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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 ;)"
From the article: Some US customers have complained that the Indian technical-support representatives are difficult to communicate with because of thick accents and scripted responses.
Tech support for corporate customers with Optiplex desktop and Latitude notebook computers will instead be handled from call centers in Texas, Idaho and Tennessee, Dell spokesman Jon Weisblatt said Monday.
Let me get this straight. People cannot understand Indian accents, but they can understand Texan and Tennesseean accents? Obviously they've never been to either state ;-)
24 beers in a case, 24 hours in a day. Coincidence? I think not!
Dell didn't move all there support back, they only moved the support back for there business clients.
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 :)
maybe 'buy american' could be our new battle cry ;)
Wasn't that Walmart's battle cry for years... until it became convenient for them to forget it in favor of another battle cry that generated yet more money?
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(^.^)
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*beware the cute-bunny virus
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.
Be excellent to each other. And... PARTY ON, DUDES!
"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,
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!
I would disagree. The bigger companies do think about such costs. Thats why you get a 25-50% saving when the salary difference is way higher. Similarly they are careful what and how they use very cheap but possibly lower quality resources. So for example who you get for a long distance phone billing problem depends on how much you spend a month.
Places like India are getting more expensive because they are getting way better at doing the jobs well. The experience and infrastructure is now there. Much of the really low grade work now goes elsewhere.
It is all buzz word compliant. I bet if you had set up shop in some low cost city in the US and claimed you had outsourcing capability you would have had plenty of contracts lined up. Heck, call your company Outsource Synergies. Of course you don't have to let them know that what is outsourced is your ATT billing and only because ATT did so. You can hire local programmers, admins at a decent wage and still make a profit. It is all about the buzz word. In certain cases the buzz word does become the reality without necessarily having to be.
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!
Indians, Pakistanis or Chinese. Really.
I'm an Indian, and let me tell you, the culture is racist to the core. Hell, even within the race there's the caste system, and don't for a minute believe anybody who tells you that it's dead.
Most cultures are ferociously racists: the only exceptions are places where there are too few people of other races to even notice (some parts of England, say, are pretty chilll) or America, where the fight against racism is a big historical driver.
This is one thing which I think Americans have got right and can teach the world: how to deinstitutionalize and stigmatize racism to the point where basic values change for many, if not most, people.
Seriously: I think that America has an incredibly tolerant and non-racist culture over all. Festering throwbacks excepted.
Hexayurt - open source refugee shelter,
I know you are a troll, and I shouldn't feed you but hey, It's 2004....
The smart companies never moved their programming and tech staff from in house, as they knew that the only way to get the best quality was to keep it at home.
We had a few phb's try and convince the CTO and the CFO that moving the entire development staff to an outsourcing firm... they almost suceeded until the old man (read that as the dude that built this company..) that hold's 51% of the stock said, "no way in hell. there is no security, no quality control, and no way for us to completely control the process." he went on about how only fools would trust another company with their secrets and their future.
The old man did this on one of the telecasts in front of the whole company intentionally making the Executive staff and the phb's look foolish for chasing small dollar returns for giving up the stable.
A company with strong leadership that actually looks toward the future sucess does not chase the easy dollar.
I'm not whining, I'm proud to have a leader in the company that isn't as incompetent as the management that thinks like you do.
Do not look at laser with remaining good eye.
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 moved four projects to India with reasonable success. We did not use a lowest-cost provider; instead, we used a company that charges more than Wipro or Infosys, but fields better talent than they do (in fact, they cherry-pick from Wipro and Infosys for new recruits).
Here are my conclusions:
1) We were able to ramp up faster than if we had tried to hire locally.
2) We were able to overcome personnel issues more quickly -- the vendor was able to add higher-powered programmers very quickly when they got into trouble, and "swarm" the problem with bodies. In our case (simple Web apps) it worked, although there are situations in which it obviously would not have worked (mythical man-month, blah blah blah).
3) The quality of the finished product was reasonable. Call it B/B-. Which was OK for us, maybe not good enough for some, but acceptable.
It turns out that if I had hired a much smaller number of local programmers as permanent employees (consultant rates would not have worked) -- very good ones at market prices -- and they had performed up to expectations -- I could probably have brought the same projects in on the same schedule for the same price. I probably would have ended up with a better architecture, and better code.
So maybe it's a wash. Except, I would have had the following problems:
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. With permanent hires, I'd have a serious morale problem.
2) Risk. If my gunslingers ran into a problem, I wouldn't have been able to "throw bodies" at it. My budget wouldn't have allowed for that.
3) Maintenance risk. The Indian teams can be scaled way back, but I could still keep 3 people on the project for continuity. If I scaled back my own teams similarly, I'd only be able to save one job, and if that person quit, I'd be hosed.
So there are a lot of subtle factors that play here. The Business Week guy alludes to them, but doesn't really itemize them well.
I'm not a capitalist, but at the moment capitalisme is the most succesfull. It would be nice if we would be working to better ourselves and rest of humanity, but so far no one has figured out how to make that work in the real world. Even communisme has a leathal flaw in it nobody so far was able to remove (They had to build a wall around their country to keep their inhabitants inside, think that says enough)
I guess there's still a lot of work ahead.
Try getting a job in India.
Seriously, they don't make it easy for foreigners.
Hexayurt - open source refugee shelter,
I visited an independent car manufacturing plant in Fremont CA a few months ago. Interestingly they were building Toyotas and Hondas, all right hand drive, for export to Japan. Remember the days when car manufacturing was moving to Japan? Seems that our automobile industry learned how to adapt and is now reversing the trend. Perhaps software engineering will follow suit. It *never* ceases to amaze me how primitive Fortune 5000 IT development shops are. Oh yes, there are plenty of groups, teams, even divisions doing great work with new processes and technologies -- but on the corporate level few can answer basis questions such as "how many developers do you have?" "where are they located?" "On what are they working?". There is little standardization of processes, metrics are a pipedream and reuse is seemingly unachievable. Evolve or die!
Rich people are eccentric. Poor people are strange. Me, I'd be happy with odd.
Places like India are getting more expensive because they are getting way better at doing the jobs well.
They've been very good at what they're doing for several years now. Instead they're getting more expensive because they've gone from being a "secret" for a couple of companies to leverage the first-world education (for some) with third-world wages, to being a well known fact that every organization and their brother is racing to join the trend. Obviously there are a finite amount of highly trained, intelligent software engineers in India, so there is now competition for their services. Hence you have salary inflation. I've heard that the ascent of salaries has been absolutely dramatic. Capitalism at work.
Much of the really low grade work now goes elsewhere.
Some time ago there was an idiotic outer-worldly statement by one of the execs of one of the big outsourcers that if Indian developers got too expensive, they'd just switch to Vietnam, etc. This is so ridiculously imaginary that it boggles the mind. India, as you know, is a hot spot because of three things:
-They have a fabulous education system for some
-They are a reasonably stable, generally low corruption country
-Because of being a British controlled area, they have a large number of English speakers
Without all three of these factors, it's a no-go except in exceptional circumstances. It's for this reason that even in the high-education countries of Russia and China they are only a drop in the bucket compared to India. The idea of other areas like Vietnam is just absurd.
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.
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.
A few sites:
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,
I may be dating myself but it been a "long" time...
Wow. Condolenses. Reminds us there are things worse than outsourcing. You should really check out those OSDN personals.
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
China is communist in name only. They're a capitalist dictatorship.
The notion that India is somehow special is laughable. Similarly India is already outsourcing work to other cheaper countries. Not just companies picking cheaper alternatives to India for outsourcing (and for plenty of products language is not a barrier) but Indian companies themselves taking on entire IT projects internal to India or external to it and then outsourcing bits of the work.
There are a lot of countries with good education systems, relatively little corruption and the infrastructure to support IT businesses. most even have well developed health care systems too - most of eastern europe for example fits the bill very nicely, as do countries like Brazil.
India also has problems some of the other countries don't - very high loss of hours to industrial disputes, extremely inflexible labour laws in some situations and the ever simmering border disputes with Pakistan.
The Indian governments own models are in part based on assumptions about call centres being a temporary not a long term phase of Indian business that will either move on or be automated out of existance by speech techology.
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.
We are the lucky few on the bright side of capitalisme.
Ok, I see what you're saying. And it all makes sense to me.
The part of the premise I don't buy is that a global middle class is possible. Seriously.
If we budget purely in money then, yes, it could potentially happen. But the problem is that that planet won't sustain that much more growth: the middle class is supported by enormous resource consumption, and cheap labor elsewhere.
I don't know of any solution to this problem within our current resource constraints: if everybody is moderately well off, the planet it toast. If only the very rich have access to resources, the poor are toast...
Phrased in those terms, it's impossible to see a way out. And I don't know where to go from there.
India and China can't afford to raise environmental and social standards to western levels until after going through an economic transformation, and the only way the could fuel or spark such a move is trade with the west. If we won't trade with them until they are where we are, they'll never get there at all.
But I don't know what to do about that. Right now, it's working in as much as it's building an infrastructure in the third world and while it's hurt Americans, it's not hurt them to the point of starvation. But is it a long term solution? I just don't know.
I see your doubts clearly.
Hexayurt - open source refugee shelter,
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.
I don't understand this. The most racist parts of Britain are the places where there are very low and very high proportions of people from ethnic minorities.
America is a comparitively racist and generally conservative culture, hence the need for institutionalised safeguards against racism and paranoia regarding it. It's not anywhere near as bad as Australia or Austria, and few places are as bad as India. An Indian friend of mine's father described Pakistanis as "sub-human". He's considered a bit left-wing by his friends.
It isn't just accent. It is huge, huge, huge cultural differences. Sometimes you would be able to understand their words more easily if it weren't so difficult to believe what they are saying.
About two weeks ago I was helped by a Microsoft tech support person in New Delhi, or maybe Bangalore, I forget which. Some otherwise correctly running Windows XP computers had trashed themselves so that it was impossible to run the Recovery Console. The MS tech support guy had absolutely no clue about how to fix the problem, although he did have plenty of time-wasting ideas. This is not unusual, of course. The Psychic Friends Network is sometimes equally as good as Microsoft technical support at understanding bugs in Microsoft software.
What made this technical support call different is that the Indian Microsoft technical support guy was the most arrogant person with whom I've ever talked. He made Larry Ellison look humble. He was cheerful enough, but entirely useless doing technical support because of believing that I am an inferior who should believe any lie he tells me.
After a while, for me it stopped being a support call and began to be an interesting social interaction. In Hindu culture, if you don't belong to one of the castes, you are an untouchable, a person below any of the castes. Obviously, I don't belong to any of the castes, so you know where that left me. To him, I was of the social class that cleans up after bodies that have been burned on a funeral fire, or empties latrines, or eats dogs.
Many, many Hindus are little influenced by the caste system, but this guy seems to embrace it completely. Whenever I would tell him that it was obvious that what he was saying was untrue, he would tell me another lie. No amount of mentioning that what he was saying was obviously incorrect stopped him. To him, anything that popped into his mind should be gold to someone like me. I would say, "You invented that; there's no reason to think that whatsoever", and he would just cheerfully continue with another invention.
If you aren't familiar with the arrogance and disconnection of the Hindu caste system, here is a quote: "By his very birth a Brahmin is a deity even for the gods and the only authority for people in this world, for the Veda is the foundation in this matter." -- Manusmrti 11:85.
For another example of Indian arrogance, see this story by an Indian : Hindian Arrogance on a Tourist Bus.
We hear a little about the problems of outsourcing technical support, but things are a lot worse than most stories say.
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.
Hexayurt - open source refugee shelter,
... 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.
The middle class: "people who have something to lose," effectively, might survive.
But what if they survive largely through shifting the basis of their wealth from unsustainable to sustainable resources?
Things we can assume about the future: basic resources like food are likey to be more expensive. Oil is likey to be more expensive. Energy is likely to be more expensive.
But other kinds of comoddities could get cheaper: computers, communication, entertainment etc. are all falling in relative cost of production, for example.
So I can imagine a future - a working, reasonable, healthy future - where transport and production costs encourage bioregionalism in agriculture, but there's a vibrant global culture based on cheap communication. You still have a middle class, but they measure their wealth in terms of music and movies and books and travel rather than in terms of fifty different pairs of shoes and four cars.
It could happen, perhaps.
Hexayurt - open source refugee shelter,
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.
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.
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?"
DUCT TAPE: The Election Supervisors' Secret Weapon
So why don't you hear a lot of people complaining that their airline or credit card company customer reps can't talk good American? Because there are plenty of well-educated Indians who speak fluent western English. All they need is a little practice on their idioms and pronunciation, and you can't tell them from a native of Duluth. Not over the phone anyway.
So it's perfectly possible to run an operation out of Bangalore or Dehli without communication problems. And yet you hear all these horror stories. I have a few myself: I subscribe to techwr-l, and we often get lame questions from Indian writers, usually basic grammatical stuff even a American 4th grader or a Slashdot editor would know.
My inference is that the companies driving the offshoring trend aren't satisified with the pay differential between San Jose and Bangalore. So they don't hire people with degrees from India's universities or engineering schools. (Which produce a lot of good people -- I've worked with some of them.) They hire folks whose educational achievements culminated in one of those "learn programming in 2 weeks" schools. Their English is hard to follow, not because of their accents, but because its one of the highly-localized English dialects that Indians use amongst themselves.
Here's another horror story. If you're a tech writer in the San Francisco Bay area, you've noticed a lot of headhunters trying to fill a very strange job in San Ramon. What's in San Ramon? A bunch of engineering outfits that decided that rents in Silicon Valley were too high -- never mind a limited local talent pool, if people want to keep their jobs, they'll commute or move. One of these outfits is the development arm of what used to be Pacific Bell, now a nameless subsidiary of SBC.
You need massive databases to run an RBOC, and this one has fallen way behind on database development. People complain of billing errors and outdated listings. There's a hair salon in San Rafael that can't get SBC to put its Yellow Pages listing in the proper category -- for two years running it's been listed under "Massage". Which sounds funny, until you consider the kind of lowlifes who respond to a massage ad for "Curl Up With Kelly".
So these guys in San Ramon are scrambling to update the software. They need a tech writer who can document their work. Said writer needs to be able to read source code in half a dozen languages, including the venerable Revelation Basic. Oh yes, and the writer has to work for $25/hour.
Well, I have the skills and I need the work. But that's hardly a reasonable wage, especially considering the two-hour commute. (It's a short term contract, so relocation is not practical.) I'd be better off working at the Starbucks down the street.
When I pointed out the absurdity of offering entry-level pay for a job requiring advanced skills, I was told that all the costs were measured against the alternative of moving the whole operation to India. Which is total nonsense. I'm sure there are plenty of Indian operations that could engineer a fancy database from scratch, and do a good job very cheaply. But SBC doesn't even want to spend that much money. They want to continue hacking 20-year-old code running on legacy platforms. Do they think that India is swarming with experts on the PICK database system?
The whole offshoring thing is just the latest development in a nasty long-term trend. Even before the dotcom bubble burst, Wall Street was dominated more and more by numbers dweebs, people who have no understanding of the industries and businesses they're investing in, and have an idiotic obssession with the bottom line. They hate costs more than anything. Even if you're turning a
Living standards with Maquiladora labor pools is NOT going up. China even refuses to let it's currency float.
This is all a conspiracy for the elite across the world to create a new class of serfs. To barter labor down to 1930s level conditions. Were not helping poor people in poor countries. We are further enriching in rich people in both poor AND rich countries. We are destroying the middle class amongst the G8 nations.
The new corporate feudalism is coming if we don't get rid of WTO and NAFTA.
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No the solution isn't to diffuse the power of the middle class. The solution is for China and India to create one.
I hate to tell you this, but it must be done with rifles. American's have consistently fought and died for the right of the middle class. Chinese and Indians need to fight this battle against their masters. Giving away our prosperity will only make us like China and India.
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I don't deny the caste consciousness still strongly present in many Indians, but I don't think it's relevant here. We Westerners are exempt from the system. I've worked in India and with Indians in the West, and among the many perplexing cultural differences I've run into, the inclusion of *me* in their caste system was never one of them.
I think that what you encountered was just an individual personality. I've had these experiences with Indians, too (especially bureaucrats who wanted to prove their importance), but I've had similar experiences with people everywhere. I've managed a tech support group in the US and some of my own people acted this way (until I either stopped it or got rid of them.) It wasn't correlated to their skill level either, just to the degree to which they seemed to feel the need to prove to others that they were smarter (which seems to afflict geniuses and idiots in roughly equal proportions.)
"Those who have never entered upon scientific pursuits know not a tithe of the poetry by which they are surrounded."
In part, the offshoring (and all outsourcing) trend is driven by the fact that it is difficult in the US, and other developed countries, to decrease nominal wages. A firm may have to cut the price of its goods by 10% in order to compete. But if the firm's workers have not become more productive, so that the value of their labor has decreased by 10%, it is quite difficult IN PRACTICE to cut their wages. In general, the only way to do so is to lay off the existing workers and hire new ones at a lower wage rate. Doing this effectively, at least in the US, tends to put the firm in violation of age discrimination laws, as the highest-paid workers are generally the oldest ones. Outsourcing an entire department avoids that particular problem. And as long as you're outsourcing, you might as well look for the cheapest alternate source that you think can do the job.
Several of the comments above have been from consultants who say that the rate that they can successfully charge for their services has decreased sharply. What the firm pays a consultant is determined for each project; changes in the supply of and demand for consultants comes into play each time, as does the firm's view of the value of the project. The same is not usually true for an employee. Last year we had a hot project in a new, highly profitable area; this year we're doing maintenance on older, less profitable products; but the firm will have difficulty changing the wage rate every time they move someone to a different project.
One area where this plays out in a particularly frustrating fashion is with teachers. My kids' high-school teachers are no more productive than my own teachers were 30 years ago. The classes are just about the same size and the material they teach is roughly the same. Pundits point at standardized test scores and assert that the quality of the product has declined in the last 30 years. That's true in another sense as well -- I am almost sure that the average real wages earned by people whose education stops at high school (real wages being a measure of the value of their contribution to the economy) have decreased over that period. Simple economics would suggest that real wages for teachers should have declined (which may, or may not, have occurred). Given that the value of many of the benefits that teachers receive as employees (health care, pensions) have increased sharply over time, the real salary rate should have gone down a LOT.
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.
Those fund and investment pools carry enough votes to run the company, but they don't.
THEY CAN'T. Because investor groups AREN'T allowed to nominate board members. THE CEO nominates the board members. The shareholders can vote them up or down.
The foxes are indeed guarding the henhouse.
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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.
"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.
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There is inferior bacteria on the interior of your posterior.
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 work at an overseas CMM Level 5 IT company in Korea that started offshoring recently and have been working with a team of guys that we brought from India. Though I just started with the company as a software developer, I almost immediately became a member of their team and a full-time interpreter -- though I was much closer to being a manager as many people at the company prefer not to deal with them.
I can't say much positive about their attitudes and work either, though I don't want to stereotype all ethnic Indians. Whenever I visit their cubicles, they are browsing the web or chatting with their buddies rather than completing their assigned work. I wasn't receiving any respect from certain members of the team, mainly because I had fewer years of experience in software development. However, it certainly did not appear that they had the four years of experience in Java cited on their resumes. I was reviewing their code and fixing major logic errors in code and the grammar mistakes and typos made in the comments. This was work they could have easily done themselves in the very lax 3 week deadline they had to fix their 3-5 test cases. Instead, I spent two weeks fixing their code and writing the documentation that they had "written". I asked one guy to fix a mistake in two of his test cases, pointing out the error and explaining how he could fix it, and he got really angry at me and sent me e-mails about me being the newbie. Since I was not the manager he refused to change his code.
My co-worker has been also working in India for a few months and he does not appreciate the attitudes of certain programmers either. Some of them decided to change some of the code our company had written causing several bugs to appear in the build. None of the developers would take blame for it, though it was probably obvious who had changed it from the PVCS logs.
These experiences have led me to decide to transfer departments and work with people that have experience that actually counts, even if they are not involved in software development (which I hoped to pursue by finding an overseas job and obtaining experience with the company).
There are two questions companies should consider when making the decision to offshore (outsource) to India which directly relate to cost efficiency:
1) Do we fully understand their culture and will conflicts in culture present a problem? In other words, how much additional money and resources will be spent on interpreting and managing their work, making sure that they maintain a certain level of quality?
2) Are we just outsourcing to become trend-followers, blindly following the reocmmendations of McKinsey, Gartner, and Accenture to find cheap labor in India and China? Do we know exactly how much domestic labor will cost in current times (older BW article)?
It's my opinion on getting them to be efficient workers is that you need an Indian motivator/manager who understands their culture very well, is older than them and has a more impressive resume. Then, have someone from your company who is very knowledgeable about business processes and the related field, in this case software development, communicate the requirements to the Indian manager.
My manager has been assessing the quality of their work to present to our CTO whose initiative was to increase our offshoring in India. Does anyone have a good way to measure the the value of a software developer which includes factors such as cultural differences and communication problems?
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.
They are really in trouble if the nations top-notch talent is doing tech support. This does not bode well for the staff doing their high-risk programming (guided missiles, space operations, etc.)
So most likely they are among the better educated and think they are better than they actually are, much like some number of support specialists I've run into in the US, from Sprint PCS Vision specialists (over 100 hours logged to solve one problem, solved by one smart tech on the last call in under 10 minutes by resetting the password on my PCS mail account machine access, which was somehow out of step with my normal web access, wonders of seperate databases) to the good folks at Microsoft tech support where the few I knew worked at one of the MS contractors for support and while knowledgeable had holes in that knowledge that were vast.
The short of it is I think the support job gathers that style of personality for some fraction of its staff. Folks who think they should be working at5 a more advanced position, but lack the skills.
- Tjp
I am in wallow with my inner money grubbing capitalistic pig. ... Oink!
"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.
I speak Thai pretty well. Sometimes people on the phone won't realize that I am a foreigner. When I go to order food from a vendor on the street, though, as often as not he will not listen to me and look at my Thai partner for a translation. If I am alone I often get something not at all related to what I ordered. People pre-judge others. It's just a fact.
Put identity in the browser.
There are Indians who do treat foreigners as untouchables. I experienced the Brahmin arrogance while in India, and it was easy to recognize again in the technical support person.
The major point of my comment is that those who employ Indians are experiencing a much larger problem with cultural differences than they generally realize. Microsoft seems to have no mechanism for recognizing these kinds of problems, so no one in authority will learn of them, and they will continue.
For more elaboration about this problem, see this comment from an Indian: #7856623.
The underlying problem is that the documentation of Windows XP is VERY poor. If it had been better, I would not have needed to talk to a technical support person. The technical support people learn from the documentation; in this case various pieces of information in the documentation were subtly misleading, in error, and absent.
Software companies generally use customer problems as a profit center. There is an element in the companies that view customer problems as good for the company.