Outsourcing stories are interesting to me for a couple reasons.
(1) Why do people think subpar programming from outsourcing companies will always hold true? The more business/experience these shops acquire the more likely the engineers develop better software practices. The developers writing crappy code have an opportunity to learn how and why it is bad. Over a long enough period the environment will eventually produce excellent developers I would argue.
(2) What happens to the displaced talent? If big corp decides to slash its talent and compete in the software world with the equivalent of a zerg rush (many outsourced engineers versus one onshore engineer), what if they are really sowing the seeds of their own destruction? If amazing engineer with business domain knowledge and enough to comfortably live on savings for 6-12 months is laid off, perhaps they decide to join a competitor or even start their own competing software?
Point one: Outsourcing companies typically win with bottom barrel bids so the bean counters have maximum organizational leverage to perform the transition and the execs get maximum balance sheet/stock option strike price effects.
The people that work at these firms (TCS/Wipro for example) are very high turnover. The bad people get punted, the good people leave as soon as they can get a better job.
And as explained elsewhere, the bean counters don't add up the increased load on the managers, the reduced execution/delivery, the dead pool effect of chasing away not only your good IT people, but the good non-IT people that were effectively "interfacing" with IT (not a small skill) that get frustrated with the extra communication barriers.
There are other ramifications: the onshore people will use the offshore as excuses (deservedly or otherwise). This will create adversarial or paranoia relations, a lot of the IT - not-IT projects require trust and openness to get to the final product.
The offshore people also know that the onshore people are "stuck" with them, and they have 12 timezones and a language barrier and to hide behind. They know that if the onshore bitches about them to the upper management, upper management are going to tell them "tough shit this is the way it is make it work".
Point Two: oh yes, your best people will leave (dead pool effect) not only on IT but in your main business who don't want to deal with the huge overhead increase. And that is to the benefit of your competitors. And they'll go to your industry competitors because that's there depth of skill. And they'll be resentful and motivated.
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But we need to get real about the markets in America. Almost every market is a cartel, duopoly, or monopoly. They aren't looking to dominate the world and compete, they are about defending their market share, and making their stock option prices/expected performance.
So companies won't view IT as a weapon. You deploy IT as a weapon if you're competing, like Amazon or startups. Large enterprises will do outsourcing in the same way they do pointless reorgs/restructures. It moves the deck chairs, as long as it doesn't hurt things TOO much, they next management team will come in and get to invest money to clean things up.
Tesla is another example where a company used IT like a weapon. It's software integration in the cars far outstripped main auto and caught them with their pants down. But they had to, because they were penetrating a fairly ossified market. Their self-driving may be a lot of smoke and mirrors to some, I see it and think "wow that, while absolutely not ready for primetime and a long way off, is very impressive", but it is undeniably being invested in because Tesla sees software as a weapon.
(1) Why do people think subpar programming from outsourcing companies will always hold true? The more business/experience these shops acquire the more likely the engineers develop better software practices. The developers writing crappy code have an opportunity to learn how and why it is bad. Over a long enough period the environment will eventually produce excellent developers I would argue.
(2) What happens to the displaced talent? If big corp decides to slash its talent and compete in the software world with the equivalent of a zerg rush (many outsourced engineers versus one onshore engineer), what if they are really sowing the seeds of their own destruction? If amazing engineer with business domain knowledge and enough to comfortably live on savings for 6-12 months is laid off, perhaps they decide to join a competitor or even start their own competing software?