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A Thoughtful Look at Indian Outsourcing

Posted by michael on from the even-shell-scripts-fear-for-their-jobs dept.

thefinite writes "This article needs to be read by anyone interested in the outsourcing of IT jobs to India, no matter your opinion of it. It dispels some rumors (for example, if Indian IT companies do such bad work, why are over half of Carnegie Mellon's highest-rated programming companies Indian?). It addresses all of the arguments. Perhaps most importantly, it adds faces to the problem. It not only tells us about the American programmers who are out of jobs, but also about the Indians who are getting them. In the end of it, this is what Free Trade is about: people. This article makes that clear."

5 of 1,772 comments (clear)

  1. Interesting indeed by Frisky070802 · · Score: 5, Interesting
    This article was very thought-provoking. I know someone who left the USA to return to India and start an outsourcing company in the mid-90s, before it was fashionable. I never thought he'd be so successful, but it's clear this model has taken off. In the end, Americans who cry foul have to offer a reason for cost-conscious companies to employ them instead of offshore alternatives. This article demonstrates the opposite -- the effectiveness and quality of these cheaper alternatives.

    In the end, I do think it'll be a while before the "highest level" of IT (such as research labs) find comparable counterparts at that deep a discount. People who are worried about their job moving offshore should think about how they can do things that can't move as easily, perhaps by increasing their education (MS/PhD)...

    --
    Mencken had it right. So glad that's old news.
  2. Rather pointless article by khyron664 · · Score: 5, Interesting

    Outsourcing isn't the magic arrow CEOs want it to be. This article doesn't really address anything important at all. Ratings are pretty meaningless. I know parts of companies that are rated at SEI Level 5, but produce some of the worst crap I've seen. They're rated well though, so they much be good.

    Why doesn't someone write an article about all the times outsourcing has been tried before? How about what happened with Malaysia? How about the fact that the overhead involved in trying to manage people half-way around the world is higher than the amount they save by outsourcing? This isn't a new fad people. Sure, the people and the places change but the problems don't.

    Things are different now than they were in the 80's I'll grant you, but no one seems to be drawing the comparisons. Health Care costs are rising in the US, thus possibly providing better savings when outsourcing now. However, it's not like this is a new concept and that the problems aren't well known. Let's see some hard questions asked and analysis done based on past experience!

    Khyron
  3. The problems with outsourcing by SilentSage · · Score: 5, Interesting

    This article makes interesting advertising for outsourcing firms and raises some very valid points but hardly can be considered either objective or entirely factual. The article talks about the quality of Indian IT firms (and they do have some high quality professional firms). However, they fail to mention the many negative experiences U.S. firms have had with botched projects, poor service and support compounded by language issues despite claims that Indian English skills are adequate (albeit this is not true in every instance). One of the main issues offsetting these facts is that they work for a tenth of what their US counterparts do. Companies find it cost effective to allow them to make these mistakes and learn from them (which they seem to be doing). Outsourcing is a minefield that can lead to extraordinary success or disastrous failure. From an economic perspective the cost savings you reap from outsourcing you pay for in the long term (as a nation) by the erosion of your markets buying power. 3 Million consumers in your home market (making $70,000 dollars a year) are replaced by consumers in a market hostile to foreign competition making $8000 dollars a year (for the top tier anyway). Sooner or later America will realize this and legislation will be put into place to stop it. But in the meantime hang onto your seats

  4. Just more hype by jafac · · Score: 5, Interesting

    That's all this Indian Outsourcing thing is.

    Are there really really good, really smart Indian programmers? Of course there are! But overall, on the average, outsourcing will end up biting most companies in the ass, in the long run. There are hidden costs to it, like the 11 hour time difference, language barriers, cultural differences (anecdotally, from many accounts, Indians tend not to raise questions, or think independently when a design sucks, etc.)

    Worse yet, this will bite the US Software industry in the ass when we suffer from brain drain - when software engineering is no longer a sought after degree. Then the Indians will start their own companies, and eat our lunches.

    Worse still - with the decimation of these high-paying jobs, comes an overall lowering of the standard of living here in the US. These companies got rich by selling to the richest market in the world - American consumers. By gutting their own customers, these companies are shooting themselves in the foot.

    - - -
    That said - the writing, in big letters, in crayon, is:
    Investors should believe that a wise company outsources, because it's a move towards efficiency. It will eliminate those overpaid "web designers" that are sapping corporate profits. Companies are "cutting fat". It's perceived as a gutsy move.

    Actually, it's the herd mentality. "Oh my god! IBM's outsourcing, they're going to KILL us unless we outsource too."

    But mainly - it's a movement designed to lure investment dollars back to the Tech Industry. It's basically hype. Companies who outsource are selling stock. Not products and services. This is their motivation, their drive. And it's very much a herd mentality. Among investors, AND corporations. They may be heading off a cliff. They may be heading to the slaughterhouse. Or perhaps greener pastures. But make no mistake. The Outsourcing Movement is NOT a drive to offer better service, or find better talent, or even save real money. It's a drive to LOOK like they are.

    --

    These are my friends, See how they glisten. See this one shine, how he smiles in the light.
  5. My 2 cents or Rs 2... by xot · · Score: 5, Interesting

    I work for an Indian call center which does all sorts of processing and telemarketing for clients like Chase,Citi..ec.
    I work as a systems admin at night(USA time), studying for my GMAT in the day along with catching a little sleep.The job gets me about $7000 annually.Yes I am going to study in the USA probably steal another job there, temp or not if I can get it.Does that make me bad?Does that make the whole outsourcing industry bad?Its not the minimum wage factor that I'd like to argue.
    Everyday we get about 5 tasks that were done wrong by some desk jockey in the USA and have to be streamlined and corrected here.(not talking about the actually processing, just simple reports n stuff)
    Ok maybe not everything is that bad but what is a guy like me supposed to do? I earn more than most of my friends..live an ok lifestyle and struggle to save up for future education.This is the typical scenario you find in a IT outsourcing company in India.
    Should I just quit and work as something else? Why would Citi stop Outsourcing when they earn more by outsourcing and get better value for money? Isnt it right that we lobby for Outsourcing in USA?

    --
    Lord of the Binges.