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What Do You Do When Outsourcing Goes Bad?
Xphox wonders: "Recently we have been referred to an outsourcing company to finish customization on a script that the author had no time to complete. Everything was going fine until recently. At what point do you consider they may have just ripped you off, and how do you know when to file complaints and withhold payment?"
"I have been working with what I thought was a reputable outsourcing company, referred to me by the author of the software package. We agreed that payment would be made once everything was completed. After a few missed deadlines, the project finally seemed to be finished. The only thing left was a small bug fix, and an install script which needed to be completed. As agreed, he delivered the install script, and we made the final payment. Upon testing the new install script we noticed things did not work as intended, and all attempts to contact the outsourcing company has resulted in the following answer:
'My guys are still working on it.'My fear is that if I don't act now, I will not be able to recover any funds, and will be stuck with a product that is useless. It has been 9 days since I've received an email from them, and I'm starting to think I've just been taken advantage of. Since the script is protected with Source Guardian, I am unable to finish the modifications myself."
Get the source code! You might have called it outsourcing, but what you really did was pay someone to have an code empire in your domain. Even if they do finially deliver the finished product, you stuck with them for further development.
The force that blew the Big Bang continues to accelerate.
Before the inevitable avalanche of anti outsourcing and anti india comments, let me point out that the author hasn't made it at all clear which country their firm is located in, and wether or not the outsourcing firm in question is located in the same country.
What time do you have to react? Like if you act now as opposed to two weeks you'll make back your money? Unless you sent the money through a very trusting (read, you do a lot of business with) bank that has some sort of angel stop-payment plan.. you are S O L.
Where is the contract? Whose laws govern it?
You went with a company outside of your country to do a deal..
Why didn't you test what you got first and then pay for it...
I smell FUD... no details here, is this just an anti outsourcing fable?
As agreed, he delivered the install script, and we made the final payment. Upon testing the new install script we noticed things did not work as intended,
You made payment BEFORE you ran formal acceptance testing of the application (yes, including the installer). That was your fatal error. Once you've ponied up the bucks, you've lost all leverage short of a lawsuit.
If I were you, I'd email then and request a specific timeline/deadline for completing the work. Make sure your email contains language stating that what they delivered does not meet their obligations. Assuming they respond similarly (i.e. "we're working on it"), then at least you have some level of proof that they acknowledge that they are potentially breaching the contract you have. Then take their asses to court.
Good luck. Next time remember
- formal requirements
- explicit deliverables (see requirements above)
- formal acceptance test to ensure that the software actually meets requirements
Not letting management know how bad the code was is a HUGE mistake and disservice to your employer.
Never let social pressure or the unpleasantness of being the bearer of bad news stop the flow of information in your organization. If, out of loyalty and dedication to your people you work overtime for a week and get it working, you have to let them know, or they won't be able to be loyal back to you in return.
It also stops the Russian firm from realizing that they aren't giving out a good enough product to stay in business, and screws them over too.
Basically, letting information stop with you instead of passing it on damages the whole capitalist system in the long term, and you should only do it if you like being poor and unemployed.
Please I haven't seen any Indians who can do my job better than I. In most cases it isn't as good, however they can work 5$ an hour I can't. So even If I can do the job of 3 indians, it's still cheaper to hire 4 or 5.
.... etc. etc.
..... band wagon.
Thing is with American middle class losing thier jobs who will buy Overpriced American products ( they stay overpriced because the CEO's must still make Multi-Multi million dollar pay checks)
I don't see Indian Programmers making $5K a year standing in line to buy $2000.00 MayTag fridges and $30,0000 ford/Chevy/dodge SUV's
We are already seeing the short sightedness of all this Look at the stock market it is contiually weak, in spite of the fact that we have been in a 'recovery' for 3 years. Why, because consumer demand isn't as strong. Well when you are destroying good jobs and replacing them with lowing paying jobs, people are not rushing out to buy non-essential crap. Add rising health insurance rates which no one in the US wants to do anything about.
If the Indians think they are so great now, just wait, there is No great love for them here in the States, As soon as the Chinese or Africans or whomever can do the job cheaper, the Indians will be left with a bunch of vacant Call Center/Tech Centers and rising unemployed middle class. What will they do then, Nothing they have nothing to sell anyone wants other than the fact they were cheaper, for a while. To boot they will have left behind some major bad will on the part of the American public....
All the 'Free Market' fans here (everyone is free market till they lose thier job, house etc....) will be on the Chinese/African
There is No such thing as a free lunch or a free market someone has to pay......
So Long and Thanks for all the Fish.
don't get mad, get even.
just write a nice letter to the chinese embassy / chinese law enforcement, that a company you were working with turned out to be a front for a pro-democracy revolutionary group, falun gong, or pro-taiwan-independence movement or something.
i've gotten chinese spammers shut down this way, when they laughed at me. they aren't laughing anymore.
I remember being on a trans-pacific flight with this manager for a major corporation. He had been in China overseeing some project.
He said they're moving out of China soon.
Why?
Because the labor (these are specialized workers) is too expensive. That's right, China is too expensive.
It's true that the wage that the Chinese engineers are asking for has gone up. But that's a natural factor of supply and demand. Eventually, they are going to actual start demanding to be paid what they're worth to the company. However, their wage is still significantly lower than the one that the US engineers received way before the outsourcing occurred. So assuming that all other parts of the equation are the same, the company is still making more profit after *salary* (excluding other expenses) than it did when it wasn't outsourcing at all.
Nonetheless, this company is going to move to another country where the workers can be paid significantly less, thus maintaining their huge post-salary profit margin (again, discounting expenses in other areas).
Why are the doing this?
Because globalization has made it significantly easier to do so.
Because of globalization, it's now possible to start up a working factory, shop, or headquarters pretty much anywhere in the world. This means that you can specifically target the most impoverished countries, countries where the average person makes a 10th, 100th, or 1000th of what an American might, and set those people to work.
Now, in a non-growth system, where companies maintained their size and scope, companies would be able to hop back and forth between countries at whim. Whenever country A became too expensive, they'd simply move to country B until it became too expensive, then hop back to country A (now desperate for work).
However, capitalism cannot exist without constant growth. So, one side effect of this global offsourcing behavior is that as the salaries grow for the workers, so do their spending habits. They then, in turn, cause growth in their country's economy and increase demand for supplies and services, forcing the businesses to hire more workers to supply this demand.
As a result, eventually there will be no country where the workers haven't gone through this process, so there will be no place to turn to for "cheaper" labor. This, of course, assumes consistent growth.
Of course, this does pose a problem: currently, we're using up resources on a grand scale. And if our population growth continues as the average consumption of individuals go up, we may end up seeing a problem with a shortage of resources. This will cause prices for items to go up, which means that the increased salaries will have decreased worth (this is pretty much the case now in the US: you can live like a king in Beijing on $20,000 but in New York you'd barely be scraping by).
Therefore, only those with salaries at a higher order of magnetude will still live comfortably. In other words, CEOs and other financial elite. So, the gap between the wealthy and non-wealthy will continue to grow.
So, I do think that people who point to offshoring as being a tool to benefit those at the top are pretty much dead on.
Karma: Chevy Kavalierma.