developer wanted 4x the money and 10x the duration for a really small project. I went with the eastern european developer and it was fine.

The eastern european developer outsourced the project to India too when i read the code signature, which I laughed about.


The problem is the outsourcing model, not nationality. You could outsource to a company of great programmers in Romania or France and still have the same problems of being overbilled for hours and lacking clarity of product vision. You could hire those same programmers directly and move them into your office and have a better chance of overcoming those problems. Heck, you face similar problems with law and PR firms in your own city. The problem is in thinking the hourly savings are worth dealing with overbilling and poor vision sync.. The more complex and dynamic the project, the more worth it to go with in house development.
next

Legal | privacy