Forgot your password?
typodupeerror
Businesses Programming The Almighty Buck

Does Outsourcing Programming Really Save Money? 653

Posted by timothy
from the by-jingo dept.
itwbennett writes "In a blog post titled 'Why I Will Never Feel Threatened by Cheap Overseas Programming', John Larson tells the story of a startup that shipped its initial programming to India, paying $14 per hour, with predictably disastrous results. Larson concludes: 'I have yet to see a project done overseas at that sort of hourly rate that has actually gone well.' But in this not-uncommon tale of outsourcing woe, is the problem really with the programming or with unrealistic expectations?" The comments on Larson's blog post (originally titled "Why I Will Never Feel Threatened by Programmers in India") seem to me more valuable than the post itself.
This discussion has been archived. No new comments can be posted.

Does Outsourcing Programming Really Save Money?

Comments Filter:
  • by Anonymous Coward on Tuesday December 06, 2011 @10:34AM (#38279354)

    Seems to work ok.

  • Faulty Reasoning (Score:5, Insightful)

    by gatkinso (15975) on Tuesday December 06, 2011 @10:35AM (#38279360)

    Just because the overseas programmers suck (debatable, but let's assume) doesn't mean management isn't going to go for the $14/hr carrot.

    • by nomadic (141991) <nomadicworld@gma ... minus herbivore> on Tuesday December 06, 2011 @10:37AM (#38279380) Homepage
      Exactly. You should feel threatened, because quality frequently doesn't win out.
      • Re:Faulty Reasoning (Score:4, Interesting)

        by somersault (912633) on Tuesday December 06, 2011 @10:41AM (#38279432) Homepage Journal

        It might take a few years, but you'd think that eventually they'd catch on that these projects are costing more to maintain and start teaching that in business school. If it's just for throwaway one-off programs then outsourcing probably isn't so bad though.

        • by Anonymous Coward on Tuesday December 06, 2011 @10:44AM (#38279478)

          > It might take a few years...

          Yup, I've been hearing that since 2000. How much longer do you think? 20 more years? 50? A century? I don't think so. Show the PHB two salary numbers, he's going to pick the lower one, never mind any other factors (e.g. overall cost).

          • by Lumpy (12016) on Tuesday December 06, 2011 @11:25AM (#38280000) Homepage

            This is because they dont give a rats ass how much it costs in 5 years.
            They care about the balance sheet for the next 90 days.

            This will not change until they fix the problems with corporations.

            • by interval1066 (668936) on Tuesday December 06, 2011 @12:27PM (#38280916) Homepage Journal

              This will not change until they fix the problems with corporations.

              Then you have a long wait becuase corporations have worked the way you object to for as long as there have been corporations (and if think corps are a recent phenomena you don't know very much about them.) Corporations answer to one entity, their investors. Who are the investors? If you have a 401K- YOU. Retirees, pension funds, individual investors, hedge funds made up of other investment entities, if you save money in any way YOU are the person who causes these "problems" you're referrring to. Your only fix really is to remove any profit motive from yourself, so, fix away.

              • Re:Faulty Reasoning (Score:5, Interesting)

                by AK Marc (707885) on Tuesday December 06, 2011 @12:50PM (#38281282)
                But the investors aren't the shareholders. I have $200k+ in stock somewhere. But it's in mutual funds. One of the "requirements" when you join a mutual fund is that the fund manager is the shareholder, even if I own the shares. That simplifies their work and divorces me from any control of the entity I "own." So really, you are arguing against the current mutual fund trend, and not anything else.
                • Re:Faulty Reasoning (Score:4, Informative)

                  by interval1066 (668936) on Tuesday December 06, 2011 @12:58PM (#38281490) Homepage Journal
                  But your argument is that all corporations are managed by some greed-driven aliens that have no stake in your or my world, and that simply isn't the case either. Not all investment vehicles are mutual funds. Not all investments are divoraced from their investors. Not all "regular people" do not have access to their investments. Seems to me like you have a raw deal. The manager at my fund absolutely answers to me and the other people I work with. If not I take my money elsewhere. You might be advised to do the same.
                  • by HeckRuler (1369601) on Tuesday December 06, 2011 @03:26PM (#38283460)
                    No no, not ALL corporations. Just most of them. Profit is the sole reason for the existence of a corporation. That's their ultimate driving goal. That doesn't say anything about profits now vs. profits latter, so there's quite a bit of variety in how corporations act. Well, most of them. Some are merely there to shield the founders from lawsuit.

                    And yeah, not all investments are divorced from their investors. Just usually mutual funds, like GP was talking about. You know, the sort that "regular people" invest into. The fact that you have had actual communication with your fund manager sets you apart from the masses.

                    As for "going elsewhere", my company's 401k plan has a list of places I can put my money. They're all treated the same. And I'm going good when it comes to wealth, I HAVE a 401k option.
                  • by rsilvergun (571051) on Tuesday December 06, 2011 @03:39PM (#38283634)
                    for how much removed they are from the system. The owners that is, not necessarily the managers, but the owners set the policies and tones. Adam Smith lived in a time when it was safe to assume the capitalists would live near the means of production and thus suffer the consequences of their actions. He didn't see satellite communications coming. For what it's worth Karl Marx talked about this; e.g. how capital owners would be insulated by pitting labor in one economy against another; but all anyone can remember about him is that a bunch of dictatorships borrowed his books for rhetoric...
                • Re:Faulty Reasoning (Score:4, Interesting)

                  by khallow (566160) on Tuesday December 06, 2011 @04:54PM (#38284624)
                  And that is an example of what's wrong. In a nutshell, people control corporations with other peoples' money. So the incentives to have competent, honest leadership are gone because the people voting aren't the same as the ones which will lose money.
              • by rtb61 (674572) on Tuesday December 06, 2011 @01:16PM (#38281784) Homepage

                Corporations answer to their investors, that's a laugh. The modern corporation is an illusion run by psychopaths to confuse and decieve their investors. The number one goal of corporations today, is to guide as much of the company income towards company executive pockets and to maintain this for as long as possible until the company explodes under the weight of impossible debt.

                The reality is failed offshoring is driven by nothing but pure greed. Some executive will claim the project costs 'x' based up a salary of 'y' but by offshoring for a salary of 1/5'y' they will save money and the executive deserves 10% of that saving as a bonus, of course when it fails the executive has already received their bonus and has launched a bunch of other half-arsed schemes since then.

                As for the off-shorers they are coding for a price and they will contently code what ever crap they have been told to code no matter how piss-poor the results.

            • Re:Faulty Reasoning (Score:5, Interesting)

              by indian_rediff (166093) on Tuesday December 06, 2011 @01:39PM (#38282134) Journal

              Mod parent up. The number of people that discount the short-term thinking of outsourcing cannot be overstated (parse that - hopefully I wrote it right).

              I have looked time and again for over 10 years (having been laid off twice - once directly attributable to outsourcing and the second time to the current downswing) as to when this wave of outsourcng will change.

              PHBs will look at the bottom line alone.

              Let me give you an example. At a bank I worked at, we had a memo right from the top - for every local hire, there MUST be at least 7 overseas - otherwise the local hire is not allowed. I found the quality of work being done there sucked! Of the 800 odd people on various projects, there were more than 700 offshore - the rest were onshore - and I was privy to those rates. Offshore rates were 1/5 of the onshore equivalent. I remember one of the local bosses railing at one of the onshore representatives of the minions at the quality of code being delivered. It seems if a zero was entered into a field instead of a non-zero number, the web app would crash (or it was something equally stupid - please don't hold me to actual issue).

              Given that these banks took such a large amount of money from US taxpayers, the least they should do is to ensure that any new jobs they have are given to onshore people. Instead, they have gone extreme - and are offshoring more than ever. Ingrates R Us.

              Background: I am originally from India, one of the original outsourcers and have seen, with mine own eyes, the precipitous fall in quality of the offshore developers. Until about the mid- to late- 90s, things were not so bad. But Y2K changed all that. All and sundry became s/w developers. And the rest, as they say, is history.

              • by Darinbob (1142669) on Tuesday December 06, 2011 @04:15PM (#38284114)

                Ha, it's similar in US too. The web turned everyone into a "dev" even if they only know HTML and some high level scripting language. So now there's a glut of programmers that just aren't very good.

                As "Joel on Software" puts it, even if you're using Ruby on Rails and just push a couple buttons to create a web page, you still need to understand the fundamentals like pointers and recursion. If you can't understand those then you will have difficulty with abstraction elsewhere.

          • Re:Faulty Reasoning (Score:5, Interesting)

            by jellomizer (103300) on Tuesday December 06, 2011 @11:41AM (#38280290)
            Those who tried in 2000 probably have switch back or in the process of switching back, or out of business.
            Those who tried in 2010 are feeling the pain now.
            I am not finding any shortage for American Software Developers work for good developers.

            I think a lot of the rub is the fact the businesses are no longer tolerant like in the 90's to those unprofessional quirks of those IT people and expect a more professionalism in their organization. So the Jeans and Tee-Shirt are being replaced by Slacks and a collared shirt. Working flex time is pushed more to 9:00-5:00 and we are no longer getting Huge Salaries just to write HTML.
          • Re:Faulty Reasoning (Score:5, Interesting)

            by mcmonkey (96054) on Tuesday December 06, 2011 @02:10PM (#38282514) Homepage

            > It might take a few years...

            Yup, I've been hearing that since 2000. How much longer do you think? 20 more years? 50? A century? I don't think so. Show the PHB two salary numbers, he's going to pick the lower one, never mind any other factors (e.g. overall cost).

            Actually, it's already happening. US companies that are moving IS jobs over seas are behind the curve. Companies that shipped jobs over in the 1990s are starting to bring them back.

            One reason out-sourcing/off-shoring doesn't same money is management. You need on site management where ever the programmers are, but you still need the management structure at the home office to oversee projects.

            Another reason is just we just haven't figured out how to work in remote teams. There certainly are exception, instances where teams of people geographically separate have turned out a successful project. But those are the exceptions. In most cases, conference calls and shared desktops just can't replace sitting next to someone and looking over their shoulder at the screen.

        • by Billly Gates (198444) on Tuesday December 06, 2011 @10:47AM (#38279514) Journal

          Problem is software is an expense that adds little value to bottom line unless your a software company. Therefore go cheap and invest in more sales and accounting gurus who can better raise the stock price and bring better value to the shareholders. That is what is taught in business school and makes sense. You dont save anything as it never generates revenue.

          • by Lumpy (12016) on Tuesday December 06, 2011 @11:29AM (#38280078) Homepage

            "That is what is taught in business school and makes sense. "

            Yet the company I am at that has a non business school owner who goes against ALL the crap they teach at business schools is still here after 40 years and 3 recessions.

            All of out competition is now gone. The last one filed for chapter 11, 1 month ago. WE are the ONLY company now left on this side of the state while all the Business school morons cant keep their business running.

            I don't care if you have 20 phd's in business. you suck compared to a man that pours his heart and soul into a business and does the right thing before maximizing profits.

            Honestly, business school grads are some of the stupidest people I have met. They can't comprehend concepts like customer satisfaction, customer retention, talent retention, and paying people what they are worth, not what they will begrudgingly accept.

            • by King_TJ (85913) on Tuesday December 06, 2011 @11:55AM (#38280494) Journal

              Wish I could mod your post up higher (but hey, it's +5 Insightful as I speak, so what can a guy do, right?).

              I, too, work for a small manufacturing business where the owners are not from "business school backgrounds". They simply understand our industry and have hands-on experience with it, and do their best to run a successful company.

              I've seen plenty of other places run by the folks with "professional degrees" too, and typically, they get way too fixated on spreadsheets and reports, vs. having a firm grip on the realities unfolding right in front of them every day.

              You *do* want a few basic, easy to interpret and use reports being generated, so you can nip problems in the bud. (Say you've got guys out in the shop who start slacking off, pretending they're really busy when they're not? They might be pretty effective at making the people observing them believe they really are working as hard as they can. It's not that hard to pace yourself so you take 15 seconds to put a box on a belt, or make sure you cut a piece with the saw *slowly* to waste a little time without anyone noticing. But a good daily or weekly report on man-hours spent and output completed would "red flag" this behavior pretty quickly.)

              But keeping one's head buried in the numerical data seems to be the downfall of many an MBA out there. You simply can't base all your decisions on what produces the best numbers for you in certain columns.... You've got to actually care about what your business does (yes, even if in the short-term, that occasionally means taking a loss to please somebody).

              Take our business, for example. In the recession, we really took a beating and we had to do 2 rounds of painful layoffs. Still, we did what was needed to trim things back to an effective skeleton crew of employees who could keep the place functional ... and we held our prices as low as possible, and provided the same level of customer service we always did (even when we had to pay to correct problems for customers that weren't really our fault, sometimes). We outlasted one of our biggest competitors, who has been a thorn in our side for decades. (He responded to the downturn by running a barrage of expensive advertising and giving away special promotions and perks.) Now, we suddenly have almost all of his business, which is giving us a big boost moving forward.

              • by dpilot (134227) on Tuesday December 06, 2011 @12:35PM (#38281024) Homepage Journal

                Seems to me that some number of years/decades back, most of Corporate America lost its sense of direction/balance/mission. Today it's "all about the money," and personally I believe that's wrong. If you're a car company, and you're "all about the money" instead of "all about cars" you may not have failed yet, but you're clearly on the road there.

                Obviously you can't ignore the money. By the same token it's probably handy to have some MBAs around. But you need to keep track of who's in charge and what's the mission, and that shouldn't be the MBAs - it should be somebody experienced in the company's products.

                To switch from the car company analogy to the software company analogy, would you rather buy your software from a company that's "all about software" while managing to make a profit, or from a company that's "all about profit" while managing to make software? Which company do you think will produce better software? (or better cars, to switch the analogy back.)

        • Re:Faulty Reasoning (Score:5, Interesting)

          by nine-times (778537) <nine.times@gmail.com> on Tuesday December 06, 2011 @10:53AM (#38279602) Homepage

          I think you're overestimating the rationality of people when it comes to economics. People don't actually do things that are cheaper and more efficient. Most people in management will spend $100 chasing $2, and they'll get rewarded with raises and bonuses for doing it.

        • by tbannist (230135) on Tuesday December 06, 2011 @11:33AM (#38280158)

          The way thing work now, that's never going to really happen. It's the MBA effect. The goal of an MBA is increasing ROA, there are two ways to do that, either increase revenues or decreases assets. One is hard to do, the other is pure profit for the current quarter. That's why many projects (and factories for that matter) get outsourced. Reduce the assets and the magic number goes up. Brag about it to your peers and get promoted to some other job, the sucker who comes after you gets to clean up the mess.

          The "it will cost more later" argument won't do anything as long we allow disposable idiots to run businesses. That why it's so remarkable when someone who doesn't consider it their one and only goal to increase a magic number comes along and leads a company to (temporary) greatness. There's a convincing argument that Google, Apple, even Microsoft (among others), became huge because their CEOs looked beyond the numbers games and actually cared about the companies they were working on. Dell's the current example for the idiot CEOs who only care about numbers that don't actually mean anything, Dell gradually sold off it's assets to a Chinese company, now that very same company is in the process of cutting Dell out of all the businesses it used to own. Why? Because Dell doesn't own anything but a brand name and a web site, now.

          • by lightknight (213164) on Tuesday December 06, 2011 @12:03PM (#38280624) Homepage

            Same tactic politicians use.

            Sell off the capital buildings, then rent them from the new owners. Claim profits during your term, and put it into the programs of your supporters. Let the next guy figure out how to pay the rent.

          • by SecurityGuy (217807) on Tuesday December 06, 2011 @03:23PM (#38283430)

            No, it's not the MBA effect. *sigh* I have an MBA. I rant about the exact same things you do. They don't teach managing to the quarter or tweaking some stupid number to get a bonus. Quite the contrary, they teach building incentive systems that DON'T reward doing stupid or harmful things to your business. The "it will cost more later" argument is perfectly well respected by any competent MBA, though of course how much more and how much later matters. The damn sad thing is that if I come in and engage in a course of action that drives a company's revenue through the roof this year, but puts it out of business in 5, the market will put the share price through the roof and give me a ton of money. The market is not composed of MBAs. It's composed of fools. The only solution I can think of is simply not to take a company public, because when you do, you have to pander to fools rather than build REAL value.

      • by vlm (69642) on Tuesday December 06, 2011 @10:48AM (#38279548)

        Exactly. You should feel threatened, because quality frequently doesn't win out.

        There are a lot more McDonalds than five star restaurants.

      • Re:Faulty Reasoning (Score:5, Informative)

        by PCM2 (4486) on Tuesday December 06, 2011 @11:11AM (#38279810) Homepage

        His point is that, yes, managers are going to be blinded by that $14/hour price tag and go with that route, but those projects usually fail. They are pitched for too many man-hours up front and they usually run over, and even then the result often isn't up to snuff. The result is that they give up and hire American (Western) programmers to finish the job at market rates. Thus most of the "value" of the overseas effort becomes a cost overrun, but the worst part is that time to market suffers because the initial specification valued cost over time to an unrealistic degree. A company can only get burned like this so many times before cooler heads prevail.

        • by tbannist (230135) on Tuesday December 06, 2011 @11:38AM (#38280248)

          Only if the managers who made the decisions stick around. If they take their bonuses and leave, then it may be the guy who ends up cleaning up the mess who also gets the blame. After all there wasn't a problem until he pointed out that the work wasn't going to get done on time, and now he's spending so much money to fix a problem that was only supposed to be a small fraction of that to start with...

          Office politics can be as stupid and unrealistic as the real stuff. Also once the decision has been made, some people can become completely unable to accept that it was a mistake or that it should have been done differently. They'll blame someone else for hiring the wrong outsourced IT company or not tracking the project closely enough.

        • by nine-times (778537) <nine.times@gmail.com> on Tuesday December 06, 2011 @11:43AM (#38280328) Homepage

          A company can only get burned like this so many times before cooler heads prevail.

          That has not been my experience. I have seen businesses make the same mistakes over and over again, and cooler heads just never prevail. Aside from my personal experience, we see it all the time that some CEO gets hired to a company, they totally screw things up and leave in some level of disgrace, and then they're hired by another company to be the CEO and repeat the whole thing over again. We've seen "geniuses" at Wall Street almost destroy the world's economic system, get away with it and stay in their positions of power, and then they turn around and engage in the same behavior.

          People often aren't rational, and people often don't learn from their mistakes.

      • Re:Faulty Reasoning (Score:5, Interesting)

        by scamper_22 (1073470) on Tuesday December 06, 2011 @12:02PM (#38280588)

        I sometimes wonder if it's that business is *evil* or if they simply don't know. I know it's easy to assume they're evil, but the more I work in this field, the more i think it is simply that they don't know.

        Almost all of our business folks come from either a finance background or are a product of the industrial revolution.

        Finance... well all they want is to plug in some equations and compare numbers and that's the end of their thinking.

        Industrial management is all about GOOD PROCESS and fungible parts. You need a few skilled people to design the process and assembly line... then the people are replaceable cogs. 95% process, 5% people is they key to success in the industrial age. Because R&D costs are typically small relative to the manufacturing costs, R&D was typically allowed to do its own thing. If costs needed to be made, why cut the R&D... there's plenty of manufacturing workers (fungible parts) to cut.

        Now what do you when manufacturing is no longer a key component of your business. As in software. When business looks at costs... the only thing they can replace the manufacturing worker with in their minds is... the people in R&D. They're the ones making things. They cannot conceive of a world without fungible parts. Even though the fungible parts have all been automated (the whole point of computing). The compiler does the manufacturing. Yes, there are still some parts that are not fully automated, but that's just waiting to happen.

        They simply take all their old industrial age management techniques and try and apply it. Remember it is 95% process, 5% people. This is why you get such an emphasis on project manager, product manager, technical manager, programmer, workflow... They are trying their hardest to just build a process that will make projects successful.

        Now some companies do get it. The industrial revolution is over. You need to learn new skills. So the big tech companies for example... get it. It is 95% people, 5% process. It has more in common with a guild of craftsman or a profession. They luckily only need to deal with the madness of finance people. But at least they've rid themselves of industrial age management.

        And it is changing. The big companies that DO software do get it and have changed. Increasingly they're making their products into services (yay... cloud computing)... I don't see much of a future in outsourcing itself. Which I guess means if you feel threatened by outsourcing... I'd feel just as threatened being on the outsourcing side.

        Off shoring is another issue all together. If they can get very skilled people in another country for cheaper...they will and that is not the same as outsourcing.

    • by samsmithnz (702471) on Tuesday December 06, 2011 @10:39AM (#38279416) Homepage
      It's not because they suck, it's because they don't own the code. If you know you have to maintain a piece of software, you will spend extra time ensuring that it's maintainable and coded well. We have a large team in India and they are very successful, because they are part of the company and are building a career, not being a code monkey.
      • by schlesinm (934723) on Tuesday December 06, 2011 @10:49AM (#38279562) Homepage
        Outsourcing code development doesn't work unless you have some onshore owners of the code who are able to review for code quality and demand fixes when the quality suffers. I've been working with offshore developers for over a decade now. There are some that are really good and I felt confident giving their code just a quick once over review. There are others where I have to review the code thoroughly because they're not quite up to par (such as the time I had to write the Java time code interface for a coder after he failed three times to figure out how to do it). Without an employee owner for the code, then outsourcing is hit-and-miss for actually saving money.
        • by AJH16 (940784)

          Yeah, that really hits the nail on the head. My experience with outsourcing has been that about 1 in 10 to 1 in 20 depending on the place will be solid coders. The rest make passable grunt coders if you have a professional developer reviewing what they do and correcting their mistakes. Outsourcing seems to work best as a labor multiplier for a solid local developer/designer/architect.

      • by TheRaven64 (641858) on Tuesday December 06, 2011 @11:03AM (#38279722) Journal
        If they're part of the company, then they're not outsourced, they're just offshored. Often the two go together, but they are independent. You can move an office to a different country and you can move the work to another company in the same city. Or you can combine the two. This is usually when you get the worst results. There may be talented people in India, but if you're hiring them at one remove from a continent away then there's a very good chance that you won't be employing any of them.
    • Re:Faulty Reasoning (Score:5, Interesting)

      by Anonymous Coward on Tuesday December 06, 2011 @10:47AM (#38279510)

      My company outsourced a piece of a project (GUI redesign). The result looked good and met the requirements but turned out to be inadequate. No error conditions were handled, any change to the test cases caused it to fail. However, since they brought it in on cost and schedule they were given a larger piece as a follow-on. We ended up rewriting both the GUI and the second piece and were late by a year. You can blame the spec (they did) but no US developer that had to support the finished product would have done shoddy work. I think the outsource company did it deliberately because they expected to be paid to fix all of the problems.

    • by niftydude (1745144) on Tuesday December 06, 2011 @11:05AM (#38279736)
      I'll probably get modded down for saying this - but over the years, I've worked as a developer/tech arch in Palo Alto, Mountain View, Milwaukee and Portsmouth, and my experience is that the vast majority of US programmers also suck.

      The main problem I've had with Indian programmers is that a lot of them don't really understand english (even though it is the official language of India) - which makes explaining requirements more difficult, but at least they can do math properly.

      Not all overseas developers suck, and not all US developers are awesome. I can see why management would be willing to take the lower cost option, when they aren't guaranteed (or qualified) to identify and hire good talent locally.
      • by RobinEggs (1453925) on Tuesday December 06, 2011 @11:22AM (#38279960)

        The main problem I've had with Indian programmers is that a lot of them don't really understand english (even though it is the official language of India)

        English is an official language of India, and not the primary one. The primary official language is Hindi - you know, their native language.

        I realize it's vastly preferable that they speak English if they work for you, but you're implying there's actually something wrong with Indians who don't speak English, and that's absurd. There's nothing any more backward or stupid about an Indian who doesn't speak English than there is with a Canadian who doesn't speak French or a Belgian who doesn't speak German.

        Don't practice the cultural ignorance and arrogance that befalls other Americans. I think you're smarter than that.

        • by olliM (1239308) on Tuesday December 06, 2011 @12:23PM (#38280860)
          I'm from Finland, where we don't have English as an official language. I think there is something wrong with Indians who don't speak English, same as with everyone else who doesn't speak it: they are at a great disadvantage in the international job market. I'm not saying it's necessarily their fault, they may not have access to language lessons etc., just that it's a smart move for people from anywhere in the world to learn English.
        • by erice (13380) on Tuesday December 06, 2011 @01:29PM (#38281972) Homepage

          English is an official language of India, and not the primary one. The primary official language is Hindi - you know, a native language.

          FTFY

          There is no single native language for all of India. There isn't even a single native language for a majority of India. Hindi is is the most popular first language in India but native Hindi speakers are largely confined to handful of states of the North/Central area. India's high tech centers, where most of the outsourcing/offshoring takes place, are mostly in the South.

        • by Slashdot Parent (995749) on Tuesday December 06, 2011 @01:57PM (#38282382)

          you're implying there's actually something wrong with Indians who don't speak English

          Nobody is implying that a particular Indian is defective if he does not speak English. On the other hand, if the Indian that you're specifying your requirements to, in English, does not speak English very well, then the end result is going to be defective.

      • by Tablizer (95088) on Tuesday December 06, 2011 @12:18PM (#38280804) Homepage Journal

        Perhaps from business's perspective it works like this: Since we don't know how to leverage, motivate, and manage talent, we might as well pay less for the same suckage.

    • by next_ghost (1868792) on Tuesday December 06, 2011 @11:13AM (#38279834)
      You know the saying: Cheap, good, fast. Pick two.
    • Re:Faulty Reasoning (Score:4, Informative)

      by gweihir (88907) on Tuesday December 06, 2011 @11:25AM (#38280012)

      That is because management sucks too. And has problems dealing with the fact that there are business critical people that are more important than they themselves are and are not managers at all. I firmly believe that a lot of outsourcing projects really are driven by managers unable to deal with the fact that the engineers are a lot more important as individuals as they are and far less replaceable. And better educated. And actually have a clue on how to do their job, at least the good ones. That engineers generally (and justified) look down on management types may also play a role.

      Side note: There _are_ good managers. But they are even rarer than exceptional engineers, as there is no management education process that filters out the numerous duds.

    • Re:Faulty Reasoning (Score:5, Interesting)

      by donscarletti (569232) on Tuesday December 06, 2011 @11:58AM (#38280530)

      In response to the suck speculation. I know some really good Chinese programmers in Beijing, Shanghai and Guangzhou. They're not going to work for $14 and hour, unless you throw in a percentage of the company's shares and some serious pandering from management. Crap Chinese programmers cost about RMB¥5000 a month, about US$5 an hour, but prices climb extremely sharply after that. Outsourcing companies will hire those crap ones and pocket the difference, every time.

      There's nothing intrinsically wrong with Chinese, Indian or whatever programmers. It's just the Chinese companies, and I assume Indian companies who actually need to sell their own product want to hire the good engineers to get the job done and so they are in demand in the market and thus expensive. To an outsourcing company however, maintenance is an externality, they don't care if something is well engineered, just if it meets the requirements to the letter, or at least appears to then its good enough, so anything will do.

      Why would you go with a Chinese outsourcing company then? Well, I am in the business of making good software, but here's how it would go if I wasn't. I'd fly you on a junket and you'd stay in a 5 star hotel, paying for a few extra nights because who wants to go on an overseas trip without seeing the sights. You'd come to my office in Beijing, it is big, has a lot of people in it and they look like they are working hard. I would then precede to show you some professional looking slides and give you some serious false impressions as to what we have delivered in the past and I'd deliver it with such unerring conviction you would have to believe it. Then I would take you out to dinner, Peking duck, abalone and alcohol, I would invite some girls from the office, receptionists etc., who would smile at you and blush when you try to speak English with them, that's just what Chinese girls do, but you feel like they're into you. Then I would take you to do something else, grand sights, more booze, or a really, really good prostitute.

      Now, this is what a Chinese sales guy will give your manager: optimism, presentation and vice. What can you give him? Well, results presumably, but they come later. Up front you can only give him cautious estimates and a list of things that can go wrong. Why would anyone but a non-idiot manager choose a local team of engineers who know what they are talking about when he can have a free holiday to an exotic country and hear some really pleasing things?

      Outsourcing companies are there to make money, pure and simple. Nice things cost money, that can be good engineers (local or overseas) or it can be the sales team and what the sales team and their junkets and presentations.

      By they way, I'm obviously not North American, but I've worked with American engineers, a few of them have been really great, most of them have been quite ordinary, kind of like what you get here in terms of ability, but usually a little more methodical and steady. The advantage is mainly that you know what you're getting when you hire locally (or find your own talent overseas rather than relying on an agency).

  • by Troke (1612099) on Tuesday December 06, 2011 @10:36AM (#38279378)
    I think the unrealistic expectation is expecting any project to go well when you are paying 14 dollars and hour for a highly skilled position. No programmer worth their salt will willingly accept that pay, and if they do, you probably don't want them.
  • Agree (Score:5, Interesting)

    by 1s44c (552956) on Tuesday December 06, 2011 @10:39AM (#38279410)

    I've seen the work infosys and wipro do. They are the high end of Indian programing sweatshops yet everything I've seen from them stinks. They promise the world but don't deliver any better than a first year degree student could in any developed country. Except a first year student would be cheaper, has the same time zone, and speaks the same language.

    • by Kagato (116051) on Tuesday December 06, 2011 @11:11AM (#38279812)

      I think you hit on something, even if you haven't realized it. Companies don't hire first year students. The numbers have been dropping for almost a decade now. Companies get it into their head "why deal with college hires when we can use experienced off-shore". Well you can't keep a pipeline of experienced programmers in the US unless you make the investments in the next generation of programmers.

  • by Nova Express (100383) <lawrenceperson.gmail@com> on Tuesday December 06, 2011 @10:40AM (#38279424) Homepage Journal

    Having been involved in many outsourced projects, a number of problems tend to crop up again and again:

    1. Offshore programmers frequently lie about their programming skills
    2. Competent Indian programmers tend to do fairly well if given very explicit instructions, but are at a loss if something unexpected comes up. They tend to be less adaptable and nimble than U.S. programmers.
    3. It ends up taking longer than estimated, even for simple projects.
    4. Hand-holding and rework end up eating up all time and money savings.
    5. By the time an offshore programmer has skilled up enough to actually be useful, they leave for a better position. (Especially true for India.)

    To my mind, outsourcing programming is a management fad that is (hopefully) already falling out of favor due to poor results.

    • by vlm (69642) on Tuesday December 06, 2011 @11:05AM (#38279742)

      That shows a failure of the American programmer, not a problem with Indian programmers.
      1) Why can't an American lie? Liars expect people to lie, management, especially upper management, requires sociopath tendencies which equals lying, so, freaking lie about it to keep the boss happy. If a guy in India who just graduated school can claim 10 years C++ experience, why can't I claim 20 years? I have "CCIE-level" experience although not a CCIE. Actually, in the restricted arena of BGP I probably do, but I'm lost in switching. If I know its a BGP job, and the boss doesn't care if I lie, and the competition in India will lie ... why not? Sure, boss, I'll be a CCIE.
      2) The boss likes "needy" "unempowered" employees. So do it. Ask him dumb questions constantly to keep his tiny little ego boosted. Whats so hard about that?
      3) Tell the boss it'll take longer, and F off more. Again, whats the problem, you worried you'll wear out the foosball table or what?
      4) Don't worry about needing handholding or spending more time on rework than initial development. Just do it. The boss likes it; or he wouldn't be going to India where they do it all the time.
      5) Leave for greener pastures as soon as possible, preferably before the project crashes and burns.

      The price is "too low" for a american programmer because the boss is hiring incompetents in India. OK, the problem isn't the american can't get hired for an "incompetent" level job at $1/hr, the problem is the american is supposed to be applying for high paying high end architect and management jobs, which he can't do because he's only a programmer, but then again, the indians can't program, so its all kind of even in a way. And if thats they way the man wants it, thats the way the man gets it.

      This all seems to be "programmer getting frustrated trying to make and enforce management decisions while not being in a position of management authority". Just zen up a bit and go with the flow of reality. If the boss wants incompetent liars, don't whine about it, either become the boss and demand something else, or become an incompetent liar, or work elsewhere. Its simple, really.

    • by 1s44c (552956) on Tuesday December 06, 2011 @11:05AM (#38279744)

      You summed the problems up very well.

      I also found Indians say 'Yes' to everything even if they don't understand what you are talking about. That can cost days of lost work when you find out they didn't have a clue later.

      • by Rogerborg (306625) on Tuesday December 06, 2011 @11:18AM (#38279920) Homepage

        That's it, exactly. Same experience with Malaysia and Korean devs and managers. The answer is always "Yes, yes, of course, we will do that, no problem," to any question. I understand that it's partly cultural; it's considered rude to just say no. But it goes way beyond that: they will lie straight to your face (or over a video link) and actually get tetchy about being questioned, even when they have a track record of failures and screw ups behind them.

        Other fun things to deal with are the rapid staff turnover, the guarantee that they'll take the code you paid them to write with them to a competitor, and that you might find that you don't even have a copy. Keep the source repository under your control, and no commitee, no payee.

  • by deKernel (65640) <timfbarberNO@SPAMyahoo.com> on Tuesday December 06, 2011 @10:41AM (#38279438)

    I have yet to experience an out-sourcing project come in under budget. The typical project seems to run 3X what the initial projects costs presented, and that is based upon comparable pricing. When someone says $14/hr bill rate, my blood run cold and causes me to expect nothing but an abysmal failure.

  • Fungibility (Score:4, Insightful)

    by anvilmark (259376) on Tuesday December 06, 2011 @10:44AM (#38279488)

    Modern management philosophy depersonalizes employees into interchangeable resources. There is Management, Knowledge Experts and "Cogs".
    They don't even care that it's more expensive using cheap programmers to get a job done - it's worth it to them to not have to depend on any individual contributor.

  • by rbrander (73222) on Tuesday December 06, 2011 @10:46AM (#38279498) Homepage

    I'm watching a project from a place I don't work via friends that are there right now. A web store of sorts - the kind of thing that's a solved problem and they probably could have bought an off-the-shelf product. But no, it had to be bespoke and the local contractor subcontracted to, umm, a nameless Asian country (that is triangular, and a subcontinent - but nameless).

    To programmers that appear to have never USED a web store, much less written one. People who had to have the term "your basket" explained to them. As for brilliant programming, they have some kind of development environment (or lack of discipline in its use) that allows bug-regression: solved bugs suddenly re-appear when new code versions are introduced later to solve others. We're talking a year late on what should have been less than a year worth of project.

    I agree that working for less than half price gets you a lot of forgiveness for running even 100% over budget, but the cost on the local staff doing the requirements and testing has been high. Even in this economy, people have been quitting to get away.

  • by HappyHead (11389) on Tuesday December 06, 2011 @10:48AM (#38279552)

    I once did some contract work for a place that made the mistake of outsourcing a major programming job. My job was to maintain the outsourced code, and keep it functioning (barely) while the internal programming team worked on building a complete replacement from scratch, at half the cost, with the actual system requirements being fulfilled. I spent four months fixing bugs in deliberately obfuscated perl code, at consultant rates, because none of the internal staff they had hired was either able to figure out perl code in general, or willing to even try to sort out that mess. The outsourced programmers in question had the dodgy business practice of deliberately making their code difficult to read, and only including comments like:

    # 16426-b

    The code in question contained wonderful constructs such as pointless loops where a value would be iteratively divided by the numbers from one through a thousand, then restored to it's original value without being used in the altered form. I started the project with about 6 million lines of perl code, and by the time it was over and the replacement was ready, tested, and brought online, there were only 2 million lines in the outsourced code, including about ten thousand lines of comment code that had been added while I was working on it. I hadn't even looked at about half of the remaining code.

    After the initial work was done (poorly), the outsourced programming company announced that their code maintenance fees were being increased, thinking that their poor coding style had essentially locked the client in, and left them unable to get help elsewhere. The only staff member the company had who was willing to make the attempt unfortunately committed suicide after only a month of trying. (Personally, I believe it was unrelated, but the other programmers there claimed she was perfectly fine until she started working on that code... after two months of it I could see why they would think that.)

    So yeah, in my experience, outsourcing programming does not save money - if the company I did that work for had just had their own people write the original code, they would have saved a massive amount of money.

  • Outsourcing... (Score:5, Insightful)

    by Bert64 (520050) <bert AT slashdot DOT firenzee DOT com> on Tuesday December 06, 2011 @10:50AM (#38279564) Homepage

    If you pay someone by the hour, they will work as slowly as they can...
    If you pay someone by project, they will cut corners to finish quicker.
    If you pay someone by lines of code they will write bloated code.

    All of this is even worse when the developers are halfway round the world and you can't keep track of them so easily, and when you don't have sufficiently clued up people on hand to inspect the code they have written.

  • by Rik Sweeney (471717) on Tuesday December 06, 2011 @10:50AM (#38279570) Homepage

    But generally, this is what happens:

    1. Project is developed in-house.
    2. Management notice that though the quality of the project is good, it's too costly and by outsourcing it, they'll reduce the budget by 90%.
    3. Project is developed overseas, usually India.
    4. Management notice that the quality of the project is extremely poor and decide to bring it in-house even though it will cost them 10 times as much.
    5. Goto 1.

  • by DontBlameCanada (1325547) on Tuesday December 06, 2011 @10:56AM (#38279636)

    I think one of the major issues with offshoring to India or other locales is cultural.

    In most 1st world countries, employees are independent and, honestly, brazen enough to respectfully tell their boss/team-lead/architect about all the holes and errors they may have made when spec'ing out some work. This is substantially due to the fact that getting fired in those countries for attempting to improve the product quality non-existent or protected (wrongful dismissal). In emerging economies, the peon has no protection and if they dare "show up" their boss by pointing out problems, they face the real risk of losing their job and being deemed "unemployable due to insubordination". That may mean they end up destitute and out on the street.

    I've crossed swords with VPs and CEOs in my time, for what I deemed as was good for the company/product. I risked getting nuked, but felt that the risk was worth it because my intentions were good. Sometimes this has resulted in the leader swallowing their pride and adopting the change, sometimes I've ended up on the wrong side of a decision. Thinking back, I doubt I'd ever had done that if the downside wasn't getting a layoff but instead losing my home and being unable to feed my family.

  • Outsourcing sucks (Score:5, Insightful)

    by Decameron81 (628548) on Tuesday December 06, 2011 @11:00AM (#38279676)
    I work at a company that does outsourced programming for for US and EU companies. I have been working at this for the last 5 years aproximately (always in programming & analysis roles).

    I am really amazed at how much our clients undermine their own goals. I understand that cost is what drives programming jobs to my country - but I still have to see a really successful product come out of this. It would be difficult to find a single cause for this, but all of the following are at least partially responsible:

    1 - Low wages.

    2 - Lack of good programmers getting involved: some of the programmers you can get for the lower wages are great, some suck. I've seen companies taking just anyone interested to fill programmer positions for such jobs (you can train them, right?). Getting involved in the selection process may help prevent this.

    3 - Lack of trust in the the outsourced team: you can't think of the outsourced team as a bunch of mindless morons and expect them to care about your product. In those cases in which the outsourced team was a very good team, it didn't make the slightest difference because people was told what to do, and not to think - which makes hiring inexperienced people a pretty attractive alternative.

    4 - Giving more importance to cost & time, than to quality: what would anyone expect to get, when quality is secondary to time & cost? This is a huge way to undermine your projects.

    5 - Communication: communication is harder when people is spread all over the world. IMHO you need to compensate this difficulty by having some tool to help you keep in touch. In my current company, we use skype, and we keep in touch at all times with the client, which really helped solve this particular problem.

    6 - Planning: planning is much more difficult when delivering work to someone who is not right at your side.

    5 - Etc, etc.
  • by Chas (5144) on Tuesday December 06, 2011 @11:01AM (#38279690) Homepage Journal

    I know of a couple of software projects that are outsourced and getting good results.

    This one basically the formula for one of the best of them:

    Each team is overseen by a local (stateside/canadian) lead programmer who can actually review the code properly.

    There are guidelines in place for documenting and commenting the code. Don't follow the guidelines, don't get paid.

    And they pay close to what US programmers for a similar project would demand.

    As such, they never run out of a supply of candidates. They can afford to be VERY choosy about their hires. And they get damn good value for their money.

    Yes, they went through a few scammers during their early spin-up. But they had that sort of thing built into their expectations. They eventually wound up with a crack cadre of programmers and software products that are some of the best-documented I've ever seen anywhere. You could literally spend a couple hours reading the documentation and start working on the software.

    Then you get the guys who think they're going to set up a programmer sweatshop someplace and pay sub-subsistence wages to hordes of thousands and magically fall on the fair side of the "infinite monkeys" principle.

    I have zero pity for these fools and the crap they wind up with (if anything is ever actually delivered).

  • by JSBiff (87824) on Tuesday December 06, 2011 @11:03AM (#38279720) Journal

    This, mostly, doesn't seem to have happened yet, but I'm waiting for it to happen. . .

    Essentially, the problem is that when another company is being payed hourly to develop a product for you, mostly they care about selling you hours, not selling you good software.

    So, as long as the Indian companies are working at selling hours instead of copies of software, they perhaps don't have much incentive to really get it right. But, once some Indian companies realize they can just make the software and publish it themselves, selling directly to customers, then the incentives change - the customers won't buy bad software, so they'll need to make sure they develop the programs to a certain level of quality (perhaps they can get away with *lower* quality, as long as it's "good enough" and is cheaper than the competition).

    I might just be ignorant, but so far, it doesn't seem like theirs been any big self-publishing software companies developing in India (and China, and other developing nations that are starting to build tech companies), but I don't see why it couldn't happen, and that worries me far more than "outsourcing".

    I feel that the U.S. and Europe are far too complacent and far too smug about being "intellectually superior", and figuring we can keep our economy alive, despite losing manufacturing and lots of other jobs, by having a "knowledge economy", as if the rest of the world for some reason can't develop their own tech sectors that can out-compete ours. I mean, we already know that most of the rest of the world does better in school than U.S. students, so how is that going to work?

  • by Rocky Mudbutt (22622) on Tuesday December 06, 2011 @11:13AM (#38279840) Homepage
    I was the "Down" in Downsized, I was the "Out" in Outsourced. That made me down and out.
    I wanted to be the "Laid" in Laid Off but but my wife gave me "The Look".
  • by Speare (84249) on Tuesday December 06, 2011 @11:14AM (#38279852) Homepage Journal

    I've commented on this before, but there are GOOD and BAD reasons for outsourcing. All of these stories focus on the BAD (and they're truly horrible). It's easy to have schadenfreude about managerial disasters, especially if said managers fired you for this kind of project.

    If you're outsourcing something that is your core competency, you're going to rot away to nothing. They will walk away with your secrets and become the direct solution provider in your space.

    If you're outsourcing something that is creative or inventive in nature, you will fail. They are geared to bill hours, want to minimize their own labor by recycling solutions, and don't care so much about success because rework is still work.

    If you're outsourcing something that depends on today's level of dedication and problem-solving, that's creative and inventive. But also, you will fail because you don't own those rare dedicated and problem-solving employees. They're predictably terminated by their managers, replaced with cronies or the next batch of diploma-mill graduates. If you get something good out of an outsourced worker, they will quit for a better job tomorrow and you'll have to start over again. And there's usually a no-poaching agreement to make it harder for you to groom and select the gems from their labor pool.

    However, if you're outsourcing something that is rote, uninteresting, easily explained, clearly documented, often repeated, and does not rely on motivation or personality, then you have a chance. There's no reason for you to hoard and cultivate a set of employees who are best kept as fungible, as replaceable, as off-the-shelf, carbon-copies of each other as possible. Get them cheap, and get them to turn the repetitive process crank that you don't want to turn.

    Offshoring the project is identical to local outsourcing, but all of the challenges of time zone and language and culture are just magnified greatly.

  • by macson_g (1551397) on Tuesday December 06, 2011 @11:16AM (#38279890)
    I used to work for a Big Outsourcing Company Which I Refuse To Name, not in India but in Eastern Europe. And this kind of posts always make me laugh. We were cheap, but we were good. It is true that there were some pathological situations, ie we were charging client per man hour, and as a result our team was artificially inflated and we kept people who were completely useless and lazy, but were completely happy to receive minimal salary and do nothing apart of pretending to be useful. But the best people in the team were really, really good and well paid (with hourly rate exceeding the one that customer paid per mh!) and management was quite good too, managing not only the project, but working closely with the customer etc. And you know what? The code that we produced was better that the stuff created by customer's own R&D devs, and as result more and more work was transferred to us. And I can clearly remember how frustrated we were working with customer's own people, some of which were mediocre at best, knowing that they are getting 4x more for similar job. Eventually, frustrated by the situation, I moved to Western Europe myself, quadrupling my salary. But, at the other hand, we were not in Idnia, and the rate customer paid was much more that 14$/h (it was, as I recall, 20+EUR/h)
  • by gestalt_n_pepper (991155) on Tuesday December 06, 2011 @11:22AM (#38279962)

    If you can't get the guy down the hall to do it right, don't expect it come back right from India correctly either. Most software fails are due to poor planning, misunderstood or absent requirements, poor design with no input from customers, and so on. Yes, most of us who've worked with or managed foreign teams know that the coding from India (or Iowa, for that matter) may not always be top notch, but coding is the easiest part. Planning, useful documentation and management of a well conceived project is the difficult part.

  • by Dcnjoe60 (682885) on Tuesday December 06, 2011 @11:23AM (#38279972)

    The short answer is no, it only appears to. Data shows that whatever is saved by outsourcing new development is made up for by increased maintenance costs. I worked for a large government agency that would outsource new development and have the existing programmers maintain legacy code. Very often, they even paid for the training for the outsource staff, which came out of a training budget and not the actual development budget. Then when the project was completed, it was turned over to the existing staff to maintain.

    The problem with this approach is that the existing staff never comes up to speed, they don't know what went into the design decisions, etc. (yes, there is documentation, but it isn't the same as being part of the project). This approach is not unique to government entities, either. Many large businesses take this approach.

    While I was employed there, we changed the process so consultants were used to maintain the legacy code and trained the internal staff on the new technologies needed for projects. We went from being habitually over budget and late to on budget and on time.

  • by CHK6 (583097) on Tuesday December 06, 2011 @11:23AM (#38279976)
    The "Pick 2 of 3" rule:

    You can only pick two out of the three options. You then will get the opposite of the remaining option. 1) You want good quality workmanship. 2) You want the price to be cheap. 3) You want the work done quickly.

    If you outsource and pick #2 and #3, then you get the opposite of #1; bad quality workmanship. The other option when outsourcing for cheaper pay is #1 and #2, but this means #3, the work will be done slowly, then businesses will have to lose market ground.

    This is business 101 knowledge, yet our accountants and MBA grads have yet to master this simple rule.
  • by segfault_0 (181690) on Tuesday December 06, 2011 @12:30PM (#38280950)

    I'm sure there are geek teenagers in my neighborhood that would take 10$/hr to write code for my professional software product.

    If I do, is the story really that they are bad coders? No, the story is that I don't know how to run a business and I have shit for brains.

    If you executives/management can't put talent in the seats for the positions that count you will fail. End of story.

Each honest calling, each walk of life, has its own elite, its own aristocracy based on excellence of performance. -- James Bryant Conant

Working...