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Offshore Outsourcing Threatens Offshore Outsourcing
theodp writes "India offshore tech support companies may soon face job losses as U.S. companies such as IBM, Intel, Hewlett-Packard, Oracle and PeopleSoft explore countries with even cheaper sources of technical labor, including Romania, Russia, Hungary, the Czech Republic, the Philippines, Singapore, Thailand and Vietnam. Concerned that outsourcing might be outsourced from India in the near future, a Bangalore call center owner said 'It's hard to know where it will all end. Is there a country where people will work for free?'" There's a Newsforge story about the same subject.
So stop competing on price and start offering a good, high quality, reliable service that people will pay a little more for.
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This reminds me of the story of Saudi Arabia and mideastern oil. Way back around the turn of the century, there was no great oil industry in the Arabian Peninsula. They were trying to find something to do with this deset wasteland. Then, the US comes in, offers to pay the countries (then Saudi Arabia was the focus) 1 penny per barrel exported, all drilled by the US, worked mostly by US oil workers. Now, we see what has come of this situation... Should we be as worried about tennis shoes and cheap nylon jumpsuits?
Speak for yourself.
I think there are multiple reasons here...
Most of the countries named have an actual infrastructure. EG I doubt Romania, Russia, Hungary, the Czech Republic have electricity problems.
Many of the Eastern European countries are not that far away from the Western markets, with some actually joining the European Union.
All in all it just makes for simpler business....
Funny though... (in an ironic sense)
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
Ever tried to force an open-source developer to change the design to meet your needs? Especially a large project not in a mode where they are begging for respect by pandering to anybody who will deign to email them.
India offshore tech support companies may soon face job losses as U.S. companies such as IBM, Intel, Hewlett-Packard, Oracle and PeopleSoft explore countries with even cheaper sources of technical labor, including Romania, Russia, Hungary, the Czech Republic, the Philippines, Singapore, Thailand and Vietnam.
What's good for the goose is good for the gander. American employees hopefully won't lose any more jobs than they have already; but it kinda sucks for the Indian employees who are going to be out of work now.
The biggest problem with a global economy is that it caters to the lowest common denominator. The second biggest problem is, you more often than not get what you pay for. I have to wonder if American IT companies are even concerned with the quality of their technical support anymore?
!#@%*)anks for hanging up the phone, dear.
Kill or be killed. Always has been and always will be.
You can't tell the RIAA to change its business model without by being prepared to do so yourself. Be flexible and keep with the times.
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Cheap website reseller hosting Dragon Action Figures
A quote from the original Wired article...
Farhat Gupta, owner of several Bangalore call centers, said that little attention is paid to technical training, as "all the answers are always on the computer screen in front of the workers. We exist for people who do not want to use the Internet themselves to find their own answers."
The only time I ever call technical support is when checking the manual and web doesn't get me the answer. If the person on the other end of the line has no more information available to them, what's the point?
Personally, I think the multinats are on to something. They're cycling through countries, creating artificial "boom-bust" cycles in employment.
Take for example, the automobile industry. In the early 1980's, the US auto industry had some of the highest wages/benefits for auto manufacturers in the world. Alot of those jobs went overseas to Japan/Korea who (at the time) had lower wages (and better quality). This depressed US wages. Now, the reverse is true. Both German and Japanese automakers see that US wages are lower and have located plants here.
So goes it with IT. US coders were first to the trough and wages went up. Then the multinats moved to India who trained their people well and had low wages. Indian coder's rates go up and now the multinats are headed for Eastern Europe. As tech wages get lower in the US and we refocus on quality, the multinats will move coding operations back here and the cycle with start anew.
"We're sorry, but the website you're trying to reach has been disconnected."
Yeah, those Indians sure are living the high-life financially at the moment.
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The history of the textile industry, I think, gives a pretty clear indication where the future of IT is headed, particularly due to the big trend of American corporations to outsource to India over the past few years.
The textile industry, at least what I consider the modern, industrialized version of it, began in and generated considerable wealth for England. Then, with the promise of cheaper labor, the bulk of textile manufacturing moved to the Americas, specifically the Carolinas, Georgia and a few New England states. The total generated wealth of the industry started to decline at this point, and another disturbing trend started as well. The distribution of the wealth began moving to a smaller percentage of people, namely the factory owners. Again, the prospect of cheaper labor induced the factory owners to move the bulk of textile manufacturing first to Mexico from the United States, then to the Far East from Mexico.
The important things to remember is that the total wealth generated by the textile industry declined with each geographic hop around the globe, and that fewer and fewer people got a larger and larger percentage of the total wealth of the textile industry.
How does this relate to IT? Well, considering that in the late 1990's we saw a mass movement of IT jobs for the US to India, and the associated wealth generated by the IT industry decline, I think the example of the textile industry is playing out again. Soon, the Indians who offered such low labor rates to win contracts and jobs away from American workers will be on the other side of the equation.
Russia, Eastern Europe and probably some African countries will do to India what they have done to America. The sad thing is that while India has been "carpet-bombing" the IT industry in the United States over the past few years with cheap labor and low costs, ultimately they've been laying the ground work for their own, future demise.
If all you offer is low costs and a cheaper price, then there is nothing to keep customers loyal. As soon as someone else comes along with a cheaper price, your customers will move to them. All because of the trend you started!
To some degree the former colonies of England and America will always have an advantage. These would be mainly India, the Philipines, and South Africa. These countries hve people who learned English at an early age and understand US/UK business habits. Jobs such as customer relations would work best there. Even software development involves a lot of communication. This is possibly why India seems to have beat China and Japan.
I have commented on this before to the people on slashdot promoting free trade. I told them that this was not about helping the people of India, and as soon as they got too "uppity" the corporations would drop them on their face and move somewhere else. See, folks, this isn't about helping out poor countries, this is about making corporations rich. It's not about exporting capitalism, it's about importing a 3rd world standard of living, which is why so many people around the world are against this. It's about making a market place, a product out of entire countries, whose populations are shopped by corporations, much like individual slaves were shopped for in the early United States. The message in return being sent to Americans isn't,"Thanks for helping us get to where we are.", but instead was, "Other countries are out-competing us, you better start working more hours." Of course, what they don't state explicitly, is that you are simply competing with another branch of your employer in a different country.
I run a company in Holland that just does this.. leverage eastern Europe to achieve similar cost levels but better control and quality. Budapest is a 1.5 hour flight from Amsterdam and is in the same timezone. Don't forget, these are the guys that during the communist era were reverse-engineering western technology. I have NO idea why companies continue to develop technology anywhere else.
Why is Singapore included in the list? It's a tiny island-state: you can see the entire coastline from the air. I suppose IBM can buy the entire island to staff one of its minor divisions (I'm kidding!). It has first-world living standards, so that would be the last place I would look for cheap labor. Sure, they speak English, but so do most Americans. About the only advantage I can imagine is having a 12 hr timezone difference is handy for tech support call centers.
I don't know much about the whole situation, but consider:
Serious Sam is considered one of the most fun games of late. It cost $20 at the store. The developers are all in the former Yugoslavia. The cost of living in Yugoslavia (and living wages, etc) are *tiny* compared to the US. Not only do they not have to sell a lot of games to make an equivalent amount of money as they would if they were based here in the US, but it proves that there are LOTS of creative and talented programmers elsewhere who can produce QUALITY work and still make a good living for themselves. Personally, I love seeing other countries offer up their best and brightest, it ups the bar for the rest of us. I like the competition!
If you were me, you'd be good lookin'. - six string samurai
1) Indian labour is cheaper than Eastern European / Russian.
2) Russian offshore-development industry is much smaller than Indian one (both in absolute terms and per capita).
3) There are no significant growth reserves (this also applies to Eastern Europe).
4) The existance of a few successful companies doesn't constitute an industry (or a threat to India).
5) Without initial investments you can't create a large IT industry. India did those investments.
6) There are no real figures that indicate this process of "outsourcing outsourcing" is actually happening.
7) etc.
Usual sensationalistic journalism. Bettet than Blair's inventions, but not much better.
Future Wiki -- If you don't think about the future, you cannot have one.
Wow. Now I really want a time machine to take me back to 100 years ago. Because according to you, before the advent of public schools, the world was a utopia.
But what you don't realize is there has been a hundred year effort since the advent of public schools to train free humans to be part of an organization rather than think for themselves.
So the world was filled with clones of Plato and Aristotle, filling the world with enlightened thoughts. But tell me, if the world was filled with altruistic free thinkers, who formulated and implemented this vast conspiracy?
This is what the study of sociology was originally created for. This is why books like Brave New World were written. This is why you spend 16 years of your life in school.
One would suspect, especially one with a sense of humor and a taste for sarcasm, that Brave New World was written to satirize this type of world and make free thinkers examine their own world. (Oops, no more free thinkers. Blows that theory to shit.)
The modern system of organization exemplified by the corporation was the product of vast studies and research, it permeates our very existence in every way. It was done so that people stop thinking for themselves and do what they are told.
And you escaped this web of mind control, how?
It is a difficult concept because simply having free people live together does not produce the amoral behavior found in corporations. It requires a certain kind of person. That kind of person must either be trained in a school or desperate. It is usually the former.
So, in this utopia of pre-public education, there were no violent acts, violations of others rights, or crime of any kind?
Your apparent ignorance of this world wide trend over the last 100 years proves you are a dumbass. Don't be so quick to judge.
Don't forget to refresh the tin-foil in your hat. Cheers.