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Long Term Effects of Outsourcing
simulate writes "There have been several postings about outsourcing and offshoring in the past
few weeks. Is outsourcing just a fad? In Outsourcing
Programmers is Bad Strategy for Software Companies
author Michael Bean compares offshoring to the enthusiasm for Internet startups
in the Nineties.
He claims
that
outsourcing programmers is bad for companies not because
of the programmer layoffs, but because technology companies lose their
capacity
to innovate.
Offshoring is a mistake
when technology companies confuse operational
effectiveness and strategy." I don't think the comparasion to Dot Bombs is entirely accurate - the trend to globalization overall has been going on for decades. Still interesting piece.
Business Week had a good article on this a while back. Problem solved. The water will seek its own level.
Life is the leading cause of death in America.
Nope.
We're saying that outsourcing stiffles inovation because it separates design from the rest of the company. This could be just as true for US companies outsourcing to India as Indian companies outsourcing to the US.
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From what I've heard, they only did this for their corporate lines... OptiPlex & Latitude. If you call in for support concerning the Dimension or Inspiron lines you will still have a great deal of fun trying to communicate effectively. Of course, corporate purchases account for 85% of their sales from what I read...
Having just come from a company that was rabildly outsourcing, we saw a different backlash of the outsourcing problem. The execs were outsourcing everything they possibly could, even when it made no sense. However, the company was still not going to be positively improved financially by this happening. What everyone remaining on staff could see is that it would boost short-term profits just long enough for the execs to rape the company with fat bonuses just before bailing out. That's apparently another popular trend.
Be excellent to each other. And... PARTY ON, DUDES!
The percentage of development work that is truly innovative is relatively small, but the article is correct. Out sourcing the "innovative" parts of a company is very dangerous and will lead to more problems. From first hand experience, innovation comes from interaction between the developers. Very few individuals can cook up innovation in box all by him/herself. Can innovation happen in an outsourced model? Sure it's possible, but it's going to be considerably harder. This is why companies like Oracle, MS, Intel and others are expanding their divisions in India and china. They maintain tight control because it's not out sourced to another company. Companies can offshore their R&D, they just have to open a division in a foriegn country. For better or worse, that's reality.
Ok I'm tired so I'll try to explain a bit. The majority of posts I've been seeing on the Sunmanagers mailing lists are often questions as dub as "How do I reebot my e450 thank you Jawalahar!", and that's scary. If I'm saving say $400 for outsourcing but paying $200 in downtime because an admin is a moron, $100 in downtime waiting for the idiot admin to get a reply from a mailing list, where is the savings? $100 you say? What happens if I lose customers while my business is down?
eg:
Again, apologies if it seems I' nitpicking but I'm not, I just notice the majority of questions that are for one: easily resolveable to an experienced admin, easily resolveable via googling, are posted by people in countries that American chooses to use for outsourcing.MoFscker
Follow this train of logic: If more and more software jobs move overseas, then there will be less drive to join an industry where you are paid a mediocre wage for complex work. Thus there will be fewer students enrolling university programs in the industry, and thus universities will cut back on software departments. Ultimately the very infrastructure of the nation's software industry will be severly reduced. No follow similar logic in the country that was offshored too, and the reverse happens.
When talking to a senior J2EE developer at EDS, I was shocked to learn that he hadn't even heard of JBOSS (that was about a year ago). In addition, their UNIX SysAdmins don't always know UNIX very well (they don't understand what Zombies are, and don't understand how deleted files that are still open can be contributing to disk space filling up).
Yes, EDS should be avoided. It's like they almost try to not be customer-friendly. They require even the most minor changes go through a 30-day change review process. I understand the need for a change review process, but theirs is particularly nasty, and doesn't do a lot of good (noone actually reviews the changes like they should).
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The Europeans used to think Americans were all dirty farmers. This myopic thinking was as harmful to them as this thinking is to us. If there is a motivation to innovate, Indians and Chinese will step up to the plate just as North Americans would. You are not special.
You don't have to leave the country.
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Our median house value is $67,000.
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Joe Batt
Joe Batt Solid Design
Outsourcing has worked very well for us in the past and we continue to do it, but there are two major headaches we encounter on a regular basis.
1: Turnaround time. Bug fixes or changes that need to be addressed NOW, have to wait because of the time differences. Sometimes 8+ hours will pass before the programmer even hears about it. Then you add in the time to do the actual work.
So I would recommend in-house staff for projects/issues which need extremely fast response time.
2: Inexperienced programmers. While all of the countries we have used for outsourcing have many talented and experienced programmers, we have always had to sort through a lot of garbage to find quality staff.
The reason for this is the same reason we had to sort through the same sort of garbage in the US during the tech boom. The high demand for (relativly) high paying jobs produces a ton of people who are brand new and just got into the field to cash in.
So... if you decide to outsource you need patience.
If you can't wait a reasonable amount of time for a response on a project (At least a day)... keep it in house.
And, if you're not willing to spend the time and effort needed to sort through the applicants and find the talent, keep the work at home (Of course you'll have to do the same thing in the US... we have just as many inept and inexperienced applicants as anyone)