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Pros and Cons of Tech Offshoring?
An anonymous reader asks: "There's an interesting analysis of tech offshoring at the moment posted on Membox. It looks at the pros and cons of the practice in two separate articles. Since this is a big issue in tech at the moment, it's good to see the arguments on each side given so clearly. What effect do Slashdot readers think offshoring is having on the industry?"
I haven't seen a lot of jobs actually go away because of it, but a lot of people are jumping ship out of fear - and we're having to hire lots of new people to replace them.
You see, without that little doohicky, the universe stops.
http://propheteer.org
The study of economics is based on a simple problem - human wants are infinite, but the resources to satisfy those wants are only finite. So the question becomes - How do we satisfy our wants with the most efficient use of resources?
From the pro article. I've seen this a lot- but there is at least one economic theory, distributism, that claims that human wants are just the mortal sin of greed and human NEEDS are what we should be focused on satisfying- and human needs are indeed finite.
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
Think about it...
By sending jobs to other countries you end up ensuring that your potential customers can't afford your product, as they have no income.
rooooar
There's 6 billions of us. Surely it IS possible to evaluate just how much stuff we NEED to live - food, clothing, lodging. The stuff we WANT, however? Infinite, because as soon as we get more we begin to want other things.
I never spellcheck and I freely admit it. Save your karma for more worthwhile "lol erorrs" replies
My former employer succeeded in outsourcing their operations to EDS, and are still a happy EDS customer.
They then tried a second cost-reduction step, offshoring their development to a well-respected firm on the opposite side of the planet. The timezone problem was a nuisance, but not a serious problem except when doing maintenance, so they offshored maintenance to the same company.
This seemed to work, but on looking at the financial results a few quarters later, they realized they'd done a very brave thing: they'd inadvertently offshored their software budgeting decisions. With both maintenance and new development in the hands of a supplier, the supplier was the only person who could make credible decisions about how much to spend. And the spending was growing.
So they turned around and started onshoring, hiring some of the folks who had been the offshoring team and moving them back to Canada, co-locating them with the user groups and the budgeting managers, and go control of their own budget back.
They're now genuinely reluctant to allow anything to be done remotely, including having me dial in from home. They want my body withing shouting distance of my manager!
Losing cost control can make you a little nervous if you're a big company, because it can rapidly make you a small company(;-))
davecb@spamcop.net
I think the real problem is lack of quality onshore. It makes the situation a nothing to loose move for a lot of companies. A lot of this has to do with the flood of IT related workers not too long ago. It was the career field of the future and a lot of people went that way. A lot of those same people have no clue what they are doing but still managed to get jobs because of the dot com boom.
Some of the code I've had to work with/modify might as well have been written in india. I often wind up looking at minimal to no comments, poorly written chunks of code, and meaningless variable names.
There are some good and great programmers out there. However, for every one of those I'd say there are 2-3 that don't know what they are doing. They waste development time, don't properly check their work, and extend the cost of a project.
A lot of other inustries can justify staying onshore because the quality is going to suffer if they ship the work elsewhere. With some of the code I've been forced to deal with, I'd say quality is not going to be lost.
As IT manager for a small business, I often have a lot of pre-sales questions about products. 1 out of every 2 times I call out to find product information, I get someone on the other end from India. These people can barely speak english and want to type my name and phone number into a database immediately before I can ask a simple question.
I hang up on them, every time. And as was recently the case with HP, I vow to never purchase products from that company again. Why should I want to support a company if the profits from my sale go to pay people in India? Further, why should I have to endure the same question being asked 5x because they can't understand English when I can pick up the phone and get reliable help somewhere else?
People in the USA who are in the tech industry hate people who are taking our jobs overseas. Since we are the ones who purchase products, having someone from India on the other end of the phone is suicide for these businesses. The money they will lose in sales will not be made up by the money they save on outsourcing.
LeoPolus Web Design: http://www.leopolus.com
Daniel Drezner has some interesting analysis on his site. His linked articles, especially the Foreign Affairs one, are also good.
I, by the way, am pretty agnostic on this issue, and linked to only one side because it's the only good discussion I've seen. (As opposed to, say, Lou Dobbs using an hour of CNN every night to rant about evil Mexicans.) I'd welcome similar links on the anti- side.
What I'm listening to now on Pandora...
My company was using TCS for a while, then opened their own office in Hyderabad to cut down on the middleman-costs.
According to several reports from Indians here and dealings with some of the managers there, Hyderabad is getting like Silicon Valley in the late '90s. People can simply walk out whenever they want, they'll find a new job the next day. There's a lot of turnover because of that.
Also, wages are going up. A couple of our test guys (who are dealing with hordes of Indian colleagues, of course) have noted that the wages are coming up to where it's not that much less expensive to hire in India. (It's still cheaper than the U.S. of course).
I had always predicted / feared that once this wage parity started happening, companies would start offshoring all their jobs to other places (China? Romania? the Congo?) but that does not seem to be happening, probably because few other countries are teeming with English-speaking programmers as India is.
This means that there's some hope for the trade equilibrium predicted by classical economics / big-business apologists, rather than the "race to the bottom" where every country becomes Third World, predicted by me and some fellow paranoids.
I was flipping channels on my radio and heard some AM radio guy complaining about offshoring. There are two things he said that caught my interest. (1) It's now highly skilled technology jobs as well as low skilled jobs going off shore and (2) the H1B programs are taking the few jobs that are here away from Americans.
Peronally, I though this was a bit overblown. It's not like there are no tech jobs left in the US not filled by H1s. At present offshoring is soemthing we should be concerned with, but it's marginal yet.
It also struck me as logically difficult to hold both these concerns, immigration and job offshoring, at the same time.
As an individual, you look at employers as these vast planets around which you, the employee, orbit. However from the point of view of an employer, at last a tech employer, you want to go where you can hire talent. If you are creating a tech start up, the Bay Area may present challenges due to crowding, transportation, and costs. But you are going to find a lot more world class talent there than you would in Boise, although Boise is a nice enough town where a hundred K a year will buy a pretty posh lifestyle.
It isn't just that jobs pull employees, employees pull jobs.
The thing is, the H1B program is a double edged sword. It brings talent here, and as long as talent is here, it keeps employers here. On the other hand, it expires and sends talent back over there. That's very bad. That enterprising young hotshot from Mumbai is very well positioned to sell you consulting services when he gets home. The program is practically designd to bootstrap offshoring.
If I were in charge, I'd eliminate the H1B program create a program that brought top talent here and encouraged them to put down roots. It won't cost Americans jobs. It will create jobs for them. The other problem with the H1B program is that it doesn't set the floor high enough. I've seen IT operations staffed at relatively low levels with imported Indians. This doesn't make any sense at all. You can get plenty of US people to man help desks and do basic system administration. Furthermore the costs of sending those jobs overseas is relatively higher and the benefits relatively smaller.
Think about a pyramid of technical skill.
At the base, you have people who man help desks. Not to say some of them aren't highly skilled but the entry requirements are low and so there are many of them. For every ten of those, you have one person who can administer systems.This goes all the way up to an apex with a handful of one in a million individuals at the top like Jose Corbato, Brian Kernighan, Linus Torvalds, Tim Berners-Lee and so forth.
The pyramid is really upside down. Employment of each numerous level rests on the effort of the smaller but more highly skilled level adjacent to it, so that the employment of vast numbers of people at the lowest skills ultimately depends on the creations of a few exceptional individuals. Having those individuals in your back yard has tremendous long term value.
Therefore, my answer to offshoring is to do everything we can to bring the brightest people in the world here. This is particularly the case with India, where there is a culturally different attitude towards emigration. I'd venture to say an Indian is 10x more likely to emigrate to the US than an American to India. Now it's probably curel and selfish to encourage brain drain from a place like India to a place like the US. But it is an answer to the long term concern about offshoring.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
What effect do Slashdot readers think offshoring is having on the industry?
About the same effect that Dutch Elm Disease had on Elm trees.
Between H1B's and outsourcing, the industry has decimated the software engineering profession. Many of my former co-workers have bailed out after months and even years of unemployment. And these were not "Learn Web Programming in 21 Days" people - these were people with Masters degrees (or higher) in CS or EE and years of experience. In many cases they've gone back to school and have started new careers and they're not coming back. A the same time US college students and high school students do not regard software development as a good career. Enrollment is CS / EE degree programs in the US have dropped dramatically.
I'm already seeing articles about 'problems' with outsourcing in trade journals. I'm also seeing articles from industry groups about lomming 'shortages'; which always end up blaming the US 'educational system'. Makes me want to whack these people with a large clue-by-four.
[Insert pithy quote here]
DEY TUK ARR JAAHHRBS!!
Here's a hint, Sparky: companies that aren't running ads on Monster or your local paper are hiring right now; they're looking for the right candidate, and the right one isn't a resume spammer. In fact, the smart candidate doesn't even need a resume to get an interview.
So, offshore more, please!!!eleventyone
Yeah, right.
"What effect do Slashdot readers think offshoring is having on the industry?""
It's causing some of them to get real jobs in the artistic fields.
...that they could walk into a room filled with several dozen experienced programmers, interview each one, and fail to find a single "qualfied" candidate.
Remember that not everyone has formal experience using the same set of specific products or tools that you have, and that many things (like file formats) are relatively easy for almost anyone to pick up and work with if they're even remotely competent.
Mainframe/UNIX Bit Twiddler and long time Windows/Linux Hobbyist.
The Theorem Theorem: If If, Then Then.
I see what you're trying to say- that labor is the basic value of money, thus things that are harder to create cost more. But that's not so- the stockbroker and the banker are paid the best of any employee in this economy, but they produce no actual goods. Likewise the stockholder and the venture capitalist are extremely well paid for produceing no products at all.
I agree with you and with Marx that the value of money comes from the labor of the people. But in the last 150 years, a small minority of people have been working very hard to change that- by use of cartels, monopolies, and multinational corporations. And they've succeeded- we've lost the war for a free market. The market is called a free market, but it hasn't been for some time now. Thanks to a phrase in your above post, I found this. In fact, I suspect you might be the same person. What most free marketeers fail to see is that we haven't had a free market in the United States since the 1840s. In fact, near as I can tell there hasn't been a free market anywhere in the world since the invention of the Steam Engine allowed what I call "foreign influences" to interfere in local markets. As long as those foreign influences exist- the net result of the free market will be capitalism and communism- not freedom.
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
That doesn't make it a common skill in the general programmer population, however, and that's my point.
We use a lot of specific technology in the airline industry, also, but over the years we learned that the probability of finding someone who knows those formats, languages, or systems/environments was just about zero unless they'd actually worked in the airline industry before.
Because of this, we decided that some level of basic technical training was going to be a fact of life regardless of who we hired, and in the long run that turned out to be better. A person with good previous general software development/support experience proved to be more valuable than some of the folks we'd hired who already knew the specific technology!
Don't be too sure that someone couldn't learn about DICOM in a week. I had a contract once where I knew the main language being used but I didn't know anything about the specific database in use, any of the text editors, or the general programming environment, and I was writing productive code at that site (and modifying an existing program) inside four hours, mainly thanks to their willingness to teach me what was needed.
Mainframe/UNIX Bit Twiddler and long time Windows/Linux Hobbyist.
The Theorem Theorem: If If, Then Then.
I don't personally know anyone whose written Windows device drivers, and I know a lot of people writing various forms of software on a variety of different platforms, businesses, and geographic areas.
Maybe it's a more specialized skill than you think?
What would a typical company need specialized Windows drivers for?
Unless they actually create hardware devices that are used on Windows systems (and that don't use a reference driver from someone else), that isn't going to be part of their problem domain.
Mainframe/UNIX Bit Twiddler and long time Windows/Linux Hobbyist.
The Theorem Theorem: If If, Then Then.
That's the question you need to ask yourself.
The WORLDFLIGHT flight operations system I worked on at NWA for the better part of a decade was a very complex online transaction system. Over 1000 discrete transaction codes, 2 million LOC (Fortran) even with very heavy use of the external subroutine library, roughly 30 feet of paper *programmer* documentation, additional end-user docs, vendor docs, language and platform manuals, etc.
I could probably bring someone up to speed so they'd be effective in a bug hunting or even development role in two to three weeks.
That involves a lot more knowledge than your DICOM specification, believe me.
If you don't have an in-house DICOM expert, I'm a little more sympathetic.
If you do, however, I'd say you're digging your own hole here.
Mainframe/UNIX Bit Twiddler and long time Windows/Linux Hobbyist.
The Theorem Theorem: If If, Then Then.
I've not actually met you in person, though. :-)
Mainframe/UNIX Bit Twiddler and long time Windows/Linux Hobbyist.
The Theorem Theorem: If If, Then Then.
The real problem here is that you accept classical economics as a set of rules that are inviolate and true- and I don't. In fact, I'm to the point that I consider the whole thing to be a big lie- GDP doesn't take the trade deficit into account because if it did, it would be instantly obvious that the United States is no longer a manufacturing country. All we produce is natural resources, which we send elsewhere to be turned into product, which come back and are sold to the American public as "Made in America" even though not a single component in them was. As for the Balance of Trade- Ricardo was a liar paid for his opinion by big business. His entire concept of "comparative advantage" is complete bunk because it fails to take into account the difference in standard of living and regulation (probably because such differences between governments didn't exist in the 18th century). Wake up and smell the coffee- classical economics is a failure at controlling economic activity. It just allows more parasites to hurt more people.
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
Some mornings I like to go for a walk. I would rather go to work, but I don't have a full time job. I feel very lucky to have a part time some time job teaching at the local community college.
/.
On my walk I see the same faces most mornings. Four of those faces belong to people like me. All of us are over 50 years old. All of us have graduate degrees. (Some CS, some EE, all technical graduate degrees.) None of us has a full time job. In fact, I am the only one who even has a part time job. We were all working for different companies. All of us were laid off when the companies out sourced our jobs. (In my case the company headquarters moved to Sinapore and their development to India.) Those are just the guys who live within a few blocks of me. I know a *lot* more over 50 out sourced engineers and programmers. I know a few who are just barely over 40.
One fellow has been out of work for 6 years, the rest for less than 4 years. All of us are very glad our wives have good jobs and that we saved a large portion of our incomes while we had work.
It looks like companies are using out sourcing as a way to lay off all their older workers and replace them with folks in India.
I'm pretty lucky. One of the fellows I used to work with, a damn good programmer, now delivers pizzas. A couple of others work for Starbucks. A few are at Walmart now. I've been applying at book stores. I love books and stocking shelves would be a relief from reading
Companies have always tried to get rid of older workers. We raise their health insurance costs and if we stay around they would actually have to pay those underfunded pensions we were supposed to get. They used to be subtle about it, now they just have to out source.
Twice this year, for the first time ever, my classes were canceled because no one signed up for them. Students no longer see any value in learning to program. At least not in the US.
Stonewolf
After being in the IT industry since 1991 (did my undergraduate in Mathematics) and working in technical IT sales since 1994, my career was fantastic up until 2003. In mid-2000, I left the company I was with because the hardware margins were drying up and I didn't see them recovering for a long time if ever. I moved to a software development company only to have to fight tooth-and-nail for every contract for the next 3 years due to outsourcing. The margins there are gone too.
The last 2 years since 2003 have been really hard. I have a house and mortgage, a wife, 2 young kids, 2 cars, etc and I've been struggling to pay my bills for a while.
I sit 3 interviews the other day. Two of them were with companies that are outside of the IT industry altogether, since I've decided that my sales experience and background makes me suitable for a variety of industries (a widget is a widget kind of arguement). Here's the results, condensed version:
I get 2 offers from the companies that are not in the IT industry. They both say the same thing: "we know that you don't have the necessary skills to get up and productive for a little while, but we see great potential in you and the value that you can bring to our organization. We look at our employees as partners in our success, and to this belief, we are going to pay for your training and pay for you to learn our business. Congratulations!"
Here's my results from another large IT company that recently replaced their CEO that I sat an interview with: "we are looking for someone with the ability to get up and running immediately from ground zero with no training at all. We see a great fit for you in this other job, but we're not hiring for that right now. Thanks for the interview and we'll keep your resume on file."
Each company that I interviewed with, I was going for a job valued in the $100K+ range (base plus commission plus bonuses).
The problem with IT companies today is that you as an individual get no respect at all. They don't have people onboard who have the foresight and intelligence to say "I want you not for what you can do for us immediately in those first 3 weeks or 2 months, but for what you can do for us over the course of 10, 15+ years as you build a career with us.
When I was in Junior Achievement in high school, my mentor was a guy from this same large IT company. I was a VP for my final company at Junior Achievement, and my mentor was really smart. Scary smart, almost like some of my classmates at university. I just don't see the "value mentality" existing at most IT companies today anymore. Neither do most of my friends in the IT industry which is why so many are leaving, and so many young students are dropping CompSci as a major. When you start outsourcing and offshoring, whatever, you need to recognize what you're losing. You aren't losing "economic resources", you're losing people. And many of them are skilled and talented people with families and friends, etc that support the IT companies through waterfall economics. Some other poster mentioned that the amount of money that these companies will save will pale in comparison to the amount of money and goodwill that they'll lose over the longer term, and that poster is IMHO dead on the money.
My IT career is effectively over now because I've had enough. I've put up with enough, I've worked the 60 and 70+ hour weeks, and its gotten me nowhere. Screw the IT companies, I've realized that my success no longer involves them or their success. And as more and more people like me do this, the IT companies are the ones that will suffer in the longer term as they no longer have my support or my purchasing loyalty in the future. You want to outsource and offshore? No problem, go ahead. BUT remember, when it comes time for me to buy equipment and services from you, I'll be looking for the lowest price and FUCK YOU.
pi=sigma{n:0-infinity}[(1/16)^n][(4/(8n+1))-(2/(8n +4))-(1/ (8n+5))-(1/(8n+6))]
That I'm out of a job?
Oh wait, you wanted effects on the industry...
I think you misunderstand. I've been writing code professionally for 17 years now in various contexts, and I've learned that every business has its own culture and its own set of idiosyncrasies.
When it comes to internal software development, I suspect there is no "typical" company.
I'm only questioning the (apparent) high level of specificity in your stated requirements for the Windows device driver developer position.
(I've not seen the actual job posting -- all I have to go by is your comments here on Slashdot).
By specifying "Windows device driver developer" and looking only at that very specific subset of Windows development experience, you seem to be putting up an artificial barrier that locks out a sizable number of experienced Windows developers who may have been able to do that type of task with very little adjustment.
That's all I'm saying. If the folks interpreting incoming resumes are actually being given a little more latitude when doing their evaluations, then I could be mistaken. I'm just giving you my initial impression.
Mainframe/UNIX Bit Twiddler and long time Windows/Linux Hobbyist.
The Theorem Theorem: If If, Then Then.