(I've been meaning to do this for months - probably years, actually, but been too lazy/busy. When I upgraded my Radio Userland software recently, the WYSIWYG editing no longer worked. Lazy/busy won out yet again, but this time it was easier to move the blog.)
11:39:47 AM    
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I was chatting yesterday with a fellow attendee at the salesforce.com meeting on its new AppExchange (very interesting, but more on that at a later date). Tom's business card states "offices in the United States and India", and in the ensuing conversation I mentioned some research I'd done a few years back on outsourcing to rural areas within the U.S. such as Roanoke, Virginia. He asked, "where else?", so today's earlier post is partially an update to the previous topic, and partially an answer to his question.

I say it's a partial answer because it gives some pointers of where to start looking. The businesses mentioned in that post are huge, and can afford to set up very large branch offices from scratch. For a smaller business you're more likely to hire in single digits, so I'd suggest guru.com (which I've used) or elance. com as a way of hiring consultants with the idea of testing the waters for a more permanent arrangement. A more time-consuming approach is to work with the local economic development authorities - they often have pilot programs that work well for 10's of hires, perhaps locating employees in a telework center to provide some level of supervision and socialization for workers.

Businesses in Virginia should also check out NVTC - the Northern Virginia Technology Council, which tracks state technology policy among other activities.

5:49:07 PM    
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What do CGI-AMS Inc. and Northrop Grumman Corp know about Virginia's heartland that would prompt them to hire hundreds of software engineers and build multimillion-dollar technology centers there? Ellen McCarthy provides a number of answers in Mining Coal Country for Tech Workers - Economics, Politics Send Contractors Into Southwest Virginia, (Washington Post, January 2, 2006)

• rents are cheap
• traffic is light
• talent is available

Are you thinking "duh" to the first two, but "huh?" to the last? Don't be so surprised!

"The area turns out plenty of résumés that the companies want to see. Local officials drafted a study to show that 4,566 computer science degrees were awarded in the past five years by colleges within 100 miles of Lebanon [Virginia], including Virginia Tech, Radford University and James Madison University."

But the overriding driver for businesses?

• 'Most companies expect to save 30 to 40 percent on projects done through a process dubbed "onshore outsourcing," or "farmshoring." The average salary for the 300 people CGI-AMS expects to hire in Lebanon, for instance, will be $50,000 -- far above the town's $27,606 average annual wage but about half the salary an advanced software developer in Northern Virginia might earn.'

And while the salaries may be a bit higher than oversees outsourcing options, there are advantages beyond the fact that some government contracts insist on U.S. workers for security purposes. As I've blogged about in the past, a number of studies have found the cost of outsourcing is frequently underestimated. Issues related to time zone separation and cultural differences must be factored in when outsourcing to places like India. Southwest Virginia has a distinct advantage here. Even the spread of corporate culture is easier to handle when workers can rotate in to headquarters for occasional training and team building exercises. Adding this to the list of reasons:

• U.S. citizenship and/or work location may be required for some government contracts
• Cost to overcome time zone and cultural differences is lessened
• Cost for the occasional face-to-face meeting is lower

Then there's the political angle: government wheelers and dealers are helping make these deals even more attractive. In Virginia, Governor Mark Warner would love to boost his approval ratings as he plots a path to run for President,. Similarly in Kentucky, SAIC has expanded in the hometown of Rep. Harold "Hal" Rogers (R), who controls some of the purse strings for homeland security spending. The Economic Development Administration of the U.S. Department of Commerce, sponsors a number of programs with this goal in mind. So add to the list:

• economic incentives

And have you wondered yet, "why Lebanon, VA?" Perhaps it's the '$1.65 million in federal grants that, along with funds from the state's tobacco commission, was used to install fiber-optic cable necessary for tech companies to operate.'

• technical infrastructure

This is where my favorite topics come into play, because without the bandwidth to communicate electronically and transfer large files and databases, distributed work simply won't work. Lebanon branch offices could become a development island, leaving the workforce to react to a constantly shifting govenment contracting environment. An integrated workforce can more easily be tasked to fill in holes across the entire company, enabling long-term economic advantage for the area.

The parting thought: 'Speculation about when a Starbucks will appear is rampant on the streets of Lebanon'.  I'd say as soon as the execs move in!

5:31:37 PM    
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Behold the Virtual Company by Sam Varghese (Syndey Morning Herald, December 9, 2005) provides a peek at what the future of work may hold for more and more of us in the IT industry.

The Austrailian IT Register was founded in 2005 by Owen Baker, who sees a real advantages in the distributed development business model. 

The virtual team approach relies on independent subcontractors who for the most part work from home. The company provides a web-based extranet for its staff and clients.

Overhead is low with no corporate office space, and also because there's no cost when staff members are "on the bench" between gigs. They tend to work for smaller clients and see profit margins of around 20 - 30 percent - too small to attract much attention from traditional IT vendors. Despite unpaid bench time, consultants typically make 20 to 50% more than they would as salaried employees.

Baker says "...a virtual company such as ours is seen by many as the way of the future for many organisations - a mobile flexible workforce that can change and adapt as needs come and go. I personally think this is the kind of model that will shape the future of 'work and career' as we know it over the next 20 to 30 years..."

What about the difficulty managing from a distance? Baker's approach, simply put, treats people like grownups: ask for reasonable estimates on each job, and expect people to live up to them. There is a potential advantage in that most independent consultants are self-starters to begin with.

4:22:54 PM    
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The latest vendor assessment from Forrester Research evaluates "process-centric SCM solutions," which automate software development management processes, enabling development teams to store, track, and manage project assets across the application development lifecycle. Process-centric tools can assist organizations in driving quality improvements through their organizations, an especially important factor in the success in geographically distributed workforces.

Borland Software StarTeam Enterprise Advantage is the market leader for geographically distributed development. Advantages for large, dispersed teams include advanced cross-project search capabilities, file caching to solve the problem of responsiveness when using a centralized data repository, XML-based workflow customization and publish/subscribe functionality to help streamline communications, and secure web-based access to enable working from any Internet-connected computer - especially useful for mobile team members. Borland's press release quotes Marc Brown, senior director of product marketing at Borland: "We believe that distributed development is the single biggest challenge and opportunity software organizations will face over the next two years," - indicating a high-level commitment to serving the distributed workforce market.

Among its competitors, IBM's Rational ClearCase Change Management Solution ranks as the most popular and the strongest offering available today, but gets a thumbs down on customization. Microsoft's brand new offering, Visual Studio 2005 Team Foundation Server, fares well for smaller .NET shops. MKS Integrity Suite, Serena Software ChangeMan Directions,  and SYNERGY/CM and SYNERGY/Change - paired applications from Telelogic - are also included in Forrester's evaluation.

2:02:32 PM    
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CollabNet has a new release, with features intended to help "corporations create a sustainable advantage in a new era in which applications are developed by decentralized teams collaborating over the Internet." hmm. a bit of marketese, anyone?

Translation: CollabNet, whose business model is built around tools for developing software over the internet, has added process improvement to its bag of tricks. A brilliant move if done correctly.

From their press release:

"Increasingly, software development practices are becoming distributed. Case in point is the fact that a number of today’s leading computing initiatives like SOA, compliance, outsourcing, convergence, open source, and other strategic community development programs all share the need to assemble distributed software development teams," said Bill Portelli, President and CEO of CollabNet.

Portelli cites good indicators that distributed development is increasing in importance. And the more you do it, the more important it is to get it right:

"In this distributed environment it has become essential for CIOs to set, measure, and improve their development processes and for project teams to understand and complete their specific development tasks in view of the overall lifecycle."

The new feature in CollabNet Enterprise Edition 4.0 that offers this is the "Application Lifecycle Manager", which lets project managers select and customize a set of pre-configured process templates. The templates define consistent processes for their particular projects, from requirements definition through design and deployment. Management views into the development effort allow teams to measure and improve their processes - a critical requirement for higher-level maturity organizations.

This is the kind of robust infrastructure many corporations are learning to employ as part of a radical shift in the way we develop, deliver, and maintain software.

7:14:24 PM    
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