Slashdot Mirror
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?"
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
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.
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]