The Changing Face of Offshore Programming 670
teambpsi writes "BusinesWeek Online has an opt-ed piece on the trend in offshore programming pricing going up, with domestic rates going down. As a contractor, I've seen the downward pressure on contract gigs now to rates lower than what I was charging over five years ago. Dell Computers recently announced that it was bringing its customer service back on-shore, I wonder if this might be the start of some bigger trend -- maybe 'buy american' could be our new battle cry ;)"
Accents (Score:3, Funny)
From the article: Some US customers have complained that the Indian technical-support representatives are difficult to communicate with because of thick accents and scripted responses.
Tech support for corporate customers with Optiplex desktop and Latitude notebook computers will instead be handled from call centers in Texas, Idaho and Tennessee, Dell spokesman Jon Weisblatt said Monday.
Let me get this straight. People cannot understand Indian accents, but they can understand Texan and Tennesseean accents? Obviously they've never been to either state ;-)
Re:Accents (Score:2, Funny)
And you, sir, are most definately correct.
Re:Accents (Score:2, Funny)
but seriously folks I go to a Tejas institute of higher education, and you should see all the Injun CS grad students with Texas/Indian accents.
Re:Accents (Score:4, Funny)
rj
Real reason support was moved (Score:3, Informative)
Huge cultural differences, not just accent (Score:3, Interesting)
It isn't just accent. It is huge, huge, huge cultural differences. Sometimes you would be able to understand their words more easily if it weren't so difficult to believe what they are saying.
About two weeks ago I was helped by a Microsoft tech support person in New Delhi, or maybe Bangalore, I forget which. Some otherwise correctly running Windows XP computers had trashed themselves so that it was impossible to run the Recovery Console. The MS tech support guy had absolutely no clue about how to fix th
Not the right explanation (Score:5, Interesting)
I think that what you encountered was just an individual personality. I've had these experiences with Indians, too (especially bureaucrats who wanted to prove their importance), but I've had similar experiences with people everywhere. I've managed a tech support group in the US and some of my own people acted this way (until I either stopped it or got rid of them.) It wasn't correlated to their skill level either, just to the degree to which they seemed to feel the need to prove to others that they were smarter (which seems to afflict geniuses and idiots in roughly equal proportions.)
Large problem with cultural differences (Score:3, Interesting)
There are Indians who do treat foreigners as untouchables. I experienced the Brahmin arrogance while in India, and it was easy to recognize again in the technical support person.
The major point of my comment is that those who employ Indians are experiencing a much larger problem with cultural differences than they generally realize. Microsoft seems to have no mechanism for recognizing these kinds of problems, so no one in authority will learn of them, and they will continue.
For more elaboration abo
If so its trouble. Likely just position related. (Score:3, Interesting)
They are really in trouble if the nations top-notch talent is doing tech support. This does not bode well for the staff doing their high-risk programming (guided missiles, space operations, etc.)
So most likely they are among the better educated and think they are better than they actually are, much like some number of support
Accents are not the problem (Score:5, Interesting)
So why don't you hear a lot of people complaining that their airline or credit card company customer reps can't talk good American? Because there are plenty of well-educated Indians who speak fluent western English. All they need is a little practice on their idioms and pronunciation, and you can't tell them from a native of Duluth. Not over the phone anyway.
So it's perfectly possible to run an operation out of Bangalore or Dehli without communication problems. And yet you hear all these horror stories. I have a few myself: I subscribe to techwr-l, and we often get lame questions from Indian writers, usually basic grammatical stuff even a American 4th grader or a Slashdot editor would know.
My inference is that the companies driving the offshoring trend aren't satisified with the pay differential between San Jose and Bangalore. So they don't hire people with degrees from India's universities or engineering schools. (Which produce a lot of good people -- I've worked with some of them.) They hire folks whose educational achievements culminated in one of those "learn programming in 2 weeks" schools. Their English is hard to follow, not because of their accents, but because its one of the highly-localized English dialects that Indians use amongst themselves.
Here's another horror story. If you're a tech writer in the San Francisco Bay area, you've noticed a lot of headhunters trying to fill a very strange job in San Ramon. What's in San Ramon? A bunch of engineering outfits that decided that rents in Silicon Valley were too high -- never mind a limited local talent pool, if people want to keep their jobs, they'll commute or move. One of these outfits is the development arm of what used to be Pacific Bell, now a nameless subsidiary of SBC.
You need massive databases to run an RBOC, and this one has fallen way behind on database development. People complain of billing errors and outdated listings. There's a hair salon in San Rafael that can't get SBC to put its Yellow Pages listing in the proper category -- for two years running it's been listed under "Massage". Which sounds funny, until you consider the kind of lowlifes who respond to a massage ad for "Curl Up With Kelly".
So these guys in San Ramon are scrambling to update the software. They need a tech writer who can document their work. Said writer needs to be able to read source code in half a dozen languages, including the venerable Revelation Basic [4reference.net]. Oh yes, and the writer has to work for $25/hour.
Well, I have the skills and I need the work. But that's hardly a reasonable wage, especially considering the two-hour commute. (It's a short term contract, so relocation is not practical.) I'd be better off working at the Starbucks down the street.
When I pointed out the absurdity of offering entry-level pay for a job requiring advanced skills, I was told that all the costs were measured against the alternative of moving the whole operation to India. Which is total nonsense. I'm sure there are plenty of Indian operations that could engineer a fancy database from scratch, and do a good job very cheaply. But SBC doesn't even want to spend that much money. They want to continue hacking 20-year-old code running on legacy platforms. Do they think that India is swarming with experts on the PICK database system?
The whole offshoring thing is just the latest development in a nasty long-term trend. Even before the dotcom bubble burst, Wall Street was dominated more and more by numbers dweebs, people who have no understanding of the industries and businesses they're investing in, and have an idiotic obssession with the bottom line. They hate costs more than anything. Even if you're turning a
Re:Accents (Score:4, Insightful)
wrong about one thing. the average education level of workers in indian call centers is way above that of their american peers.
Well, apparently they weren't educated in customer service. The HP/Compaq offshored help is all but useless even after you stay on hold for 30 minutes. I'll never buy another HP product - I hope you're listening Carly, but I doubt it; you're too busy looting the company.
The only battle cry companies heed is "returns!" (Score:2)
If there's a move to put customer service back onshore at Dell, or other "in-sourcing" trends, it's because the costs are lower, or the higher costs are offset by either good publicity / happier customers.
Mind you, I'm as pro-capitalism as they come, so being driven by the battle cry of "returns!" is a good thing, IMHO.
Re:The only battle cry companies heed is "returns! (Score:5, Insightful)
Mind you, I'm as pro-capitalism as they come, so being driven by the battle cry of "returns!" is a good thing, IMHO.
I think capitalism is the best socioeconomic system mankind has come up with yet. But some people get into it a bit too much -- mainly the CEOs at the top who think making ten million per year isn't enough, so they do various things to hurt the people at the bottom of the ladder (cut wages/benefits, outsource, etc).
I like the "survival of the fittest" aspect of capitalism, but I would rather have the citizens survive than a business. Outsourcing is painful, but I think eventually, as the author of one of the articles says, equilibrium will be reached. Hopefully few of us Americans get hurt in the process.
Re:The only battle cry companies heed is "returns! (Score:3, Insightful)
Ayn Rand made money as a result of the set of involuntary restrictions called copyright...
Re:The only battle cry companies heed is "returns! (Score:2, Interesting)
When someone starts a company, (s)he does it with the purpose to earn the salt on his/her potatoes, makeing the world a better place could be a second objective, but mainly it's like any other job.
I'm not a capitalist, but at the moment capitalisme is the most succesfull. It would be nice if we would be working to better ourselves and rest of humanity, but so far no one has figured out ho
About Dell. (Score:3, Funny)
Economics, not dogma (Score:5, Insightful)
You are closer to the customer, not thousands of miles away.
You understand their problem better than some Indian programmer who doesn't truly grok the underlying American business practices being codified into software.
You are operating in their time zone.
etc.
That will win business a lot better than trying to shame a potential customer into paying more just because you are an American.
Re:Economics, not dogma (Score:2, Interesting)
Dealing with customers every day I continually hear them expressing their love/hate of tech support, but as long as the person they are speaking with has little or no accent, they immediately calm down.
No slant against the other nations of the world intended - indeed our company offices in India have great technical support records, but there's a reason we don't have customer support services based over there.
It'll be good to see what the trend is for non-software merchandise as well. This chris
Re:Economics, not dogma (Score:2)
Re:Economics, not dogma (Score:2)
And there aren't any tariffs on those, now are they? Oh wait. More % of that car purchase goes straight to the Feds. Where they can invest money in the economy. Hmm.
And while Fixing Or Repairing Daily may be good for the economy, it's not good for me. So fuck American car companies. I'll buy the best product.
Buy american (Score:2, Insightful)
Re:Buy american (Score:2)
Buying American is looking better [yahoo.com] for Old Europe all the time.
It will all balance out (Score:4, Insightful)
Now you can expect the overseas operation to start lowering their prices or adding more value to their service, and vice versa until it eventually balances out, and once that happens most US based companies would probably prefer to work with someone based locally.
Doctors may not have to worry about this problem of oversea contracting since you still need to see them in person to do the best type of work. Lawyers on the other hand may not have the same benefits
Re:It will all balance out (Score:5, Interesting)
Why is it ok for large companies to benefit from freetrade but wrong for regular people to?
As for your doctor comment, some hospitals are sending xrays/mri scans oversees to be read.
Re:It will all balance out (Score:5, Informative)
Why is it ok for large companies to benefit from freetrade but wrong for regular people to?
How much time and money do you spend lobbying Congress? I thought so.
As for your doctor comment, some hospitals are sending xrays/mri scans oversees to be read.
Processing of medical records goes overseas too. There was a recent story on Slashdot about a woman in Pakistan basically holding sensitive medical data hostage over a contract dispute. Also, within the last year or two an M.D. in Australia or Hawaii or somewhere operated on a patient in the U.S. with a robotic arm and a fat data pipe. I think that was more proof of concept, but still, they may as well outsource surgery now too. Hire a nurse at a fraction of an M.D.'s salary to oil the robot and turn it off if it goes on a crazy killing spree, and save some money :-)
Re:It will all balance out (Score:5, Insightful)
In many cases it does. Relatively free trade is why you can buy a DVD player for $40. It's why you can buy a variety of relatively fresh produce from Chile at the grocery in January. It's why the Big Three US auto makers had to improve the quality of their products when people discovered that Japanese cars didn't start falling apart after three years. If the US government removed sugar supports and import restrictions, the consumer would be able to buy sugar at half the price they pay today.
Prescription drugs are an interesting situation. In many cases, the drugs sold in Canada are actually manufactured in the US, or in Canada by US companies using the same processes and quality control they use in the US. But in Canada, prices are capped by the government. Much like trade arguments over steel in the past, the drug companies are opposed to anyone, including the end user, being allowed to import a competing good from a country where it is priced below cost. I'm not an advocate of the drug companies, just pointing out that they have an argument of sorts.
Of course, the health care system in the US has far too many aspects that tend to drive up drug prices. Enough people are in the situation where (a) their health care is paid for by someone else (employer insurance, government, etc) and (b) they have the freedom to "shop around" for doctors. Enough people that it is profitable for the drug companies to advertise directly to the consumer: "Is Lipitor right for you? Ask your doctor!" And in too many cases the doctor will prescribe the drug because they know that if they don't, the patient will "take their business" somewhere else. Collectively, US drug companies now spend more on advertising than they do on research.
It is an interesting mental exercise in economics to think about what might happen to drug prices if consumers paid their own bills. If the answer to the question "Is Lipitor right for you?" was, except for the wealthy, answered with "No, it's too bloody expensive, I'll take this cheaper drug that has 80% of the same benefits," would prices go up or down? Keep in mind that in many cases elasticities are non-linear, and total profit can be maximized by selling less at a higher price. Major league baseball discovered this years ago -- total ticket revenue is maximized at prices that leave about 15% of the seats at the ballpark empty.
Re:It will all balance out (Score:3, Interesting)
You have to amortize the cost of development over the whole run. The production costs for most medicine, or technology for that matter, are generally only a small percentage of the cost. Computer software is on the extreme end of this example, with practically no unit pr
Re:It will all balance out (Score:3, Informative)
International legal battles can be done (though only if the amount in contention is over a certain minimum), but it's very, very expensive.
Re:It will all balance out (Score:2, Informative)
Doctors were simply imported to do the work here. (Score:2)
And health care is still absurdly expensive, but that's another story.*
(on average, 75% of your health insurance dollar becomes either profits or overheads, with only 25% going to care for you or anybody else in your insurance pool, I believe)
Re:It will all balance out (Score:5, Informative)
Also called "Reaganomics," it's when you run up a deficit during times of an economic slump. It encourages the economy to rebound and more quickly get back on its feet. If you balance it out by underspending when the economy is good, you average out to stronger growth (because if you spend too much when the economy is good, you'll overheat).
What you're thinking of is perhaps David Ricardo, who developed the idea of comparative advantage. Even though one country A might be absolutely better at doing everything than country B, country A can't do everything, so it specializes in what it does best (activity 1) and country B do the things that country A does well but not best (activity 2) and trade for can trade activity 2 for activity 1, making everybody better off.
But what you're talking about above is more like assymetrical information, where you don't exactly know the true cost of the product or what the market is willing to bear, so until it's resolved, prices are unstable.
Re:It will all balance out (Score:3, Informative)
Re:It will all balance out (Score:3, Informative)
This is pretty much just splitting hairs. Many people refurn to such practices as "Keynesian spending." Just because it wasn't newton who investigated much of simple harmonic motion doesn't mean it isn't a "Newtonian" system.
battle cry? (Score:5, Interesting)
Wasn't that Walmart's battle cry for years... until it became convenient for them to forget it in favor of another battle cry that generated yet more money?
Re:battle cry? (Score:5, Insightful)
There's a ton of websites out there chronicaling WalMart's abuses.
Re:battle cry? (Score:2)
Wasn't that Walmart's battle cry for years
I thought it was "La Migra! La Migra!"
A few jobs coming back (Score:5, Informative)
Dell Computers recently announced that it was bringing its customer service back on-shore...
Another poster spoke of the specifics of Dell, so I will not touch that. However, Capital One is beginning to bring back [some of the] work it mailed off to the other side of the planet, as they have been losing accounts hand over fist by customers pissed off about not being able to converse with support personnel due to a language gap. Sure, the labor is cheaper, but is it cheap enough to compensate for lost business? Apparently not, in the case of CapOne.
offshore prices going up? (Score:2)
Please, gentlemen, repeat with me: "supply and demand". "Supply and demand". "Supply and demand".
A good course in general equilibrium microeconomics would serve highschoolers much better than chemistry or physics topics, you know.
A free market is a global market. (Score:4, Insightful)
In the long run, this is one world, and one market: individuals should be free to trade ideas with anybody they want, and in most cases goods and services too.
Why shouldn't somebody in India, or Taiwan compete with me for my clients? No reason I can think of: it might suck for me, but it's going to be great for them, and probably for my clients too; the competition helps everybody except the losers.
America enjoys it's massive economic and social advantages for two reasons: the huge natural resources of it's land, and the incredible hard work and ingenuity of it's people. I think that asking the Government to step in and interfere with free trade in an otherwise free market (as software is now) simply to keep domestic prices high is exactly what landed us with a moribund and over-subsidized farming system, a largely uncompetitive and second-rate automotive industry and so on.
Repeat after me: government interference in markets, other than to address market failures or personal safety, is bad for the market, and bad for those who buy and sell in it in the long run. We have a history of lobbyists destroying the global competitiveness of their industry: don't become one of those people.
So what does that leave for the domestic programmer? Well, at one end of the spectrum, there's the stuff which is too small to outsource: the transaction costs in specification and organization are too large to make it more efficient to outsource.
And on the other end of the spectrum, there's the stuff which is too important to outsource: areas where people will pay a premium for domestic labor because it has to be done fast, and a risk of misunderstanding or second-rate work makes outsourcing unattractive.
But in the middle? Get used to the pressure, folks, as generations of your forebears have in other industries as the rest of the world began to catch on... First mover advantage only lasts for so long.
Re:A free market is a global market. (Score:5, Insightful)
And this is what we should aspire to: the object of an honest day's work is either a sweatshop or a garbage dump.
Now let's all sing the company song...
No, but that's how it is for now. (Score:2)
They won't stay as peasant farmers, as the huge migrations to the slums of the cities has demonstrated, so yes, for now, those are the options: low wage factory labor, or starving in the slums.
India has a new program to try and roll out city-style services (telecoms, water etc. ) to the villages to try and encourage people to stay put, and I'm very hopeful about
Re:A free market is a global market. (Score:3, Insightful)
Re:A free market is a global market. (Score:2, Insightful)
Charge me $50.00 a month for rent, $1.14 for a full dinner at
It happened to all of our manufacturing workers. (Score:3, Insightful)
You can't fight that.
Protectionism is pushing against the tide. I don't necessarily like the results any more than you do, but those who deny the future fail to prepare for it.
Re:A free market is a global market. (Score:3, Insightful)
Re:A free market is a global market. (Score:2)
Unfortunately, we have ourselves in a pickle now, because labor union -> unnaturally high labor prices -> unnaturally high goods prices, and any measure to bring those labor prices back down will lead to massive (and legitimate) economic strife.
Still, the labor unions a
Protectionism (Score:2)
It removes the incentive to really innovate and improve and compete.
If you aren't competative it is just wasteful to use your money that way.
If you can't compete on one product, make or do something else.
If you sit and try to force people to protect local sources, you'll get eaten up by Walmart, and those local sources die anyway.
Re:We let them (Score:3, Interesting)
THEY CAN'T. Because investor groups AREN'T allowed to nominate board members. THE CEO nominates the board members. The shareholders can vote them up or down.
The foxes are indeed guarding the henhouse.
Re:A free market is a global market. (Score:5, Insightful)
With the massive American trade deficit (which will eventually annihilate our economy, which will make life suck for you whether or not your job goes to India before that happens), one would expect the value of the dollar to fall. But Asian banks have been proping up the value of the dollar by buying United States Treasury bonds, to encourage more exports to America. This is great for Americans who have lots of money and property and don't need to work for a living--it means fantastically cheap products at WalMart. It makes life suck for you if you have to work for a living. Once again, foreign government intervention screwing over American workers. Free trade has nothing to do with free markets!
Not too mention that Americans are expected to compete with workers who are restrained by American laws--no environmental standards in factories, no minimum wage laws, nothing. Why on Earth did we pass these laws if we aren't going to enforce them for all products that can be purchased on American shelves? So even American government policy encourages jobs to go overseas. (No, I'm not suggesting we eliminate the regulations--I just think we should enforce them for all products bought in America.)
So it isn't a free market at all. It's a market in which foreign fiscal and treasury policies are forcing American jobs overseas and American regulations produce an unfair disincentive to build factories here. Basically, every other government says "Screw America!" and the U.S. doesn't give a shit as long as a few key corporations get rich. Repeat after me: Globalism has nothing to do with free markets or capitalism.
The other insanity in your post is that you think workers (you say programmers, but all workers are just as screwed over by anti-market globalism as programers. Michigan is hurting a lot worse than Silicon Valley.) are going to just acquiesce to these changes just because you keep saying the magic words "free market". Repeat after me People need to eat, and will do whatever it takes to ensure they get food and shelter. If you tell people that there is no way for them to meet their needs within the free market, they have no choice but to destroy the free market! Why do you think those lobbyists always succeeded in argiculture and auto manufacture? Because no one cares about maintaining the global competitiveness of jobs that are going overseas anyway. Thank heavens that those lobbyists are always able to shut up fools like you--America would be vastly poorer than we are now if we purchased every last one of our cars and vegetables overseas.
History is clear on this. There is no example of a great empire that maintained growing trade deficits indefinitely. There are many Empires that have fallen because they gave away all of their gold for luxury and consumer goods for the middle class--see Spain and Britain. The Chinese sell us DVD players we throw away next year, and buy industrial capital to make themselves economically stronger indefinitely. If this continues, China will be stronger than the entire Western World--and then, because some American leaders upheld their narrow and simplistic view of Capitalism, we will lose something much more precious--Democracy.
Re:A free market is a global market. (Score:4, Insightful)
Other posters have pointed out some flaws in your logic mainly about how the other countries don't have the same environmental standards and how they subsidize healthcare and education but there are other factors to consider too.
1) subsidized education. American workers have to charge more because they paid for their own education.
2) Different labor laws. In india people can be fired willy nilly and female workers can get abused with no recourse. In the US corporations can get sued if a female employee get abused or if people are terminated without cause.
2a) Overtime laws, familiy leave act, etc.
3) Although companies are free to move work overseas the workers themselves are not free to follow the jobs. I can't go to canada and take advantage of free health care or cheaper drugs but my boss can go there and outsource my job.
Since there is not a level playing field not only is protectionsism NOT stupid it's required.
BTW whose people who used to pick from the dump and now are working in a sweatshop will be back at the dump when the company leaves for even cheaper labor in cambodia or africa. Depending on outsourcing from the US leads to a boom/bust cycle and the corporations chase ever cheaper labor all over the world. Nike or Walmart are not going to tolerate demands for higher wages and as soon as some poor country someplace offers $.10 less and hour they will pull out and move.
No, I actually believe that. (Score:2)
Soviet Communism murdered around 60 million people, Nazi Germany around 20 million (around 6m Jews, the rest homosexuals, gypsies, dissadents, the disabled etc) and Mao around 40 million, plus more since.
That's nothing to sneeze at. Regar
Could you explain how those things are related? (Score:2)
Scromp: why? Why should there be taxes (keeping money in the American system) simply because the Indians will work cheaper, or have less social infrastructure?
Could you justify that please? It doesn't seem to make any sense to me.
The Future: global sustainable peasantry. (Score:3, Interesting)
The part of the premise I don't buy is that a global middle class is possible. Seriously.
If we budget purely in money then, yes, it could potentially happen. But the problem is that that planet won't sustain that much more growth: the middle class is supported by enormous resource consumption, and cheap labor elsewhere.
I don't know of any solution to this problem within our current resource constraints: if everybody is moderately well off, the pl
What if not all resources are limited? (Score:3, Interesting)
But what if they survive largely through shifting the basis of their wealth from unsustainable to sustainable resources?
Things we can assume about the future: basic resources like food are likey to be more expensive. Oil is likey to be more expensive. Energy is likely to be more expensive.
But other kinds of comoddities could get cheaper: computers, communication, entertainment etc. are all falling in relative cost of produc
Re:Could you explain how those things are related? (Score:3, Funny)
This is all a conspiracy for the elite across the world to create a new class of serfs. To barter labor down to 1930s level conditions. Were not helping poor people in poor countries. We are further enriching in rich people in both poor AND rich countries. We are destroying the middle class amongst the G8 nations.
The new corporate feudalism is coming if we don't get rid of WTO and NAFTA.
This will sound like trolling (Score:3, Funny)
I hate to tell you this, but it must be done with rifles. American's have consistently fought and died for the right of the middle class. Chinese and Indians need to fight this battle against their masters. Giving away our prosperity will only make us like China and India.
Battle cry? (Score:2)
Not everyone does. (Score:2)
F-em
Re:Battle cry? (Score:2)
"By American" has been the battle cry of factory workers for years, especially factory workers in the automotive industry. Yet how many foreign cars do you see on the road every day?
How many of those "foreign" cars were built by Americans? Quite a few. Japan learned a few things related to the automobile industry. First, it is cheaper to make cars in the U.S. and sell them here than it is to make them in Japan and ship them. My mother always chides me about being "pigheaded" about my "Buy American" atti
Buzz word compliant (Score:2, Interesting)
I am not afraid. (Score:5, Insightful)
Its almost too funny watching it go so wrong.
Our group has for years fought with the business group over software requirement specs. What we end up building almost always diverges from what they had in there minds. Yes we create software requirement specs with mock up and all that. Yet most of these are in business speak, and can be interpreted in many different ways.
Now they are attempting to outsource to a CMM level 3 development group. The thing is the Brazilians require the software requirement specs to be in precise use cases covering every function that can possibly take place. In fact they will not even start working on a project until this document has been created and signed off on by everyone and their mother.
What has instead happened is the business has no idea how to create software engineering specs. They can't effectively communicate this through the middle management hell that is spread out over 3 countries. The Brazilians effectively sat on their asses for 3 months, and documented the fact that they did. Once they finally wrote something it didn't integrate correctly with all the systems that we have in place in the USA, because there was nothing spelling out the fact in the specs. Now the project is late and everyone is pissed.
Somehow this is better than paying me extra to know the systems, to interpret what business really wants (and sometimes get it wrong), and get things out on time.
In short I am not afraid, in fact I am looking forward to the time the come back to me needing help and I ask for a big fat raise!
Pronounciation... (Score:2)
Nayeenanajad
Really, it's NOT that hard!
Silly Programmers (Score:3, Insightful)
All of you Overpaid twits that were worried that a Union would not help you because you made more money than the average joe, well some jerk in India has your job now, because you didn't want a Union.
Re:Silly Programmers (Score:3, Interesting)
Which is ironic - the staffing models they use at these places totally gives workers the upper hand. I mean if we all walked out one afternoon they would seriously lose face with out clients.
Re:Silly Programmers (Score:4, Insightful)
Can you explain how forming a union would have saved our jobs from going to India? Seems to me that as soon as companies got any inkling that a union might form, they would immediately send the work offshore at an even faster pace.
No, a union isn't the solution (at least not for American programmers). A better solution would be to unionize Indian programmers so that their wages rise faster to meet our (admittedly) falling pay rates.
In the meantime (and yes, this sucks) as the article suggests, our pay rates will have to fall in order to equalize with rates in India and other 3rd world places. I had a C++ contract back in the summer of 2002 that paid $10 to $15/hour less than it would have the year before and now I've got another C++ contract that pays $5/hr less than I was making in the summer of 2002. But since I was out of work for over a year, I'm happy to have it.
The problem is, as our pay rates fall so that we can compete, all the things we have to pay for are either fixed in price (like mortgages) or are going up (like electricity, gas, etc.).
Unions (Score:3, Insightful)
IMHO Unions do serve a very useful role, but if you look at least at UK history that role has been best served not when there have been strikes but the rest of the time, when they've been able to work with employers on safety, and quality of life while at the same time helping to ensure a company runs well and everyone is happy.
Inhouse vs outsourcing revisited? (Score:4, Insightful)
Outsourcing always seems cheaper on paper but it often turns out that it is not as flexible as inhouse or that the costs for being as flexible are actually higher. Not that it matters by this time the manager who signed the contract has had its bonus and is busy on the next bone headed move.
Let me give an example. Local school wich also gave night classes had a cafeteria. It would do cheap cheerfull dinners so you could go straight from work, eat there and then go to class. Or if your class was early the other way around. GREAT. Then they outsourced the caferteria it promptly closed this great service.
I seen the same thing in other companies. They outsource the cafeteria lady and all of a sudden the office staff has to do things like arrange cake, late night food for when a department has to work overtime and so on. Worst case I seen had us using our own Microwave and cooker since we were not allowed to touch the equipment in the kitchen since it didn't belong to the company. Great fire hazard.
There was once a time when companies did everything themselves. They maintained their own cars, had their own doctors, had a few holiday places to send employees too. This was boomtime. Then companies started to focus on their core capabilities and outsource or sell anything that didn't belong. We been in a downward spiral ever since.
I WANT MY BLOODY DINNERLADY BACK! An old fat woman who knows everyones birthday and gives them a little cake at lunch and puts up a x-mas tree with cookies.
My outsourcing experience (Score:5, Interesting)
Here are my conclusions:
1) We were able to ramp up faster than if we had tried to hire locally.
2) We were able to overcome personnel issues more quickly -- the vendor was able to add higher-powered programmers very quickly when they got into trouble, and "swarm" the problem with bodies. In our case (simple Web apps) it worked, although there are situations in which it obviously would not have worked (mythical man-month, blah blah blah).
3) The quality of the finished product was reasonable. Call it B/B-. Which was OK for us, maybe not good enough for some, but acceptable.
It turns out that if I had hired a much smaller number of local programmers as permanent employees (consultant rates would not have worked) -- very good ones at market prices -- and they had performed up to expectations -- I could probably have brought the same projects in on the same schedule for the same price. I probably would have ended up with a better architecture, and better code.
So maybe it's a wash. Except, I would have had the following problems:
1) Hire/fire. When the work was over, I didn't need the teams any more. With the Indian vendor, I could cut back without worry. With permanent hires, I'd have a serious morale problem.
2) Risk. If my gunslingers ran into a problem, I wouldn't have been able to "throw bodies" at it. My budget wouldn't have allowed for that.
3) Maintenance risk. The Indian teams can be scaled way back, but I could still keep 3 people on the project for continuity. If I scaled back my own teams similarly, I'd only be able to save one job, and if that person quit, I'd be hosed.
So there are a lot of subtle factors that play here. The Business Week guy alludes to them, but doesn't really itemize them well.
Re:My outsourcing experience (Score:3, Interesting)
Since when does throwing more bodies at a problem help? It's kind of like saying that you've got one month to make a baby so you go out and get 9 women pregnant in an attempt to meet the schedule.
Learn from the automobile makers (Score:3, Interesting)
'Opt'-Ed (Score:2, Informative)
I believe the phrase you're looking for is 'op-ed' as in 'opinion-editorial'. Used to describe articles in newspapers that express a point of view usually opposing the paper's official editorial stance and published opposite the editorial page.
This is neither an 'opt-ed' piece nor an 'op-ed' piece. It's just a column.
I'm replacing eleven Indian programmers (Score:3, Insightful)
They used a mixed model, with US based management and design, and Indian grunt coders - the major difficulty was that the software modules delived to date failed to meet specifications, event the specifications originated by the outsourcing vendor.
Hopefully, this will have a better outcome than than the last time I was taking over an outsourced project. This past summer, I never was able to obtain a full copy of the source code archive, documentation or specifications from the Ukrainian outsourcing company - I did obtain a sufficent subset to see that over half of their code would need to be rewritten, refactored or simply discarded before the project could be delivered to users.
Anyone here experience with Rentacoder and co? (Score:3, Interesting)
A few sites:
The is likely only a short term trend... (Score:5, Insightful)
We declinded 19% against the Euro during 2003, sadly it is a trend that looks like it will continue for a little while longer.
Once the dollar recovers we will start to see jobs and services outsourced again.
It's real simple they want cheap labor (Score:3, Insightful)
There was never a shortage of American techies, they just wanted cheaper wages so the government created the H1B visa program. Now the
Same going on with the grocery worker strike, Unions on a power trip have pressured companies to raise wages and benefits to the breaking point. Non-union companies come in with lower prices and people are shopping in those stores to save the average 20% difference. Unions did the same thing in steel, automobiles, electronics, and other manufacturing sending American jobs out of the country. American worker became too expensive. Long term effect some old manufacturing town have died or dying.
Trouble is with corporate American focusing only on cutting costs and increasing margins, they aren't realizing they are cutting the available funds of their customers here in the U.S. People sending all their money to just survive aren't going to be buying much.
So after all the pain to the American worker we gain nothing. Wages drop, business slumps until they drop prices. Some people lose their homes or can't pay high rents, eventually housing prices drop. So a lot of people get hurt, some companies/industries lost forever, just to adjust everything down.
Outsourced government programs (Score:4, Informative)
Then there was this article [slashdot.org] not long ago on Slashdot, describing a Pakistani medical transcriptionist who decided to cash in on the Great American Dollar Giveaway by blackmailing a patient from a California medical center. At least a US transcriber could've been tracked down and legal sanctions brought to bear.
I think there are some fundamental issues that transcend coding. How much are we willing to give up in the legendary new "race to the bottom?"
Non-decreasing nominal wages (Score:4, Interesting)
In part, the offshoring (and all outsourcing) trend is driven by the fact that it is difficult in the US, and other developed countries, to decrease nominal wages. A firm may have to cut the price of its goods by 10% in order to compete. But if the firm's workers have not become more productive, so that the value of their labor has decreased by 10%, it is quite difficult IN PRACTICE to cut their wages. In general, the only way to do so is to lay off the existing workers and hire new ones at a lower wage rate. Doing this effectively, at least in the US, tends to put the firm in violation of age discrimination laws, as the highest-paid workers are generally the oldest ones. Outsourcing an entire department avoids that particular problem. And as long as you're outsourcing, you might as well look for the cheapest alternate source that you think can do the job.
Several of the comments above have been from consultants who say that the rate that they can successfully charge for their services has decreased sharply. What the firm pays a consultant is determined for each project; changes in the supply of and demand for consultants comes into play each time, as does the firm's view of the value of the project. The same is not usually true for an employee. Last year we had a hot project in a new, highly profitable area; this year we're doing maintenance on older, less profitable products; but the firm will have difficulty changing the wage rate every time they move someone to a different project.
One area where this plays out in a particularly frustrating fashion is with teachers. My kids' high-school teachers are no more productive than my own teachers were 30 years ago. The classes are just about the same size and the material they teach is roughly the same. Pundits point at standardized test scores and assert that the quality of the product has declined in the last 30 years. That's true in another sense as well -- I am almost sure that the average real wages earned by people whose education stops at high school (real wages being a measure of the value of their contribution to the economy) have decreased over that period. Simple economics would suggest that real wages for teachers should have declined (which may, or may not, have occurred). Given that the value of many of the benefits that teachers receive as employees (health care, pensions) have increased sharply over time, the real salary rate should have gone down a LOT.
changing face is simple (Score:4, Insightful)
Furthermore, multinationals will not be "outsourcing" to India anymore, meaning sending sporadic, low-level programming tasks there, they will be expanding their subsidiaries there and doing R&D in India, just like they are doing R&D in the US and Europe.
Will this mean downward pressure on the salaries of US programmers? You bet. But it's only fair: companies like IBM make more than half their revenue outside the US, therefore it stands to reason that they should employ more than half their employees outside the US. Right now, the percentage is still much lower.
Cost efficiency (Score:3, Interesting)
I can't say much positive about their attitudes and work either, though I don't want to stereotype all ethnic Indians. Whenever I visit their cubicles, they are browsing the web or chatting with their buddies rather than completing their assigned work. I wasn't receiving any respect from certain members of the team, mainly because I had fewer years of experience in software development. However, it certainly did not appear that they had the four years of experience in Java cited on their resumes. I was reviewing their code and fixing major logic errors in code and the grammar mistakes and typos made in the comments. This was work they could have easily done themselves in the very lax 3 week deadline they had to fix their 3-5 test cases. Instead, I spent two weeks fixing their code and writing the documentation that they had "written". I asked one guy to fix a mistake in two of his test cases, pointing out the error and explaining how he could fix it, and he got really angry at me and sent me e-mails about me being the newbie. Since I was not the manager he refused to change his code.
My co-worker has been also working in India for a few months and he does not appreciate the attitudes of certain programmers either. Some of them decided to change some of the code our company had written causing several bugs to appear in the build. None of the developers would take blame for it, though it was probably obvious who had changed it from the PVCS logs.
These experiences have led me to decide to transfer departments and work with people that have experience that actually counts, even if they are not involved in software development (which I hoped to pursue by finding an overseas job and obtaining experience with the company).
There are two questions companies should consider when making the decision to offshore (outsource) to India which directly relate to cost efficiency:
1) Do we fully understand their culture and will conflicts in culture present a problem? In other words, how much additional money and resources will be spent on interpreting and managing their work, making sure that they maintain a certain level of quality?
2) Are we just outsourcing to become trend-followers, blindly following the reocmmendations of McKinsey, Gartner, and Accenture to find cheap labor in India and China? Do we know exactly how much domestic labor will cost in current times (older BW article [businessweek.com])?
It's my opinion on getting them to be efficient workers is that you need an Indian motivator/manager who understands their culture very well, is older than them and has a more impressive resume. Then, have someone from your company who is very knowledgeable about business processes and the related field, in this case software development, communicate the requirements to the Indian manager.
My manager has been assessing the quality of their work to present to our CTO whose initiative was to increase our offshoring in India. Does anyone have a good way to measure the the value of a software developer which includes factors such as cultural differences and communication problems?
Re:Opposition to outsourcing rooted in racism (Score:5, Insightful)
Except that they can't. Here in the US, I can keep track of my team and teach them what they need to know. If the work gets outsourced, then all you end up with is a large number of junior level programmer with no direction. It's simply not effective. Then again, neither is hiring 200 programmers for a project.
The real problem is that buisnesses are looking for the sweet spot between quality, productivity and price. It seems counter-intuitive to companies that a smaller team of more experienced programmers will be more effective than a large team of juniors. They think that a senior developer simply costs more, and that they'll still need the same number of developers.
Re:Opposition to outsourcing rooted in racism (Score:2)
If that is the case , then the companies wouldn't be going there in the first place. Now regarding the quality of the softwares, its better not to talk about it. US companies like Microsoft have been producing notoriously inferior software in many aspects. So was there any issue about it? if the quality of softwares produced as a result of outsouring is "inferior" then customers will look for alternatives. Perhaps they will end up in insisting "made in US" softwares. What I re
Re:Opposition to outsourcing rooted in racism (Score:2)
The real problem (which is quite amusing) is that you can trust companies to do the right thing. Right after they've done everything else. Extreme Programming, Outsourcing, Consultants, etc., etc., etc. are all attempts are cure-alls in place of a well managed project. Not that this is anything new. Many other corporate departments have been through the same shift/reorg c
You haven't seen racism until you've dealt with... (Score:5, Interesting)
I'm an Indian, and let me tell you, the culture is racist to the core. Hell, even within the race there's the caste system, and don't for a minute believe anybody who tells you that it's dead.
Most cultures are ferociously racists: the only exceptions are places where there are too few people of other races to even notice (some parts of England, say, are pretty chilll) or America, where the fight against racism is a big historical driver.
This is one thing which I think Americans have got right and can teach the world: how to deinstitutionalize and stigmatize racism to the point where basic values change for many, if not most, people.
Seriously: I think that America has an incredibly tolerant and non-racist culture over all. Festering throwbacks excepted.
Re:You haven't seen racism until you've dealt with (Score:4, Insightful)
He was standing in line to buy train tickets. When he got to the head of the line, he asked for two tickets to Tokyo, in Japanese. The woman behind the window replied, in broken English, "No speak English." He answered, still in Japanese, "I'm not speaking English, I'm speaking Japanese, two tickets to Tokyo, please." Again, "No speak English," and the woman left the window. My acquaintance was rather embarrased by all this, since it is considered quite rude to hold up the line. After a bit, an elderly man came to the window and asked, in English, if he could help. My acquaintance, still in Japanese, asked for the two tickets. The old man responded, in English, "Oh, you speak very good Japanese," but would not conduct the transaction in Japanese.
My acquaintance said that he encounters this situation, where people refuse to acknowledge that an obvious foreigner can speak the language, regularly in Japan.
They were being polite (Score:5, Insightful)
I'm not Japanese, so what do I know? Here's my guess. Your friend was probably breaking a rule when he tried to speak Japanese to the people at the train station. He is a guest to the country and they are workers at a train station, which makes them servants. They are definitely at a lower point than he is in whatever social hierarchy determines these things, and so they were clearly expected to speak his native language, in deference. By placing them in a situation where he is speaking a non-native language for their benefit, he is forcing them to be impolite. They were trying to make everything polite and OK again by insisting on English. In fact he committed a grave social error when he forced the old man to admit they did understand his Japanese.
Just a few weeks ago at work a tantrum arrived via fax from a software distributor in Taiwan who had been recently fired by our sales employee in Japan for breach of contract of some sort. It was a copy of an email that the distributor had sent in response, and the guy was so livid he faxed a copy to us in California in an attempt to go over his head. In the first paragraph it says "You, being Japanese, should not have allowed this to happen." I thought that was a very strange remark.
Lower worker safety cuts costs (Score:2, Insightful)
Racism may be one factor but there are other issues also. In some side note related to recent gas explosion in China it was noted that more than 90,000 people have died in work-related accidents from January to September 2003. This figure is more than 10 times larger than in western Europe where typical rate is 8 deaths to 100,000 people. Based on stories there is also quite of lot serious accedents also, and one is typicaly paid little or nothing for losing a body part.
If you need to pay lower salaries
Re:Opposition to outsourcing rooted in racism (Score:2)
If you really think the indians are any different. (Score:3, Interesting)
Seriously, they don't make it easy for foreigners.
Re:Whinging (Score:5, Interesting)
The smart companies never moved their programming and tech staff from in house, as they knew that the only way to get the best quality was to keep it at home.
We had a few phb's try and convince the CTO and the CFO that moving the entire development staff to an outsourcing firm... they almost suceeded until the old man (read that as the dude that built this company..) that hold's 51% of the stock said, "no way in hell. there is no security, no quality control, and no way for us to completely control the process." he went on about how only fools would trust another company with their secrets and their future.
The old man did this on one of the telecasts in front of the whole company intentionally making the Executive staff and the phb's look foolish for chasing small dollar returns for giving up the stable.
A company with strong leadership that actually looks toward the future sucess does not chase the easy dollar.
I'm not whining, I'm proud to have a leader in the company that isn't as incompetent as the management that thinks like you do.
Re:Whinging (Score:3, Insightful)
I take the farmer analogy and apply it to today, a farmer would reap the seed they sew and eat the food they produced. This is similar to our augmentation of nature, we do jobs, get money, and can afford the things we need, want, and earn. Yes we live in a society of consumeristic whoredom never before known to the human race, but that's beside the point.
Nowdays, you'd plant the crops with efficient mac
Re:Whinging (Score:5, Interesting)
Places like India are getting more expensive because they are getting way better at doing the jobs well. The experience and infrastructure is now there. Much of the really low grade work now goes elsewhere.
Re:Whinging (Score:3, Interesting)
They've been very good at what they're doing for several years now. Instead they're getting more expensive because they've gone from being a "secret" for a couple of companies to leverage the first-world education (for some) with third-world wages, to being a well known fact that every organization and their brother is racing to join the trend. Obviously there are a finite amount of highly trained, inte
Re:Whinging (Score:3, Interesting)
There are a lot of countries with good education systems, relatively little corruption and the infrastructure to support
Actually, India is rather special... (Score:3, Informative)
Those cultural institutions were left largely intact by the British, unlike the Chinese equivalents which were uprooted so drastically by the 20 years of civil war, the cultural revolution etc.
Re:Whinging (Score:2)
Middle management was WRONG AGAIN! TELL 'EM WHAT THEY'VE WON, BOB!!
Broken immigration systems are a political tool. (Score:2)
Most economic theories assume that the size of the population is more or less static and that the government has no control of it (Stalinism, Maoism and Nazism of course being exceptions to this rule), but in fact a lot of fairly powerful economies are operating partially through manipulation of migrant labor pools: here we have Mexians, South Americans, and the
Ever heard of the phrase "vote with your dollars"? (Score:2)
You still ordered the pc with them didn't you? So their sales department was 100% effective in your case. Stop by my house. I got an old computer to sell to you but first I will kick your teeth in.
Geez. Learn to have some self respect kid. If a company doesn't even give you service when you are buying something how the hell do you expect they will treat you when you come back with a problem?
Admit it you are a masochist. Now get on all four and beg like a
Re:Heh (Score:2)
Re:Wow (Score:3, Funny)
Wow. Condolenses. Reminds us there are things worse than outsourcing. You should really check out those OSDN personals.
Re:off-shore is a stupid term, and so forth (Score:3, Informative)
That's exactly the problem with the current form of globalization -- it is too one-sided in favor of the corporations. Companies can