For Dynamics AX Development, Ill Winds May Blow Offshore

Thomas L. Friedman wrote about the transition toward globalization in the best-selling book "The World is Flat - A Brief History of the Twenty-First Century". This widely accepted metaphor of visualizing worldwide commerce and competition with equal opportunity to local competition has started to receive criticism. It is easy to challenge the ‘level playing field' view by asking:

• Why has 90% of the world's phone, web traffic and investment remained local?
• Why do global companies hire local professionals to run foreign operations?
• Why are more and more call centers coming back to the States?

While we cannot deny that the Internet and other business and political developments have enabled borders to be crossed and have expanded many companies' reach, there remains a clear preference by many-especially smaller and mid-size companies-for local support and competition. It is safe to assume that certain business elements can be effectively purchased or performed abroad, while others should not.

Looking at manufacturing in general, fierce competition, industry pressures and cheap overseas labor continue to lure many manufacturers into trade agreements and/or contract manufacturing offshore. Yet, almost every company struggles with on-time deliveries from their Asian or Latin America resources. Because of this, custom, make-to-order or engineered-to-order production typically remains in the U.S while lower-margin, make-to-stock type-production has transitioned overseas.

Yet as budgets tighten in today's ERP market, we are already beginning to see an increase in offshore development for Microsoft Dynamics AX. But, is it the right fit?

I know there are always exceptions to the rule, but my experience has found that most mid-market companies lack the time, expertise, and resources to safely evaluate and take advantage of Offshore Development Centers (ODCs). ...