Two Reviews of Yourdon's 'Outsource?'

Ben Rothke writes "Outsource: Competing in the Global Productivity Race is a persuasive overview of the outsourcing phenomenon. Author Edward Yourdon's premise is that outsourcing is not going to disappear anytime soon, and -- given the success that many companies have begun enjoying during the past few years -- it is not likely to level off anytime soon. Outsourcing is now a mainstream phenomenon and is affecting more and more workers, in nearly every knowledge-based sector. In a nutshell, this is Yourdon's book of how to prepare yourself for the inevitable." Read on for the rest of Rothke's review, as well as Jason Bennett's different take on the book. Outsouce? : Competing in the Global Productivity Race author Edward Yourdon pages 227 publisher Prentice Hall rating 10 reviewer Ben Rothke, Jason Bennett ISBN 0131475711 summary Excellent discussion about outsourcing and what you can do to save your job

Ben Rothke (continued)

For those Americans who would hope their representatives in Washington would get involved and pass laws to stem the flow of jobs overseas, there is little that Washington will likely do to help knowledge-based workers whose jobs are in danger of being offshored. While the loss of jobs is a crisis to many of us, Yourdon makes note of the oil crisis of the early 1970s and a speech that Jimmy Carter made in April 1977. Carter said "If we fail to act soon we will face an economic, social and political crisis that will threaten our free institutions." Nearly 30 years after Carter made that speech, oil is at an all-time high and nothing has been significantly done to reduce our dependency on oil; or to find a better solution.

If Congress is apathetic when it comes to an effective energy policy that affects an entire nation, it is clear that preserving the jobs of C and Java programmers is likely to be at the bottom of any congressman's to-do list. In 2005, national security, Medicare and Iraq are just a few of the issues that seem to be far more pressing to the nation than the loss of programmers.

The book is written about outsourcing in general, but has a heavy slant to programmers whose jobs have been outsourced to India. The prime advantage India has over other countries with cheap labor is a large base of workers that speak English. While the salaries in China, for example, are even lower than in India, the language barrier is significant.

The main claims of proponents of outsourcing are of increased productivity and major cost savings. Whether these claims are real is to a degree immaterial, as the perception among CIOs is that outsourcing has an immediate cost savings. This is primarily due to the fact that the salaries and benefit costs of overseas programmers are radically less than those of their U.S. counterparts.

From a productivity and efficiency perspective, many Indian firms are CMM level-5 certified, something that their U.S. counterparts can't attest to. At the end of the day, is better and cheaper code produced in Bangalore and Mumbai? Yourdon states that it is hard to find hard and fast answers. But with outsourcing the rage, there is the perception that Indian firms are more productive, formalized and efficient than their US counterparts is being accepted as fact. For many, perception is reality, and the reality is that jobs are being sent overseas by the thousands.

Outsource:Competing in the Global Productivity Race is written for (and beneficial to) anyone who feels that his job may be in danger of being outsourced. The book is well-written and pragmatic, and Yourdon notes that there are no simple answers to be found, nor are there any obvious choices. The book guides the reader who is working in a knowledge-based position to better determine where the trends in outsourcing are going and how to best save their job and simultaneously prepare for the inevitable. It is not that every knowledge-based job will be outsourced, but rather that the potential exists that every job could be outsourced. With that, it behooves everyone to get make sure they are prepared.

In 1992, Yourdon wrote Decline and Fall of the American Programmer. In the book, he predicted that U.S. programmers would "suffer the fate of the Dodo bird" as companies shifted jobs from American workers to those overseas to take advantage of lower pay, less labor regulations and higher productivity. Yourdon admits his prediction was partially incorrect. U.S. programmers have not gone the way of the Dodo bird and hiring is resuming; but in spite of everything, huge numbers of jobs are being sent overseas.

While Decline and Fall of the American Programmer was focused exclusively on technology workers, Yourdon writes that every knowledge-based job is vulnerable to being outsourced. From radiologists to tax preparers, telemarketers to architects, and more.

Perhaps the biggest benefit of Outsource is the composed manner in which Yourdon writes. Outsourcing is a controversial, political and extremely emotional topic, and Yourdon provides a balanced view of the outsourcing phenomena.

One of the solutions suggested to stemming the flow of jobs overseas is protectionist federal regulations. Yourdon believes that such measures are doomed to fail, in that you can't protect knowledge-based worked in the same way that steel and agriculture products can be protected. Yourdon admits that there might be some short-term benefits to a protectionist strategy, but will fail in the long-term. His view is that protectionism is simply blaming someone else for the existence of competition; and such an approach does not solve the problem. His solution, and the overall advice in the book, is to make each and every American knowledge worker more prepared to face competition from overseas.

Of the books 10 chapters, the most compelling is chapter 6, which provides seven strategies in which to deal with the threat of outsourcing. The first is to be proactive, with the last being to consider a career change. Yourdon does not promise and secrets or miracles in the chapter and attempts to provide some common, yet often overlooked, sense.

Outsource ends with the following quote: "I was taught very early that I would have to depend entirely upon myself; that my future lay in my own hands." This book shows you how.

Jason Bennett's take:

Information technology outsourcing has been a hot topic of discussion for many years now, but Ed Yourdon has, with varying degrees of success, been writing on the topic since 1992's Decline and Fall of the American Programmer. His initial prophecies were somewhat early and off the mark, however, prompting his 1996 sequel The Rise and Resurrection of the American Programmer. Now, eight years after his mea culpa, Yourdon has returned to the issue with what can best be described as The Decline and Fall of the American Worker.

Am I overstating his thesis a bit? Probably, but such exaggeration seems to be a Yourdon stock-in-trade (see his Byte Wars or especially his Time Bomb 2000! for some over-the-top predictions of doom). Overall, his thesis is fairly standard: the Third World (namely, Eastern Europe, India and China) has a lot of very educated people who, thanks to the Internet, can now do your job for your company from their country, and for a lot less money. This makes you expendable and them employable. Since there are a lot of them, unless you're really good, there's a decent chance your job is at risk. Yourdon expands his reach beyond the typical programmer or sysadmin to encompass all types of knowledge work, from reading (and diagnosing) x-rays to accountants and tax preparers. Eventually, he concludes, 10%-15% of current Western knowledge worker jobs may be lost to outsourcing, depending on various factors, including salary and productivity.

Yourdon's main solution to the problem can be summed up as "more productivity," by which he means business process changes as well as better measurability (CMM is mentioned several times in conjunction with Indian outsourcing firms). His point being, if you earn five times more than an Indian programmer, but are ten times more productive (and can prove it), then your job is safe. If your productivity is not up to snuff (or you can't measure it), you're more likely to be caught up in the rush. If you can't be more productive, (or not productive enough), he has various suggestions for making yourself less vulnerable to outsourcing. He also goes on at length about how companies can do offshoring, if need be, and what he sees as good national strategies to invest in education and job training to keep workers well-tuned to what the economy needs. In general, Yourdon sees offshoring as inevitable (and impossible to stop via protectionist means), but also as a challenge that can be met if we face it head-on.

Overall, while the book may be informative to someone who hasn't thought about the issue of offshoring much, or who has a fairly shallow understanding of the issue, I didn't feel that Yourdon addressed the problem in a particularly deep or thorough way. Offshoring, like any kind of trade, has broad implications for economies that are difficult to perceive. For example, will India's domestic demand for software increase as Western jobs are outsourced and its economy improves, and will that redirect programmers from offshoring positions? In his discussion on medical outsourcing (both of diagnostics, as well as actually traveling to other countries), Yourdon neglects to mention the legal implications of this trend. If an Indian doctor misreads your x-ray, how do you go about suing him? Finally, Yourdon does not address whether these productivity measurements are truly meaningful: A CMM level 5 shop can produce bad software just as well as a CMM level 0 shop; it just means that it can produce it badly in the same way each time.

In sum, this book is a good first read on the topic for someone who has not had extensive exposure to the issue, but for anyone who has been studying the problems for some time, the issues raised and solutions presented may seem elementary.

You can purchase Outsource: Competing in the Global Productivity Race from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.

Comments

Some projects, not others

[Anonymous Custard]

Outsourcing can work well for simple or self-contained projects.

The problem comes when you try to mix outsourcing with in-house development. It gets real hairy when you have to guess what was changed overnight.

Also, if there's a mistake or a weak implementation (band-aid), then it takes 3 days to go back in forth through emails explaining what's wrong with the implementation and how to fix it. Often when it's time to upgrade the band-aid, the outsourcing contract has already ended and it becomes your job to fix it. There's a sense of ownership that you lose with any form of consulting, regardless of whether it's from an international or a local consulting firm. I doubt any cost-benefit analysis made by non-programmers ever incorporate this kind of work.

While outsourcing may look good on the surface, and as TFA says CIO's perceive it as a cost savings, there are many other factors that have yet to be analyzed.

Yourdon has Zero Credibility

[Yonder Way]

Yourdon is one of those chiefly responsible for the Y2K pre-non-event panicking in the streets. Of course, he had some books out on the subject so it was in his financial interests to scare people.

Y2K came and went, Yourdon's predictions fell flat, and now he's trying to scare you out of your money to buy a book on something else that he doesn't really know about.

That he's getting any attention after Y2K is amazing to me.

Carter quote is an example of economic ignorance

[tjic]

Yourdon makes note of the oil crisis of the early 1970s and a speech that Jimmy Carter made in April 1977. Carter said "If we fail to act soon we will face an economic, social and political crisis that will threaten our free institutions."Nearly 30 years after Carter made that speech, oil is at an all-time high

Uhh, you're as economically ignorant as Carter was.

Once you control for inflation, you see that gasoline is far less expensive now than it was under Carter.

See graph here.

The main problem during the gas crisis was not lack of government action, but too much government action. Price controls kept prices artificially low, meaning that folks hoarded. Shipping regulations meant that trucks would drive to a destination and be unable to buy gas there for the return trip, etc.

A quarter of a century after Carter got booted out of office, we've got a minimal gasoline policy...and a good thing too!

Please don't try to apply the mistaken energy policies of the 1970's to technology today: you'll end up with lots of regulation, little creativity, and less adaptability.

The inevitable?

[Anonymous Coward]

Taxing service imports and canceling the H1-B program.

That's what's inevitable !!!

Re:How to avoid being outsourced v.1.0 final

[miu]

There is a serious problem with the removal of low level tech jobs, as they often serve as a training and filtering ground for higher expertise jobs within a company and industry.

Grunt coding or tech support may be tedious, but such jobs are a good place for someone just out of college and with no practical experience. A tedious and low responsibility job gives junior employees a chance to learn how things actually work as opposed to how they are supposed to work. Internships and temporary hires can handle this apprenticeship role to a certain degree, but I don't think it is sufficient.

Re:How to avoid being outsourced v.1.0 final

[Anonymous Coward]

That's bullshit. "growing in your own career" always means "become a manager".

Well, not everyone wants to be in management. Not everyone wants to be in sales. Not everyone wants to be in marketing. Believe it or not, SOME people actually enjoy working. Not organizing other people's work.

"grow in your own career" also typically means "sell out".

Re:How to avoid being outsourced v.1.0 final

[Mr. Slippery]

The obvious solution is: less taxes on companies and workers

Would you care to explain your reasoning behind that "obvious" solution?

Is the idea that with lower taxes - and therefore either massive public debt, or inadequate government services - our standard and cost of living will eventually fall to that of India, or what?

Personally...

[jd]

I see nothing wrong with "outsourcing" in the situation where you move the jobs to the skills. In other words, instead of trying to have some limited population be good at everything, find the things it excells at and then find other populations that excell at the other things you need.

(In the case of America, it makes no sense for each State to expend vast amounts of resources to compete against the other States, because that leaves far fewer resources for anyone to compete against outside interests.)

In the case of "outsourcing" as it is currently practiced, I see a LOT of problems. Far from moving jobs to people who can do them better, companies are moving jobs to people who can do them cheaper.

This is about as useful as building a car out of tissue paper. Sure, a given piece of tissue is going to be cheaper than the same amount of high-quality steel, so you've "saved money". But the results are crap. Even if you can solve the strength issue, it's still going to dissolve in the first rain shower.

People are often either "for" outsourcing (which is stupid, because it's being done wrong), or "against" it (which is also stupid, because it could be done right).

Instead of looking at "outsourcing" as a single thing, it should be looked at as a collective term for a whole bunch of different methodologies. Most of those methodologies should be hung, drawn and quartered, and their proponents forced to watch endless re-runs of Jerry Springer. Without the benefit of anaesthetic. The few - the very few - that would actually make sense and improve quality, without hurting anything, should be actively encouraged.

Re:Outsource this...

[Mr. Slippery]

maybe it has something to do with the way the government treats business. Let's tax and tax some more

No. Corporate taxes have been on the decline for a long time.

Corporate tax rates have nothing to do with the issue of outsourcing.

Re:How to avoid being outsourced v.1.0 final

[techno-vampire]

Grunt coding or tech support may be tedious...

But it doesn't have to be. I did telephone tech support for almost a decade before my call center was outsourced, and I'd love to be doing it again. If you like talking to people, like solving puzzles and like knowing at the end of the day that there are people who's days are better because they spoke to you, tech support is great. It all depends on your attitude toward your work.

Re:Outsource this...

[Anonymous Coward]

Companies claim that they need H1B and L1 visa workers because they can't find Americans who can do the job.

What they REALLY mean is they can't find Americans who'll do the job at the lowball price they want to pay.

So the solution to the problem is simple. We'll take companies at their word that qualified American workers are hard to find.

They say they can't find American workers. Fine, we'll tell them. Bring in as many foreign workers as you want. But not only will you have to pay the worker the prevailing wage, but you'll have to pay the U.S. government, annually, the same amount as the worker's salary.

So hiring an H1B or L1 worker will cost twice as much as hiring an American, but companies will be able to get all they need.

And hopefully the U.S. government will finally have some incentive to enforce the prevailing wage laws, which they don't now, because this will affect the revenue they get from the program.

Let companies put their money where their mouths are, and we'll have a win-win situation.

Companies will have the workers they need, and the U.S. government will have the revenue it needs to make the U.S. workers more competitive (not only training, but corporate tax breaks for hiring Americans).

Re:How to avoid being outsourced v.1.0 final

[Erik Hollensbe]

Economically, this stands to even things out, which is more in line with the socialist view and less in line with the capitalist view. Perhaps you should read the definitions of words before you use them?

As India and other countries start taking more jobs, and gaining ground in "mindshare" or respect or whatever you call it, and as their domain knowledge increases, they will raise rates to reflect their power in the marketplace. As India as a country grows economically, inflation will settle in compounding it further.

As soon as the cost-effectiveness of doing work overseas starts to fade, less work will be considered to go there - in reality, at that point it will be a battle of labor laws and how much control the outsourcing company has over the employees under those laws.

I think you can figure out the last part, which mostly revolves around the word "union". People who work hard to obtain the knowledge they have do not like to get stepped on.

Of course, any good socialist already knows that capitalists are just tools to help socialism grow anyways.

If you want a concrete example, try to make money on rentacoder.com - good luck with that.

Re:One way to face it head on

[TheGratefulNet]

'more competitive' because there's shit for health care and retirement and benefits over there.

its not an able-body vs. able-body. its a body with no expenses vs one with US style expenses.

its an unfair fight from the get-go. if I had control (clearly I don't) then I'd tax the hell out of any company who outsources to countries that don't meet minimum human rights and health standards. force them to compete on a fair footing. that's all people really want - a FAIR CHANCE to compete. not a gift given on a golden platter, but fairness.

its not fair now, which is why there's all this bellyaching.

This isn't happening in Europe

[Animats]

It's a public policy decision that this is allowed to happen. It's not happening in Europe, due to "protectionist" policies. We are paying the price of a government controlled by big business.

An hour's worth of work in France or Germany now buys more than an hour's worth of work in the US. The US is ahead on per capita income only because of longer working hours. And it's not ahead by much. US per capita income was 2x of that in France in 1980. Now it's about 1.2x, and when the dollar drops a little more...

The head of Germany's Fraunhofer Institute was over at Stanford a few weeks ago, chewing out Americans for letting the Government lose all the manufacturing jobs. Germany didn't let that happen.

Congress can turn this around any time it wants to. Never forget that on election day.

Offshore Spells HUGE PROFITS for Platform Vendors

[was_ms_now_linux]

The little known fact relating to offshore outsourcing is that the phenomena represents a huge windfall of profit to the platform vendors like Intel and MS. Even though the computers and OS's are not actually used to run alot of business over there, this second duplicate wave of purchasing has resulted in the equivalent of what happened here about a decade ago. Furthermore, the ass-backward code-intensive designs with a zero level of abstraction ensure the contracting companies here (the ones ordering the outsourced development) will be forced to purchase every single upgrade for the next five years. Totally worthless and impossible to maintain designs are great for business - if you sell OS's or hardware. Doug Hettinger www.SoftwareObjectz.com

Re:Outsource this...

[Anonymous Coward]

No, actually, in some sectors they simply cannot find the workers to do jobs. There aren't enough people who are qualified nurses and doctors. There aren't enough qualified engineers. In particular, there isn't enough of a market to justify the cost of an expensive engineer.

This is because OUR EDUCATION SYSTEM F-CKIN SUCKS. We're basically been screwing our own people for the past 25 years or so, and opting to use foreign-educated people.

It takes YEARS to educate someone to be a skilled worker. It doesn't matter WHERE they are from. So, what we do (as a country) is under-educate our own kids, and then pluck the best and brightest from the poor countries to be our mid-level professionals.

This is usually a "win" for Americans, even those who get their pay cut a bit, because it's always better to work with very talented people. These skilled people also end up creating some jobs because they will ultimately produce more than they consume.

With engineering, I think we got to the point where we had pretty much ALL the qualified talent from India. The people coming over under H1B weren't quite so good, so the cost of having them here was going to eventually overtake their value.

So, it makes sense to start investing over in India, because it's a magnitude cheaper to operate business there. It's really no different from operating a factory in another country, where the poverty there makes it cheaper to make a profit. It's not nice, but, neither is it doomed to result in hyper-exploitation (unless the local government helps out, of course) (see Honduras).

There are ways to keep the jobs here, of course. Tariffs are traditional, and they work. In fact, they work really well, because they cause more foreign talent to work inside America.

Another way is to improve the educational system here. Really, they're complete sh-t, and we don't even realize it. If this "voucher" garbage happens, it might even get worse, as people get ripped off even more. Still, in education and innovation, there's always some hope.

Yet another is to contiue with the trend of being a global parasite and imperial power. The American worker would, basically, benefit from their proximity to the American Titan, and support their subjugation of other countries.

Unfortunately, this last options seems to be the popular one lately.

I AM HYPER-PRODUCTIVE! I'M STILL UNEMPLOYED!

[ulatekh]

Yourdon would have us believe that, if we American programmers want to justify 5x the salary of an Indian programmer, we have to be 10x more productive.

Wouldn't that be nice? The reality is, the programmers that still have jobs evaluate interviewees based on the threat they pose. If you're really the sort of programmer that's several times more productive than average, then the programmers that interview you will consider you a threat to themselves and you won't get a job.

The following is an actual rejection letter I received recently. The names have been blanked out, though they don't deserve such courtesy. They e-mailed me this 50 minutes after I left their door.

ulatekh,

Thank you very much for taking the time out to come and interview with us here at company! I hope you had a decent time while you were here. The programmers all got together and we discussed the interview process and had to make a difficult decision to pass on hiring you.

Technically, you have the most knowledge of anyone we've ever interviewed - you most definitely know your stuff. But personality-wise, we couldn't see you fitting with the culture that we have on our team. I'm sorry it didn't work out, but I thought you'd like to know why we reached our decision.

manager and tech lead were very impressed with your knowledge. I know that personality-wise, all development teams are very different due to the people on those teams - we've spent a very long time building our unique team and the more people we hire, the harder it is to hire the next person because we require everyone on the team to agree with the choice to hire. You had no idea when you came here what kind of culture we have and your technical skills are so impressive that it only came down to personality-fit with the team.

Sorry for the bad news, but I like to give feedback on the interview process. Good luck on any future interviews and thanks again for coming over.

- creative director

Preserve my job by getting more competent? I don't think that's going to work for me.

Re:Forget Yourdon. Listen to your friend Phil.

[buraianto]

Regarding some of your points in part 2:

Best: Civil Service.

There are a limited number of civil service jobs. There aren't a whole bunch just waiting for all of those IT guys who have had their jobs outsourced. And how are these jobs paid for? Taxes.

A job with a SMALL PRIVATE COMPANY

Small, private companies are also more likely to fail than the larger companies. Less likely to have retirement plans, good medical/dental benefits, etc.

If modern Americans weren't constantly deluged with so much brainwashing designed to make them spend their money on useless garbage, they wouldn't need anywhere NEAR as much money as they think they do.

I agree with this. Of course, if everybody chooses this path, those of us who go to work and make something will then have a smaller market. Economic growth comes from producing more stuff, and producing more stuff only works if people are buying more stuff.

Play video games. Watch commercial-free movies, rented on DVD. Anything, as long as you aren't being fed commercial propaganda.

I don't remember where I was reading about this, it was just this week, but these are not the activities to engage in if you don't want commercial propaganda. More and more movies and video games will be used as advertisements. Maybe not as blatantly as a commercial on TV, but they will advertise, nonetheless.

Cut up all your credit cards.

I have two credit cards. They both get paid off every month. I have never paid interest on them. I view it as an interest-free revolving loan. (Don't tell my card company, please.) And you need to establish credit to buy a house, so it's a good idea to get credit cards early. But don't ever treat it as "credit". If you think of it as using money that you already have, just delaying the actual payment, you'll come out ok.

YMMV

Learn economics

[Gorimek]

But we must first challenge the concept that free trade is beneficial to all parties. How, precisely, has free trade benefitted the US or the Western world?

By allowing us to buy things we previously had to manufacture ourselves much cheaper from China (clothes & stuff) and India (software). Since it's cheaper we can get more of it (or other things we want), and thus live materially better lives.

Free trade is in large part what made the rich world rich. It's no coincidence that countries with the freest trade are also the richest.

Our trading partners - India and China - do not believe in free trade - why should we?

This argument is based on the assumption that free trade is bad for you. Something you do as a favor to others, hoping they will repay you in kind.

In actual fact, unconditional free trade is good for a country's economy, regardless of whether it's trading partners also practice it.

I know this flies in the face of conventional wisdom and government policy of pretty much every country, but nevertheless it is a basic fact of economics that is typically explained in 10-20 pages in first year economics text books. Don't take my word for it. Read a book on the subject!

A lot of people are upset about creationism possibly being mentioned in science books. But where is the indignation over this scientific fallacy - which affects our daily lives immeasurably more - being far more widespread?