Outsourcing (again)

[Bhushan Jawle]

http://www.wired.com/wired/archive/12.02/india.html

[Jason Cox]

The article seems pretty biased, and the attitudes of the Indian tech workers they interviewed seemed very condescending despite the author claiming they "didn't take the high or low road"
I think "we simply do it better" may be a bit of a high claim, since most people I know acting as project managers over off-shored workers have not been happy with the results. It's really fascinating to hear someone with an H1-B visa complaining about the low quality of work from another country.
I think off-shoring has it's purpose, I think the company I currently work for has done a good job of using both foreign and domestic resources. We're not sending all of our jobs overseas, but it's hard to overlook the value of using off-shore help for certain aspects of our projects. However, if you don't keep a close eye on them, the quality will go down. It's really no different than domestic help, except that the project managers don't have that same physical presence and it's a detriment at times.
I also think that there are more to costs than just mere salaries, and it bugs me to no end to see that "Off-shoring is cheaper" when it doesn't appear to save that much money. It's one of the reasons I think we're limiting how we use off-shore resources. Outsourcing seems to be more about pleasing stockholders than saving money. It looks good on paper when you compare salaries and no other costs.
I certainly hold no grudge against your typical India programmer, though attitudes of arrogance are obnoxious regardless of origin. Still, most of the ones I work with (admittedly I'm referring to those actually in my office) are polite, sharp, and hard-working. However, what happens when this trend is over and people look past the bad corporate math? Are we going to yank those jobs from India and tank their economy next?
I think for this to work we need to take reasonable steps to look at outsourcing and see where it makes sense. I really question this tenet that it "saves money" and I highly question the "better quality" since I'm just not seeing it in our projects. Outsourcing jobs to India or other countries is not a sin (though personally I prefer India to other places for reasons I'm not about to get into) but simply diverting American jobs in the name of dubious corporate finances is a bad idea.
Besides which, I think the economy is hurting bad enough without taking more jobs and moving them overseas. Taking jobs away from Americans is the same as taking American money out of our economy, further weakening it. The premise of a "jobless recovery" is so weak that I can't believe some people still believe it will last.
I also love this exchange -

"We've done it before - going from farm to factory, from factory to knowledge work, and from knowledge work to whatever's next."
She looks at me. Then she says, "I'd like to know where you go from knowledge."

[Jason Cox]

On reflection, I really should have covered the other side of the outsourcing coin. Which is basically how the US technology professional allowed outsourcing to look viable.
The problem is when you hear the "average" software programmer makes $65,000 a year and the "average" software engineer makes $75,000 a year (Department of Labor statistics) the term "average" is a reference to salary figures and NOT skill.
The problem I see is that although every tech worker gets irritated when business people try to make technology decisions, too many tech workers routinely try to make business decisions. Not only that, but tech salaries are still pretty inflated and seem to have little to do with skill. A lot of tech workers still seem to think they can demand dotcom level salaries and are put out that companies won't pay at those levels.
I work very hard to make my customers happy. I make the technology decisions and I determine how long, how much, and how feasible. I'm not done until their happy, even if I think a feature or requirement doesn't make sense. I'll be more than happy to discuss some seemingly non-sensical feature, but it seems like most "worthless" features developers complain about are simply there for business reasons that are outside of our domain.
I wonder if outsourcing didn't become viable because companies got tired of dealing with the typical attitude of the American tech worker? I've never seen a profession outside of doctors and lawyers that was so riddled with arrogance. The attitude became "You can't replace us, so you'll tolerate our BS" and the corporate response seems to have been "Wanna bet?"
And instead of adjusting, instead of showing we're worth our salaries, instead of learning how to leverage off-shore resources and maybe even make our jobs easier, we resist and complain. Then the corporate exec in his nice suit looks over at the Indian tech with the H1-B visa and recalls how his attitude is "Yes, sir, I'll get right on it!" and compares that to the US tech worker who says "I'm tired of this kind of work, we should do it this way" and suddenly the idea of getting a bunch of Indians for bargain rates doesn't seem like such a bad idea.
Again, I don't think shoving jobs and money overseas is going to be anything but harmful in the long-run. But outsourcing has its uses. At the same time, what are we, the US tech workers, doing to prove that we're worth our salaries?
I see myself as a solutions provider, not an obstacle. I don't tell the business how to run the business. I provide answers to their questions, solutions to their problems, and efficiency to their operations. I pride myself in being a value-add and a team-player. I don't see myself above my business peers simply because I work with computers at a higher level than they do.
I wish I could say that was a typical attitude, but it just hasn't been the case from my experience so far. It's easy to sit around and resent Indians, it's more difficult to prove your own worth.

[Tim Holloway]

There are certain definite schools of thought, many of which are enumerated in the article.
One, however, which is not, is the school to which the author belongs, whose motto is "Offshoring's no problem, we'll just do all the innovating and let them take care of the grunt work".
Which, if I were Indian (Chinese, etc.) I would find offesnsively patronizing, as it implies that only "white people" can be true innovators.
Assuming nobody's noticed that Rudyard Kipling is long dead, it might be worth considering just how many successful American technology companies are headed by - and/or have senior visonaries - who are Indian or chinese, etc.

[Matt Cao]

Hi,
I think the author came from the school of 60's- Not a good journalist. Already take a position way in the introduction paragraph. May be his intension was an essay, but press for time so he submit that.
Regards,
MCao

[shay Aluko]

Here's a very nice article about how our corporate management is taking short-term decisions that are not in America's long term interests:http://www.pbs.org/cringely/pulpit/pulpit20040122.html
It is very instructive of how the race to the bottom will eventually affect all of us.

[Mark Ju]

Here's a counter point article: http://integrate.factiva.com/search/showarticle.asp?

[shay Aluko]

Originally posted by Chris G Lee:
Here's a counter point article: http://integrate.factiva.com/search/showarticle.asp?

I have read that article too and i am not suprised its in the wall street journal.
I don't expect much better from than the usual crap about employees learning to innovate and be dynamic. Soon this country will produce nothing of value except teeny boppers and american idols.

[Mark Ju]

Shay,
I'll have to disagree there. I think with the amount of research and innovation in the US, there are enough opportunities to last another century. The key is to "climb the value chain" as our business leaders like to say. How we do that individually will be different, but it just means we have to continuously try to find new ways to improve our lives.

[Jason Cox]

Originally posted by Chris G Lee:
I'll have to disagree there. I think with the amount of research and innovation in the US, there are enough opportunities to last another century. The key is to "climb the value chain" as our business leaders like to say. How we do that individually will be different, but it just means we have to continuously try to find new ways to improve our lives.

That sounds very good and all, but I wonder how people will actually do that.
I still know many tech workers without jobs, and they're being told that the jobs they used to do are now being sent to other countries. Many of these tech workers have gone out and gotten certifications and learned new skills, only to be told that they don't have any experience so the companies they apply for won't hire them.
There may not be anywhere to go but down from here.
Again, I think outsourcing may have it's uses, but I think the long term harm for short term gains is not going to balance out. Not only that, but we've already seen what happens to the economy when a large sector goes out of work. It's not going to affect JUST tech workers, but it's also taking away income from a group of people that usually do rather well. If that group no longer has that income to spend, then that means local businesses will be seeing little to no money from them, which can tank a business reliant on repeat business.
I know I was at the mall yesterday and saw far too many stores going out of business or closed already. Considering that I live in an area where tech jobs are scarce and companies are outsourcing heavily here, the damage is already apparent.
We are massively shooting ourselves in the foot. Anyone who likens software and customer support to manufacturing automobiles obviously doesn't appreciate the vast differences in the two industries.
EDIT - That last comment was actually in reference to the original article.
[ January 28, 2004: Message edited by: Rob Aught ]

[Natalie Kopple]

News from the World Economic Summit:
Outsourcing Casts Doubts on Globalisation Theory
http://economictimes.indiatimes.com/articleshow/448006.cms
"However, the paper said, the risking number of skilled, white collar jobs migrating from rich nations to developing countries is raising fears that, in fact, well-paid workers in developed countries will have trouble finding equally well-paid computer, design and medical jobs at home." [translation: if you export the highly paid computer, design and medical jobs FROM your country, your citizens will have trouble finding highly paid computer, design and medical jobs IN your country ]

"Zhu Min, general manager of the state-owned Bank of China, suggested that the US needs to �reposition itself. Manufacturing is gone, services are going. Research and development is still there. The US needs to move up the development chain.� [translation: You won't HAVE an economy if you don't do something]
We have to get this message to Washington DC.

[Mark Ju]

1.)
I'm really talking about the research and work coming from the university and corporate levels. Individuals will have to change no matter what. If it's not outsourcing then it's dealing with obsolete technology. Should COBOL programmers complain the world is moving to Java and .NET? Should they continue to get more COBOL certifications and then complain some more?
If the next technological advancement is coming out of nanotech or biotech or pharmaceutical tech, then why not go and learn those trades (this is just an example - I personally do not know how those fields are doing), rather than try to get more Java certifications.
The key is to keep improving (getting certs have marginal benefit, but it beats sitting on your arse).
2.)
Further, I'm not going to defend outsourcing, but I just want to point out all the US industries that are booming internationally, such as restaurants, clothing and general consumable goods. If (I should say when) India or China grows a substantial middle class from the tech migration, then it is also opportunity for US companies to captalize on them by feeding their insatiable appetite for American goods. So, seeing this trend, it might be wise to go learn Chinese and work for Pepsi or Starbucks.
This is what I mean by improving and adapting -- the world is dynamic, there are always opportunities.

[shay Aluko]

Originally posted by Chris G Lee:
1.)
I'm really talking about the research and work coming from the university and corporate levels. Individuals will have to change no matter what. If it's not outsourcing then it's dealing with obsolete technology. Should COBOL programmers complain the world is moving to Java and .NET? Should they continue to get more COBOL certifications and then complain some more?
If the next technological advancement is coming out of nanotech or biotech or pharmaceutical tech, then why not go and learn those trades (this is just an example - I personally do not know how those fields are doing), rather than try to get more Java certifications.
The key is to keep improving (getting certs have marginal benefit, but it beats sitting on your arse).
2.)
Further, I'm not going to defend outsourcing, but I just want to point out all the US industries that are booming internationally, such as restaurants, clothing and general consumable goods. If (I should say when) India or China grows a substantial middle class from the tech migration, then it is also opportunity for US companies to captalize on them by feeding their insatiable appetite for American goods. So, seeing this trend, it might be wise to go learn Chinese and work for Pepsi or Starbucks.
This is what I mean by improving and adapting -- the world is dynamic, there are always opportunities.

Sure, go and work for starbucks at $13/hr,id be fooling myself that making coffee is the next logical step for me after more than 15 years of education and advanced degrees. As for me i plan on moving up the value chain as far as possible and changing industry eventually.

[Tim Holloway]

Ok, so what I'm hearing is just more of the "only white people can innovate". I'm sure that any of the people from GE's R&D labs in Bangalore are rolling on the floor laughing. Then there's this very highly-regarded scholastic institute known as IIT.
A temporary advantage will only stave off the day of reckoning. I won't discount the value of innovation, just point out that while anyone can come up with winner ideas, that's just the starting point. Edison: "Genius is 10% inspiration and 90% perspiration". And so we get slaughtered because we're dead even (give or take) on the inspiration part, and can't even qualifty in the perspiration part. I have a wonderful little robot vacuum cleaner. It was designed in Boston. It's made in China. I know that the people who commissioned it are probably cleaning up , and it's providing ongoing work for a lot of factory workers, but only a few idea people.
And face it, for every Beethoven, there are probably 100 Homer Simpsons, even in our elite little world.
I read an interview with Larry Ellison in USAToday. He's one of the "move into biotech, IT's history" school. Did I mention that biotech research is also a major growth industy in India? There's obviously a virtually eternal demand for medical innocations, but even so, my biotech stocks have consistently underperformed my computer stocks year after year.

[Bhushan Jawle]

http://timesofindia.indiatimes.com/articleshow/msid-453424,curpg-4.cms

[Matt Cao]

Hi,
http://news.yahoo.com/news?tmpl=story&u=ft/20040130/bs_ft/10732181409090
Remember this is your election year to all of American ranchers. Make your votes counted. Otherwise, you will continue bitching and bitching.
Regards,
MCao
[ January 30, 2004: Message edited by: Matt Cao ]

[Joy Jade]

Maybe jobs will come back soon... candidates are voicing their plans about it.

[Joy Jade]

this is what the link points to. :
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The document you requested is not found. It may have expired.

[Tara Bhattacharjee]

How does one retrain himself/herself every 2 years with a family of young kids? Are we ever allowed to have and raise a family in the US? Does
Mr. George Bush know what he is talking about?

[Joy Jade]

Funny quote I read on Lou Dobbs... "to retrain laid off workers as walmart greeters" hehe
[ January 30, 2004: Message edited by: Justine Jade ]
[ January 30, 2004: Message edited by: Justine Jade ]

[Matt Cao]

Originally posted by Justine Jade:
this is what the link points to. :
Document Not Found
The document you requested is not found. It may have expired.

Hi,
India related must be a hot topic, it moves so fast.
http://story.news.yahoo.com/news?tmpl=story&u=/ft/20040130/bs_ft/1073281409090

Try that one.
Regards,
MCao

[Steven Broadbent]

What business is it of Indian Govt if American Govt orgs decide that federal work should be done in the US?
Would they feel the same if Indian govt work moves to China or wherever the next "cost saving" comes from?
Do some people think that a govt owes nothing to it's own citizens?
[ January 31, 2004: Message edited by: Steven Broadbent ]

[shay Aluko]

There is another onerous aspect of outsourcing that people have not considered. Large scale maltreatment of still-employed IT professionals. I have friends who are burdened with extremely heavy workloads and some of my friends in cosulting firms are given ridiculous targets for billable hours. A friend of mine has to bill 93% of his time to projects, how he finds projects within the organization is his own business. It is just horrible.American companies are given tremendous latitude to abuse their employees. Things they can't even attempt in India. I hear a lot of the multinationals even provide lunch and transport to their employees in India. The question is, for how long must this go on?, we'll have to see.

[D. Rose]

I do not think that picture in India is that good. People have work but they have to work like hell. Also they have to adjust working hours to get in touch with onsite people etc. Most of the times jobs are like testing,documentation etc except in some few good companies.
If you consider India's population, IT jobs are serving for only a very small fraction of it. Unemployment is growing. So India has its own problems as well.

[Tara Bhattacharjee]

And the fact is, it is near impossible for workers in India to be on time - unless there is transportation provided by the company due to traffic delays and over population. It is not a perk by any means.

[Matt Cao]

Originally posted by shay Aluko:
There is another onerous aspect of outsourcing that people have not considered. Large scale maltreatment of still-employed IT professionals. I have friends who are burdened with extremely heavy workloads and some of my friends in cosulting firms are given ridiculous targets for billable hours. A friend of mine has to bill 93% of his time to projects, how he finds projects within the organization is his own business. It is just horrible.American companies are given tremendous latitude to abuse their employees. Things they can't even attempt in India.

Hi Shay,
Those you encounter may have not experience working with serious company previously. Those companies treat your friends as an associate who does not have the negotiation power as a partner. It is one of the reasons why I recommend folks to learn the user side knowledge to a tee and time management. Technical is your trade that should not be counted as time consuming against user/client/customer.

I hear a lot of the multinationals even provide lunch and transport to their employees in India. The question is, for how long must this go on?, we'll have to see.

It is an operation issue. As in any operations, they will get improve with time.
Regards,
MCao

[Karthik Guru]

Originally posted by Tara Bhattacharjee:
And the fact is, it is near impossible for workers in India to be on time

That w'd be a good excuse for not being on time
But its not that hopeless (Bangalore). But yes, you have to leave a little early though. I heard that it gets pretty bad in the Bay Area, CA as well.

[Arjun Shastry]

{
I hear a lot of the multinationals even provide lunch and transport to their employees in India. The question is, for how long must this go on?, we'll have to see.
}
This will continue till those companies are benifited.The moment they see more profit somewhere else,they will stop this.Many companies provide lunch(which is not a seven course meal) at subsidized rates.For transport,they use vans and not Lexus.

[Tim Holloway]

Actually, way back when I started in this business, it was not uncommon for local employers to provide van-pool transportation and subsidized lunches.
Those days are long gone in this town. As are the days when an employee was a lifetime investment instead of a cheap, disposable commodity.
The reason that it's common in India is because the employee + lunch + transportation is still less that half the expense of the employee alone in the West.
I ride the bus and car-pool. Any expectations of owning a Lexus died in 2001.
[ February 02, 2004: Message edited by: Tim Holloway ]

[Matt Cao]

Originally posted by karthik Guru:

But its not that hopeless (Bangalore). But yes, you have to leave a little early though. I heard that it gets pretty bad in the Bay Area, CA as well.

Hi,
You show signs of westerner influence. I am not sure whom you are talking to in the Bay Area, CA. During the dotcom boom time, yes. Now, it pathetic as almost any cities in US. It is so bad that the public wonder why the speedy train existed? With that mentality, the Terminator Governor terminates the speedy train system throughout Southern California to Las Vegas, NV. His legitimate reason, cost money while state desperately needed money to function.
Regards,
MCao

[Ashok Mash]

Originally posted by Steven Broadbent:
What business is it of Indian Govt if American Govt orgs decide that federal work should be done in the US?
None, in general. However, I wouldn't be surprised if Indian government showed a fraction of enthusiasm OPEC nations shows to keep the price of Oil high, or American government shows to keep its people safe. Its in India's own interest to attract profitable business, which is not a bad thing to do, IMHO.
Would they feel the same if Indian govt work moves to China or wherever the next "cost saving" comes from?
Definitely not. China or wherever the jobs are going to, would feel the same, if India introduces any protectionist policies. But since majority of the client-base is outside India, Indian administration can't really do much anyway.
Do some people think that a govt owes nothing to it's own citizens?
I don�t know about others, but I think, by definition - Government is for people, by the people etc- it owes its people everything. But being particularly protectionist in one industry could hurt the overall trade relationships with partners and might invite backlash on other sectors as well. Remember the recent steel import issue with Europe? IMHO, for a capitalistic economy such as USA, being protectionist wouldn�t suit America in general, and may cause more damage to its economy than effects of outsourcing.
[ February 02, 2004: Message edited by: Ashok Mash ]

[Steven Broadbent]

Following on that logic, almost anything can be done more cheaply outside the us, so millions will have to accept the loss of their careers in the name or "the free market".
Seems people love the free market until it dumps on them.

[Bela Bardak]

Originally posted by Steven Broadbent:
Following on that logic, almost anything can be done more cheaply outside the us, so millions will have to accept the loss of their careers in the name or "the free market".
Seems people love the free market until it dumps on them.

Is it always a free market? The UK charges a 20 VAT tax on the billings of UK consultants - but not on Indian outsourcing companies. Hardly a level playing field, is it?

[Karthik Guru]

Originally posted by Matt Cao:

Hi,
You show signs of westerner influence. I am not sure whom you are talking to in the Bay Area, CA. During the dotcom boom time, yes. Now, it pathetic as almost any cities in US. It is so bad that the public wonder why the speedy train existed? With that mentality, the Terminator Governor terminates the speedy train system throughout Southern California to Las Vegas, NV. His legitimate reason, cost money while state desperately needed money to function.
Regards,
MCao

I was in Bay Area for couple of weeks 3 years back and i experienced it myself and it really took quite a while to get back home. Not sure what you meant when you say "pathetic". Has the traffic improved / it has gotten worse? Anyways dont bother.

[Matt Cao]

Hi,
By 'pathetic' I meant its lessen. Traffic congestion is a positive side of urban economy. It is an obvious sign that everything is going smooth as planned.
Regards,
MCao

[Sadanand Murthy]

Originally posted by Matt Cao:
Hi,
By 'pathetic' I meant its lessen. Traffic congestion is a positive side of urban economy. It is an obvious sign that everything is going smooth as planned.
Regards,
MCao

I disagree. It is, IMO, a sign of lack of foresight of city builders & engineers. Evidently the traffic is not going smoothly (or was that planned )