SpiderLogic Model vs. Traditional Offshore Model

Low hourly rates do not equal lower Total Cost of Ownership. We also need to consider other costs associated with the Traditional Offshore Model.

Hidden Costs of Offshore

Vendor Selection 2%
Transition 3%
Retention of Employees 5%
Lost Productivity/ Cultural Issues 27%
Process Improvement 10%
Managing Contract 10%

Total 57%

Source: The Hidden Costs of Offshore Outsourcing, Stephanie Overby CIO Magazine September 1, 2003 Issue

Another aspect of traditional offshore to consider is its reliance on the waterfall development methodology. The Waterfall Methodology requires that you create excellent and airtight requirements. In addition, traditional offshore counts on a very rigid change management procedures.

Iterative Development Process

The SpiderLogic Model supports the Iterative Development Methodology. It has become widely accepted that the "Iterative" approach is far more productive than "Waterfall". A Department of Defense Study considering $37 billion of "waterfall" based projects showed that 46% of these did not meet user requirements and consequently were never used. Another recent large study showed that 45% of user requested features are never used in production.

Another recent study shows that requirements change 25% or more on any given project. The "I'll know it when I see it" user perspective will always be there. Our approach is not to fight it, instead to support it.

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