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The Changing Face of Offshore Programming
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 ;)"
Don't expect any success with simply screaming "Buy American". Offer a better value proposition.
You are closer to the customer, not thousands of miles away.
You understand their problem better than some Indian programmer who doesn't truly grok the underlying American business practices being codified into software.
You are operating in their time zone.
etc.
That will win business a lot better than trying to shame a potential customer into paying more just because you are an American.
Democrat delenda est
Although the "Buy American" campaign seems to be a great success in Iraq (thanks Dick!), I don't think it will go down too well in Old Europe.
This is keynesian economics at its best. Acutal supply and demand. Now that contractors and programmers in the states are worried that all their jobs will move over seas, they are lowering their prices. Chances are US based companies would rather do business with someone they can get of hold of, and 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?
:)
Now you can expect the overseas operation to start lowering their prices or adding more value to their service, and vice versa until it eventually balances out, and once that happens most US based companies would probably prefer to work with someone based locally.
Doctors may not have to worry about this problem of oversea contracting since you still need to see them in person to do the best type of work. Lawyers on the other hand may not have the same benefits
Make me your friend. All my friends get +1 modifier and I need friends :)
There's nothing wrong with siding with your own kind. It's not racism - it's common sense.
Racial supremacy is not "common sense". "My own kind" is the human race. Yours must be the Pure Master Race of Aryans.
"Who cares if an Indian can do a job better: they are Indian"
Except that they can't. Here in the US, I can keep track of my team and teach them what they need to know. If the work gets outsourced, then all you end up with is a large number of junior level programmer with no direction. It's simply not effective. Then again, neither is hiring 200 programmers for a project.
The real problem is that buisnesses are looking for the sweet spot between quality, productivity and price. It seems counter-intuitive to companies that a smaller team of more experienced programmers will be more effective than a large team of juniors. They think that a senior developer simply costs more, and that they'll still need the same number of developers.
Javascript + Nintendo DSi = DSiCade
Protectionism is stupid. American manufacturing workers have had to adapt to their jobs moving abroad since the end of World War Two, and it's caused enormous economic hardship here - but given hundreds of millions of people abroad new hope and new life. Sweatshops may suck, but they're better than making a living picking through garbage dumps, and that's often the alternative people face.
In the long run, this is one world, and one market: individuals should be free to trade ideas with anybody they want, and in most cases goods and services too.
Why shouldn't somebody in India, or Taiwan compete with me for my clients? No reason I can think of: it might suck for me, but it's going to be great for them, and probably for my clients too; the competition helps everybody except the losers.
America enjoys it's massive economic and social advantages for two reasons: the huge natural resources of it's land, and the incredible hard work and ingenuity of it's people. I think that asking the Government to step in and interfere with free trade in an otherwise free market (as software is now) simply to keep domestic prices high is exactly what landed us with a moribund and over-subsidized farming system, a largely uncompetitive and second-rate automotive industry and so on.
Repeat after me: government interference in markets, other than to address market failures or personal safety, is bad for the market, and bad for those who buy and sell in it in the long run. We have a history of lobbyists destroying the global competitiveness of their industry: don't become one of those people.
So what does that leave for the domestic programmer? Well, at one end of the spectrum, there's the stuff which is too small to outsource: the transaction costs in specification and organization are too large to make it more efficient to outsource.
And on the other end of the spectrum, there's the stuff which is too important to outsource: areas where people will pay a premium for domestic labor because it has to be done fast, and a risk of misunderstanding or second-rate work makes outsourcing unattractive.
But in the middle? Get used to the pressure, folks, as generations of your forebears have in other industries as the rest of the world began to catch on... First mover advantage only lasts for so long.
Hexayurt - open source refugee shelter,
"Only after that come the other nationals. Race has nothing to do with it. Having such priorities is natural and common sense."
That is the worst type of patriotism. Clearly, if a foreigner does a job better than an American, the foreigner should be favored. THAT is common sense. What country someone lives in has nothing to do with anything in such matters.
Absolutely. They were ALL ABOUT "Buy American" for years and then when they got big enough, they used their size to crush competition by lowering prices by going to offshore companies.
There's a ton of websites out there chronicaling WalMart's abuses.
Two of the biggest culprits behind outsourcing are Accenture and Mackenzie.
Accenture, which used to be Arthur Andersen, the same assholes responsible for Enron. Why wasn't that company's back broken after that fiasco? They single handedly destroy the life savings of ten of thousands of Enron employees and now they're getting paid to tell US employers to outsource?
Oh yeah, and they're incorporated in a tax haven, so they aren't paying their share of taxes in any of the countries in which they do business.
I fucking hate consultants.
Mind you, I'm as pro-capitalism as they come, so being driven by the battle cry of "returns!" is a good thing, IMHO.
I think capitalism is the best socioeconomic system mankind has come up with yet. But some people get into it a bit too much -- mainly the CEOs at the top who think making ten million per year isn't enough, so they do various things to hurt the people at the bottom of the ladder (cut wages/benefits, outsource, etc).
I like the "survival of the fittest" aspect of capitalism, but I would rather have the citizens survive than a business. Outsourcing is painful, but I think eventually, as the author of one of the articles says, equilibrium will be reached. Hopefully few of us Americans get hurt in the process.
24 beers in a case, 24 hours in a day. Coincidence? I think not!
You can't both have the cake and eat it.
You mean, you can't eat your cake and have it, too. Remember the arrow of time here. If you couldn't eat the cake after having it, what would be the point?
If you won't, please stop acting like liberals or ayn randians. A true liberal would understand the necessity of moving production there where it is least expensive.
I think you are also confusing liberals with libertarians. To put it in the terms of Karl Marx, a liberal believes "From each according to his abilities, to each according to his needs" while a libertarian is more inclined to believe "From each according to his needs, to each according to his abilities." Liberals believe that group achievement is enhanced by providing for individual security, while a libertarian believes that group achievement is enhanced by individual freedom.
I work for a major company which is now trying to outsource my J2EE programming position to Brazil.
Its almost too funny watching it go so wrong.
Our group has for years fought with the business group over software requirement specs. What we end up building almost always diverges from what they had in there minds. Yes we create software requirement specs with mock up and all that. Yet most of these are in business speak, and can be interpreted in many different ways.
Now they are attempting to outsource to a CMM level 3 development group. The thing is the Brazilians require the software requirement specs to be in precise use cases covering every function that can possibly take place. In fact they will not even start working on a project until this document has been created and signed off on by everyone and their mother.
What has instead happened is the business has no idea how to create software engineering specs. They can't effectively communicate this through the middle management hell that is spread out over 3 countries. The Brazilians effectively sat on their asses for 3 months, and documented the fact that they did. Once they finally wrote something it didn't integrate correctly with all the systems that we have in place in the USA, because there was nothing spelling out the fact in the specs. Now the project is late and everyone is pissed.
Somehow this is better than paying me extra to know the systems, to interpret what business really wants (and sometimes get it wrong), and get things out on time.
In short I am not afraid, in fact I am looking forward to the time the come back to me needing help and I ask for a big fat raise!
We were all to "special" to form a union back when we had some power. Now we have no power because of the ease of offshoring, but we want to pick up the union battle cry "Buy American!"
All of you Overpaid twits that were worried that a Union would not help you because you made more money than the average joe, well some jerk in India has your job now, because you didn't want a Union.
If voting were effective, it would be illegal by now.
Outsourcing always seems cheaper on paper but it often turns out that it is not as flexible as inhouse or that the costs for being as flexible are actually higher. Not that it matters by this time the manager who signed the contract has had its bonus and is busy on the next bone headed move.
Let me give an example. Local school wich also gave night classes had a cafeteria. It would do cheap cheerfull dinners so you could go straight from work, eat there and then go to class. Or if your class was early the other way around. GREAT. Then they outsourced the caferteria it promptly closed this great service.
I seen the same thing in other companies. They outsource the cafeteria lady and all of a sudden the office staff has to do things like arrange cake, late night food for when a department has to work overtime and so on. Worst case I seen had us using our own Microwave and cooker since we were not allowed to touch the equipment in the kitchen since it didn't belong to the company. Great fire hazard.
There was once a time when companies did everything themselves. They maintained their own cars, had their own doctors, had a few holiday places to send employees too. This was boomtime. Then companies started to focus on their core capabilities and outsource or sell anything that didn't belong. We been in a downward spiral ever since.
I WANT MY BLOODY DINNERLADY BACK! An old fat woman who knows everyones birthday and gives them a little cake at lunch and puts up a x-mas tree with cookies.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
I'm starting a new position this coming Monday. My new employer was dissatified with the output of an outsourcing / consulting firm.
They used a mixed model, with US based management and design, and Indian grunt coders - the major difficulty was that the software modules delived to date failed to meet specifications, event the specifications originated by the outsourcing vendor.
Hopefully, this will have a better outcome than than the last time I was taking over an outsourced project. This past summer, I never was able to obtain a full copy of the source code archive, documentation or specifications from the Ukrainian outsourcing company - I did obtain a sufficent subset to see that over half of their code would need to be rewritten, refactored or simply discarded before the project could be delivered to users.
Caution: Do not stare into laser with remaining eye.
Racism may be one factor but there are other issues also. In some side note related to recent gas explosion in China it was noted that more than 90,000 people have died in work-related accidents from January to September 2003. This figure is more than 10 times larger than in western Europe where typical rate is 8 deaths to 100,000 people. Based on stories there is also quite of lot serious accedents also, and one is typicaly paid little or nothing for losing a body part.
If you need to pay lower salaries and can omit some safety, health and environment protection costs it can be economical to have people to replace robots. If people in cheap countires will ever get rights to ask for compensation, the current asbestos liabilities are just small money.
As an IT worker, there is probably no great risk of losing leg, hand or life but probably ones work conditions are worse than on places where you can complain that 95Hz CRT gives you an headache and you want TFT.
Really, it did. All of those jobs have gone abroad, and as is fairly obvious, eventually it will happen to software too.
You can't fight that.
Protectionism is pushing against the tide. I don't necessarily like the results any more than you do, but those who deny the future fail to prepare for it.
Hexayurt - open source refugee shelter,
Normally I don't reply or even read what anonymous cowards post, but I feel compelled to say this.
I take the farmer analogy and apply it to today, a farmer would reap the seed they sew and eat the food they produced. This is similar to our augmentation of nature, we do jobs, get money, and can afford the things we need, want, and earn. Yes we live in a society of consumeristic whoredom never before known to the human race, but that's beside the point.
Nowdays, you'd plant the crops with efficient machines and eat what you need, sell off the rest. Many companies will simply hire you to do the work and pay you what you need. However, they've been using the idea of free market trade to push wages lower and lower and lower so as to make people homeless, hungry, uneducated, and very very VERY pissed off. 2 parents shouldn't have to work full time jobs to raise their kids and shouldn't be forced financially to send their kids to our shitty public school system but that's how it is.
Most farmers and their wives didn't work the fields 14 hours a day to make enough food. Sure, the work was hard and long but at the end of the day you got what you made and in the winter you got some offtime to do other things.
Free trade is simply an excuse large profit-driven corperations use to make the rest of us work for less to increase their profit margins because there's no other area left to cut up. Most companies have already cut benefits of any kind, as well as other perks to working there.
So, I'll tell you what. Go down to a shanty town and live there for a week or two, get to know the people and why they have the problems they do instead of telling people to stop whinging. That doesn't solve their problem of not having food or shelter and being very angry at all. Infact, if you did go down to a shanty town or a homeless person and told them that they'd probably beat you to a bloody pulp. Also, if you knew about the deregulation of buisness law over the past 200 years and the effect it's had on us, then you might understand that what's happening is wrong, it's a slow and steady push to making everyone slaves. Instead you choose to throw rocks instead of doing something harder, like educating yourself. Read Gangs of America, it's free in pdf if you do a google search for the website.
Candy-Coated Knowledge
We are the lucky few on the bright side of capitalisme.
Nothing is or was going to keep a lot of the jobs moving once WIPO and GATT existed.
IMHO Unions do serve a very useful role, but if you look at least at UK history that role has been best served not when there have been strikes but the rest of the time, when they've been able to work with employers on safety, and quality of life while at the same time helping to ensure a company runs well and everyone is happy.
... and it's driven by the declining value of the dollar overseas. Our currency is not going far when you try and spend it beyond our shores at the moment.
We declinded 19% against the Euro during 2003, sadly it is a trend that looks like it will continue for a little while longer.
Once the dollar recovers we will start to see jobs and services outsourced again.
The notion that India is somehow special is laughable.
Yes, that's why India is the destination of almost all outsourcing. Thanks for clearing that up.
Who was it Alvin Tofler in the book The Third Wave talk about America losing it's manufacturing industry to overseas compaines was no problem. That American is becoming a Services based economy. That worked, but now America is sending its Services based economy and there is nothing to replace it.
.COM boom is over and corporate America wants wages back to pre boom levels. So they start sending work outside the country, to force Americans to accept lower wages. Look at the recent announcement from IBM to send 4700 jobs overseas, and another 3700 potential jobs to go. BUT, if the American workers are willing to accept the same wages as the Indian workers they can keep their job.
There was never a shortage of American techies, they just wanted cheaper wages so the government created the H1B visa program. Now the
Same going on with the grocery worker strike, Unions on a power trip have pressured companies to raise wages and benefits to the breaking point. Non-union companies come in with lower prices and people are shopping in those stores to save the average 20% difference. Unions did the same thing in steel, automobiles, electronics, and other manufacturing sending American jobs out of the country. American worker became too expensive. Long term effect some old manufacturing town have died or dying.
Trouble is with corporate American focusing only on cutting costs and increasing margins, they aren't realizing they are cutting the available funds of their customers here in the U.S. People sending all their money to just survive aren't going to be buying much.
So after all the pain to the American worker we gain nothing. Wages drop, business slumps until they drop prices. Some people lose their homes or can't pay high rents, eventually housing prices drop. So a lot of people get hurt, some companies/industries lost forever, just to adjust everything down.
As for the Indian caste system, please don't talk about stuff about which you obviously don't have a clue. Did you even know what caste your operator belonged to? Did you know that caste and economic class are fairly orthogonal in Indian urban centers? While the definition of untouchables you mention is passable, you somehow neglected to mention that untouchables are people who belong to none of the four castes and are part of Indian society and cultural context. Non-Indians are not untouchables. Their caste is 'N/A'.
As a thought exercise, think of a social system where women were assigned different social strata based on the length of their monthly cycle, with untouchables being defined as post-menopausal women. Where would a man stand in that system? Note that the caste system and the Manusmrti are for all intents and purposes irrelevant among the urban English-speaking elite who staff call centers.
When the divisive issue du jour of the 60s and 70s was race in the U.S., it was language in India. Sure, there have been instances in India's history when Tamils in the south have felt threatened by the contiguous block of Hindi-speaking territories. You are definitely overgeneralizing when you take one anecdote and conveniently plaster the label of arrogance on ALL Indians.
It's much more likely that your support representative was arrogant because these jobs go to the top-notch -- people who are used to being at the top of their classes all the time. Not unexpectedly, just like in the case of U.S. geeks, some arrogance creeps in. I'm sorry to hear that your 'interesting social interaction' didn't go too well, but please quit calling all Indians arrogant just because you had a clueless and arrogant rep on the other end. Clearly, India doesn't have a monopoly on the clueless and arrogant.
He was standing in line to buy train tickets. When he got to the head of the line, he asked for two tickets to Tokyo, in Japanese. The woman behind the window replied, in broken English, "No speak English." He answered, still in Japanese, "I'm not speaking English, I'm speaking Japanese, two tickets to Tokyo, please." Again, "No speak English," and the woman left the window. My acquaintance was rather embarrased by all this, since it is considered quite rude to hold up the line. After a bit, an elderly man came to the window and asked, in English, if he could help. My acquaintance, still in Japanese, asked for the two tickets. The old man responded, in English, "Oh, you speak very good Japanese," but would not conduct the transaction in Japanese.
My acquaintance said that he encounters this situation, where people refuse to acknowledge that an obvious foreigner can speak the language, regularly in Japan.
1) Hire/fire. When the work was over, I didn't need the teams any more. With the Indian vendor, I could cut back without worry.
Well, as long as you didn't feel bad, I guess that's all that matters. I mean, it's impossible to feel guilty about displacing local tech workers if you simply don't hire any in the first place, right?
wrong about one thing. the average education level of workers in indian call centers is way above that of their american peers.
Well, apparently they weren't educated in customer service. The HP/Compaq offshored help is all but useless even after you stay on hold for 30 minutes. I'll never buy another HP product - I hope you're listening Carly, but I doubt it; you're too busy looting the company.
we are learning in college that the newer Organizational Management can change things. It promotes diversity in the workplace. It works people into teams. It empowers employees. It shares the wealth.
Racism is counter-productive to an organization, and often results in lawsuits. So is discrmination based on age, gender, religion, disability, etc. The organization is effectly shutting out people that could help it grow and earn more money. Sometimes people with different viewpoints can help out greatly.
Remember, Slashdot does not have a -1 disagree moderation, and no, troll, flamebait, and overrated are not substitutes.
The changing face is simple: over the next few years, India will develop its own, stand-alone software industry. US firms won't be outsourcing to India, they will be competing with Indian companies.
Furthermore, multinationals will not be "outsourcing" to India anymore, meaning sending sporadic, low-level programming tasks there, they will be expanding their subsidiaries there and doing R&D in India, just like they are doing R&D in the US and Europe.
Will this mean downward pressure on the salaries of US programmers? You bet. But it's only fair: companies like IBM make more than half their revenue outside the US, therefore it stands to reason that they should employ more than half their employees outside the US. Right now, the percentage is still much lower.
The most racist place I've ever seen has been Israel. This type of thing is more common than you would believe, as it is okay to discriminate against non-Israelis.
In Australia, the US, or the UK, this sort of behaviour would get you sued to hell and back.
The Japanese have a very strange concept of politeness. The culture is completely dominated by it. Politeness even complicates the grammar of the language. It's a tool for scrupulously observing the details of social convention, and everyone is expected to play by the many rules. Foreigners in Japan are quickly immobilized by a net of condescending smiles and polite retorts that permit no escape.
I'm not Japanese, so what do I know? Here's my guess. Your friend was probably breaking a rule when he tried to speak Japanese to the people at the train station. He is a guest to the country and they are workers at a train station, which makes them servants. They are definitely at a lower point than he is in whatever social hierarchy determines these things, and so they were clearly expected to speak his native language, in deference. By placing them in a situation where he is speaking a non-native language for their benefit, he is forcing them to be impolite. They were trying to make everything polite and OK again by insisting on English. In fact he committed a grave social error when he forced the old man to admit they did understand his Japanese.
Just a few weeks ago at work a tantrum arrived via fax from a software distributor in Taiwan who had been recently fired by our sales employee in Japan for breach of contract of some sort. It was a copy of an email that the distributor had sent in response, and the guy was so livid he faxed a copy to us in California in an attempt to go over his head. In the first paragraph it says "You, being Japanese, should not have allowed this to happen." I thought that was a very strange remark.
"I am rich and I am proud of every penny I own. I have made my money by my own effort, in free exchange and through the voluntary consent of every man I dealt with--the voluntary consent of those who employed me when I started, the voluntary consent of those who work for me now, the voluntary consent of those who buy my product."
Ayn Rand made money as a result of the set of involuntary restrictions called copyright...
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There is inferior bacteria on the interior of your posterior.