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Programming The Almighty Buck United States IT Technology

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 ;)"
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The Changing Face of Offshore Programming

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  • by GeckoFood ( 585211 ) <`moc.liamg' `ta' `doofokceg'> on Thursday January 01, 2004 @01:27PM (#7853206) Journal

    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.

  • by cduffy ( 652 ) <> on Thursday January 01, 2004 @01:29PM (#7853221)
    I don't know how the legality of the system works, but you can sue people for breach of contract and such here, I do not know if you can do that with overseas contractors, is it more of a "buyer beware" methodology?

    International legal battles can be done (though only if the amount in contention is over a certain minimum), but it's very, very expensive.
  • by ToddML ( 590924 ) on Thursday January 01, 2004 @01:34PM (#7853251)
    This is NOT "Keynesian" economics. As written, I doubt the poster has a firm grasp on the differences in classical and keynesian theory.
  • by The Snowman ( 116231 ) * on Thursday January 01, 2004 @01:46PM (#7853350)

    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 :-)

  • by Ezubaric ( 464724 ) on Thursday January 01, 2004 @01:50PM (#7853368) Homepage
    I don't think you realize what "Keynesian economics" is.

    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.
  • 'Opt'-Ed (Score:2, Informative)

    by Flave ( 193808 ) on Thursday January 01, 2004 @01:58PM (#7853416)
    BusinesWeek Online has an opt-ed piece...

    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.
  • by Anonymous Coward on Thursday January 01, 2004 @02:00PM (#7853433)
    Bangladesh is getting all excited about this ...
    [] _6 683.shtml

    The White House is preparing to ask Congress to approve legislation next year making it easier for immigrant workers to enter the U.S., according to a report published in the Wall Street Journal.
    "We need to have an immigration policy that helps match any willing employer with any willing employee," President Bush said earlier this month. "We're in the process of working that through now so I can make a recommendation to the Congress."

    The Democrats want more : the right to vote for illegal immigrants.

    I don't know who to vote for. Is there someone running who has a reasonable, moderate stance on immigration ???

  • Re:Whinging (Score:2, Informative)

    by Jesus 2.0 ( 701858 ) on Thursday January 01, 2004 @02:28PM (#7853632)
    China is communist in name only. They're a capitalist dictatorship.
  • by Johny_Quest ( 737061 ) on Thursday January 01, 2004 @02:37PM (#7853696)
    The real reason Dell moved corporate support back to the US was because they have run out of the engineering talent pool they have so proudly talked about using. This talent is moving quickly to non-voice BPO work with companies such as IBM, MicroSoft, Oracle, Accenture, etc. They have been using liberal arts grads, undergrads, etc. Computer support is difficult without the background. We've seen this before. Dell's follow-up announcement the day after stating they were committed to India was to quell investor concerns. As stated elsewhere, investors only care about one thing. Lehman Brothers cancellation of their in-house support required knowledge base with Sybase, something WiPro and TCS couldn't meet in the end. Indians are good at this - staying on top of the "hot" technologies. I don't think that the expertise (that comes with years of experience) exists there yet. BTW - Some companies are touting US support for all customers. MPC (formally Micron) made such an announcement recently. They took a jab right at Dell stating their top support is not just reserved to corporate customers.
  • by sevensharpnine ( 231974 ) on Thursday January 01, 2004 @02:45PM (#7853755)
    No. Running up a defecit is not Keynesian economics. Running up a deficit either during a slump or to encourage a slumping sector/industry is called Keynesian Pump Priming. Keynesian economics [] is a complex economic theory practiced by many economists today. Keynes was a visionary in the field of economics whose theory would later help to explain many of the economic irregularities present in the 70's and 80's around the world. If you learn economics from an undergrad-level text, you're generally learning from Keynes and those who refined his theories.
  • by vkg ( 158234 ) on Thursday January 01, 2004 @02:52PM (#7853806) Homepage
    In as much as it's got a 4000 year old university system, an excellent mathematical history, etc. etc. etc.

    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.
  • Nationalism (Score:1, Informative)

    by Anonymous Coward on Thursday January 01, 2004 @04:11PM (#7854328)
    What's funny about the outsourcing is that if someone from India claims to be superior to a U.S. worker that is OK. If a U.S. worker does the same then they are racist.

    I've worked on many projects with Indians before they took all the work and went home and from what I've seen the U.S. corps. has some big surprises waiting. What you've got is a bunch of women getting into positions of authority and making their litle cliques. They get rid of anyone that threatens them. In other words anyone with competence. The Indians come in and tell everyone what they want to hear and the kiss ass with great skill. It's not until all the people who really knew what was going on are gone and the project is 18 months over due that they start to realize the truth of the matter. By then Sanji has got his green card so he could care less.

    It makes me sick the way these U.S. corporations want to over charge and cheat the American citizens while at the same time they want to send our jobs overseas and think there will be no negative effects. How many U.S. corps now have people from outside the U.S. who are owners or high level managers and think that U.S. workers suck? They send our jobs over seas while making money off our economy. The tell us how bad our own workers are while at the same time talking about how great their workers are. Our government happily sits up on the hill doing nothing to help it's own people.

    One company I worked for "borrowed" it's source code from it's previous home. The code was supposed to do a critical check and we were supposed to just copy the code these brilliant Indians had done. You know how the code worked?

    return false;

    That was the code! No one would believe it but it turns out that this sensetive software that was in use in the medical industry didn't actually do what it was supposed to and no one knew. The Indians were hailed as the best programmers ever because THEY TOLD PEOPLE WHAT THEY WANT TO HEAR. If you want a bunch of liars that won't try to do the right thing and care about their work that's fine. Go Indian all the way.

    Of course the funniest thing about this is the work/profit relationship for U.S. companies. These greedy corporate execs don't see the writing on their own walls. They pay to train the Indians to do their work and then send them home to India and set them up to do this work.

    What's the problem with this? Well, if I'm an Indian writing software and I'm making $10000 doing all the work while the execs in the U.S. are making millions and they do nothing but collect checks then sooner or later the Indians are just going to leave the U.S. companies, start their own companies with the skilled labor our companies have paid for, offer the products at 1/4 the cost, and cut the execs out the way the U.S. workers were cut out. And most corporate execs in the U.S. are too stupid and greedy to see this coming.

    Look at the trend where companies are using Citrix farms for their software. Oh great, my hardware, software, and data is outside the country. If Sanji and sons decide to turn off my access I have nothing. What do I do? File a lawsuit against them? In India? The rest of the world hates the U.S. and our own leaders side with them against their own people. Clinton gives the Chineese our tech, opens up our borders through NAFTA. Cheney robs us blind and moves all the money offshore so that when the U.S. does collapse it won't affect his money. It's not in U.S. currency.

    The U.S. better wake up and realize that it's not in the position it is in because of divine right. All these greedy feminists that are taking control of our companies need to stop killing all the skilled labor because they don't like to be threatened and stop sending the work to India so that they can please their share holders.

    Nationalism in the U.S.? Don't make me laugh. We get sold out more and more day after day by our own leaders. We are told that if we stick up for ourselves we are racists. When we are told by others that we ar
  • by annielaurie ( 257735 ) <annekmadison@hotma[ ]com ['il.' in gap]> on Thursday January 01, 2004 @04:29PM (#7854455) Journal
    This article from a South Carolina [] newspaper sums up what infuriates me about the entire situation. Here we have Federal and state programs such as food stamps being outsourced overseas. One wonders how many unemployed Americans actually having to use the food stamps might be qualified to work on the help desks--not to mention the other projects described in the article. The politician who rants about "using tax dollars to erode the tax base" makes a valid point.

    Then there was this article [] 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?"
  • by Anonymous Coward on Thursday January 01, 2004 @06:04PM (#7855027)
    I think capitalism is the best socioeconomic system mankind has come up with yet.

    As many famous philosophers and scientists have been repeating for at least a century: unbridled capitalism is a bad socioeconomic system because it is unstable. In capitalism, wages have nothing to do with the value of the products produced, wages are determined by the law of supply and demand on the labor market. This creates social unrest because the profits end up in the hands of the few who provide capital but don't actually produce anything; and it also creates an insentive for those few to create and uphold a limited (controlable) amount of unemployment to keep labor costs down.

    I like the "survival of the fittest" aspect of capitalism, but I would rather have the citizens survive than a business.

    The survival of the fittest aspect is what destroys the social structure and puts an enormous strain on the environment and resources. Every society is built upon a social structure in which people must cooperate to achieve more than an individual on its own possibly can; that's why societies have laws forcing their members to cooperate. Capitalism introduces another set of rules which make it nescessary to compete on one level with the very same people you cooperate with on more fundamental level (by paying taxes and abiding the law).

    In the long term, this makes for people who are very aware of their dependence on the cooperating group but don't see this dependence as positive thing or a nescessary fact of life but as something that threatens their economical existence and limits their freedom, resulting in socially challenged people who are indifferent or even hostile towards the cooperating group they belong to, destroying the very roots of society. (Einstein wrote an interesting essay [] about this more than 50 years ago.)

    PS: I'm not rying to start a flamewar or a thread of political deliberations, it's just that capitalism has both good and bad aspects. In the past these bad aspects have lead to class struggles and revolutions; while the more moderate forms of capitalism of today (all tainted with socialism) still lead to environmental problems and societies of indifferent individuals.

  • by rollingcalf ( 605357 ) on Thursday January 01, 2004 @06:46PM (#7855305)
    "Currently, while companies can easily move money around the world for hiring in cheaper countries (aka globalization), the free movement of labor is very restricted. Perhaps freeing this up would attract labor to the US, which, while cheaper, would create a less extreme situation, since these immigrant employees would still have to be paid with a US cost-of-living in mind."

    That's exactly the problem with the current form of globalization -- it is too one-sided in favor of the corporations. Companies can drive down labor costs by being able to send work to cheaper locations, but workers can't so easily push up their wages by moving to countries where the work is more lucrative.

    If Indians were as free to move to the US, Canada, Europe, or Australia as the products of their work can, the employers in India would have to pay more to keep them from fleeing, which would decrease the wage difference between India and the other countries.
  • by Ezubaric ( 464724 ) on Thursday January 01, 2004 @09:45PM (#7856424) Homepage

    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.
  • by Anonymous Coward on Thursday January 01, 2004 @11:08PM (#7856853)
    Those bids are fake. Many unscrupulous (or simply very stupid) people give low bids, and then want more money to finish or "touch up" the project they did half way or less than half way. The people who use those sites regularly to get jobs done can recognize a looser when they see it (most of the time). Note that a script posts the same chatty note and bids $18 on every single project; you have to filter those out just like penis bird or GNAA posts.

    Anyway, the strategy on those sites is to do a good job for someone so that they contact you directly afterwords for further work, not posting the bid on the site at all. The guys posting there get burned a few times and learn to appreciate reliability and honest assessments.

    If you have the time, scan the sites for a few weeks and then submit bids on a few projects you think you can do in your spare time. I believe you will find that it is possible to make money that way, maybe without the salary or stability you desire, but survivable and you make contacts that can lead to other things.

    I think it's a good excercise to do even if you don't need to, because it gives you a confidence and perspective. You will find that doing jobs that are widely varying in nature gives you ideas and insight to apply at work. You will be less susceptable to anti-foreigner "Know-Nothingism" scare mongering. You may give up weekends for a month or two, but six months after you have done 2 or 3 projects, you will be happier. And if you are laid off, you will live on Ramen and cheap hot dogs for a few months, but it will not be a big deal.

Porsche: there simply is no substitute. -- Risky Business