I was talking to a friend who works for Trilogy Software in Austin, TX, and he was describing their model for developing software in developing nations (no pun intended). Apparently, they save a considerable amount of money over hiring U.S. workers, which is what attracts most people to try utilizing the workforce in developing nations. In addition to saving money they are highly successful in delivering quality/timely code to their customers, which seems to be rare among the companies that try utilizing foreign developers.

Here are some of the main points of their model, as it was described to me:

* Hire the most talented people (top graduates from the top universities, the most seasoned/talented developers, etc.)

* Focus on countries that have a large, English-speaking workforce (mainly India)

* Pay employees a much higher salary compared to others in their country so that it is very unappealing for them to leave and go to another company (retention)

* Have short development cycles (1 month iterations)

* Have a strong group of business analysts (with tech savvy) who collect the requirements for each iteration, and then bring them back to the development team (a.k.a. ambassadors)

* Have a very extensive QA cycle that is led by the business analysts who gathered the requirements (lags development by about 1 month)