Long Term Effects of Outsourcing 628
simulate writes "There have been several postings about outsourcing and offshoring in the past
few weeks. Is outsourcing just a fad? In Outsourcing
Programmers is Bad Strategy for Software Companies
author Michael Bean compares offshoring to the enthusiasm for Internet startups
in the Nineties.
He claims
that
outsourcing programmers is bad for companies not because
of the programmer layoffs, but because technology companies lose their
capacity
to innovate.
Offshoring is a mistake
when technology companies confuse operational
effectiveness and strategy." I don't think the comparasion to Dot Bombs is entirely accurate - the trend to globalization overall has been going on for decades. Still interesting piece.
Not always a great idea (Score:5, Insightful)
Re:Not always a great idea (Score:5, Insightful)
Re:Not always a great idea (Score:5, Insightful)
You are joking, right? If you knew anything about IT (hint: there's a lot more to it than the web) you would know that finance, pharma, telco etc are in the driving seat as far as advanced IT goes. Why do you think Sun, IBM, Oracle et al are selling the top-end kit to? Any company that can use technology for competitive advantage will drive (i.e. pay for) innovation to happen. Finance and telco created a whole new industry, data warehousing, which forced the development of mass storage, fast networking, massive parallelism. Pharma created a whole new branch of computer science, bioinformatics.
The innovation that happens in the public eye is trivial compared to what happens in corporate cubicle farms and data centers.
The reason Western software is innovative is because it is driven by the needs of Western companies. The reason India doesn't innovate is because (aside from Western companies outsourcing to it) it doesn't have large or complex enough domestic businesses competing with each other to push IT as competitive advantage.
Re:Not always a great idea (Score:5, Insightful)
Re:Not always a great idea (Score:4, Interesting)
But Quantitave finance jocks in other departments do some seriously wacky stuff for technical analyses and Financial Instruments
MS does well in part because it's the brandname such stock market people see when they're using Microsoft OLAP and MDX (SQL RDBMS tables are two dimensional, MDX is n-dimensional, limited only by computing power. Needs LOTS of computing power.). OLAP and MDX are things that most computer geeks haven't even heard of. They don't realise that MS does in fact do some very interesting stuff.
Re:Not always a great idea (Score:3, Insightful)
Or perhaps the reason that banks have more old code and old systems sitting around is because they were among the very first adopters of IT. The fact that a company maintains the same code base for several decades doesn't mean that they are somehow inferior. It means they have a longer lifecyle in mind than flash in the pan companies.
BTW, just judging from web sites, banks tend to employ more advanced encryption, have larger databases, etc., than your typical web site. Of course,
Re:Not always a great idea (Score:5, Insightful)
These companies might be innovative, and they might even be creating innovative software, but they are not "software companies", and hence the outsourcing option is a viable one.
The great-grandparent post claimed that software companies (i.e. companies which produce software for profit) cannot outsource. The grandparent post pointed out (rightly) that such companies employ a tiny fraction of all software developers.
There are additional reasons... (Score:5, Interesting)
...for reduced ability in India that many westerners don't realize.
India is a caste-based society. In recent times, the lower castes have been throwing their weight around in their legislature.
Of particular concern is that they have implemented a "graduated" admissions policy in their universities. An upper caste member might not be able to get into a school with a 90% score on the entrance exams, but a lower caste member may be assured admission with a 70% score.
Because of this type of (reverse)discrimination, many upper caste individuals of means leave the country to obtain education and work elsewhere. While India is a big country, the trend is concerning, and western outsourcers should be aware of it.
Re:There are additional reasons... (Score:5, Funny)
But enough about the United States; what were you going to say about India?
(+1 Snide, here I come!)
Re:There are additional reasons... (Score:3, Interesting)
The caste system is breaking down fast. We adopted a little girl from India recently. Used to be that adoption was unheard of in India because you could never be sure which caste the child came from. But there has been quite an upsurge in adoptions by Indian parents in the last decade. This breakdown, though, is mostly a middle class urban phenomena. While there is a large
Re:Not always a great idea (Score:3, Insightful)
Nothing innovative ever happens in a "corporate cubicle farm." Period. Truly innovative, entreprenuerial people leave the "corporate cubicle farm" as soon as they possibly can because risk-averse middle management has made it clear they have no use for competent, creative people.
Re:Not always a great idea (Score:3, Interesting)
They wanted an assembly-line grunt worker who did brute-force unintelligent development and didn't ask questions. Any time I stepped out of line (by suggesting more efficient ways of doing things, suggesting anticipating performance issues rather than ignoring them until it was too late, or generally attempting to use any software development idea invented in the
Re:Not always a great idea (Score:3, Insightful)
Of course, there are many decent, intelligent managers out there, but I have found an inverse correlation between company size and manager quality: The bigger the company the more clueless management te
Re:Not always a great idea (Score:5, Insightful)
I have worked in programming jobs for over 9 years now.. both within US as well as many other nations across the world. Right now I am living in India.
All I see in this discussion group are rehashed stereotypes. Let me address these;
Misconception 1 - American programmers are better.
Not necessarily. Indian programmers aren't necessarily better either. The averages are about the same. But there are exceptional programmers in both camps and then there are a lot of duds.
Misconception 2 - Indians are not innovative.
One of the aspects of being in a developing world is that budgets for research and development are always very hard to come by.. But not any more. Indian companies are throwing money at research and development now...Everyone here knows that the service industry for pure outsourcing cannot last for ever.. So there is a desire to innovate and get into new areas.. to innovate as much as possible when money is not a problem. This is not just true of India - look at China, see how fast they are innovating
I have played a lead role in a very large project for an American publishing company - this project would not have had the slightest chance of even taking off the ground if it weren't for our team.
The American end of the programming team was quite antogonistic when we started - had some really racist remarks thrown my way. But within a month, we had won their confidence and I have had multiple mails from the same people about what wonderful work we had done. One of these projects later went on to win a Java Developer Journal award.
PWC was involved in another part of the same project and there was a desire within the American programmers to have PWC thrown out and have us take their place. NOTE: Not from the management but from the programmers. The only reason this didn't happen was because there was an ex-PWC chap in the management team.
I have worked on other projects as well which were being managed and programmed by American teams - which were floundering. Since we have taken over, these companies now have a product they can sell.
This is not to say that we haven't had failures - we have had our share. But please don't make it seem like we are incompetent idiots who can only obey orders and even then do the job badly.
Management (Score:3, Insightful)
Many developers suck. Most management can't tell which ones to keep. Thus, they toss them all out and try their luck at the foreign labor.
I'm no statistician, but maybe if you hire 3X as many foreign workers and let chaos do its thing, you'll come out ahead. Or maybe that's their hope.
Re:Not always a great idea (Score:5, Interesting)
This is an example of the horribly bloated costs associated with hiring American workers. Just because I bought, and can afford, a $428,000 house doesn't mean I'm a better high tech worker, or that I'll work better or harder for the company. It's just a matter of the crushing overhead of living here.
How does that make people more innovative?
Why can't Indians start their own software companies, write their own software and compete the heck out of us?
If I were starting a company that needed a lot of programmers, I think I'd leave the country to do it.
D
Winchester, IN (Score:3, Informative)
Our median house value is $67,000.
http://www.epodunk.com/cgi-bin/housOverview.php
Joe Batt
Re:Not always a great idea (Score:4, Insightful)
Of course, India isn't the only place you could go - Hungary, where I live, is also a great outsourcing destination, even if it's a bit colder.
Or you could go to a smaller place in the US, away from the coasts, and cut your labor cost a lot as well. That might be nicer for you if you wanted to stay in the US and take advantage of its IT infrastructure, honest postal employees, and such.
But when I look around and see that here in Budapest I can hire a talented, experienced, multilingual IT professional for about the same as I would pay for an entry-level data-entry clerk back in San Francisco...
effects (Score:2, Insightful)
Re:effects (Score:4, Funny)
Re:effects (Score:2)
Re:effects (Score:5, Funny)
When your on strike you could just kick everyone in the balls when they walk in and yell "GO TO A FUCKING LOCAL MERCHANT ASSHOLE!"
It would be awesome.
Re:effects (Score:2)
is outsourcing just a fad? (Score:2, Insightful)
idiot
But... (Score:2, Funny)
Those guys have MBAs. They must be smart.
Re:But... (Score:5, Interesting)
The trend we're seeing is people who are just looking at the their numbers, which were probably fsck'd up anyway, and not at the long-term ramifications to their IP.
I just finished a class last semester that drilled into our heads that projects can be calculated in ways that will show them to be profitable, or calculated another way, to be unprofitable. Unfortunately, there's a lot of people out there who think accounting is a science.
Re:But... (Score:3, Interesting)
I learned this point first hand decades ago when I had a summer job working for the head accountant of a manufacturing firm. Most of the job involved hand typing numbers from mainframe printouts into spreadsheets on a PC. (The kind of task Perl would eventually be invented to handle.)
However, part of the job was to adjust the magic "fudge factors" in the spreadsheets until the results matched their expectations. Each kind
Re:But... (Score:5, Insightful)
This is exactly the problem: the people running the business don't understand what the business does or how it does it.
If you were to go down to the manufacturing floor and ask them what the "scrap percentage" was, I'll bet 90% of them could at least tell you how to figure it out; they'd point to a bin full of bad parts and say "count those, and then divide by the total number produced". "Overhead" is a bit more tricky, but it still isn't some magic unfigurable "fudge factor". the only thing that makes it difficult to calculate is the fact that everyone is lying about their numbers to make their department look better. (Notice that I said "lying", not "manipulating". I don't believe in double-speak.)
The only thing keeping accounting from being a science is the lack of integrity in the people practicing it.
Re:Your professors are teaching you 1995 business (Score:3, Insightful)
Re:Your professors are teaching you 1995 business (Score:3, Insightful)
It'll get worse before it gets better... (Score:5, Interesting)
If I seem a little hostile about this particular trend, it may be because the jobs of a few people I know are under threat as a result of it.
Re:It'll get worse before it gets better... (Score:5, Insightful)
Re:It'll get worse before it gets better... (Score:5, Informative)
Ok I'm tired so I'll try to explain a bit. The majority of posts I've been seeing on the Sunmanagers mailing lists are often questions as dub as "How do I reebot my e450 thank you Jawalahar!", and that's scary. If I'm saving say $400 for outsourcing but paying $200 in downtime because an admin is a moron, $100 in downtime waiting for the idiot admin to get a reply from a mailing list, where is the savings? $100 you say? What happens if I lose customers while my business is down?
eg:
Again, apologies if it seems I' nitpicking but I'm not, I just notice the majority of questions that are for one: easily resolveable to an experienced admin, easily resolveable via googling, are posted by people in countries that American chooses to use for outsourcing.Re:It'll get worse before it gets better... (Score:5, Insightful)
About two months ago I emailed the owner of sunmamanagers with a request to see if there's something we could do about the suspicious flood of incredibly newbie and elementary questions we'd been getting lately, all from Indian-sounding names @yahoo.com. I don't really care that they're Indians, but for Christ's sake, Sun Managers used to be about "I'm an experienced sysadmin and this absolutely strange thing that isn't covered anywhere is happening," not "I need a script that will do . Please help."
Re:It'll get worse before it gets better... (Score:4, Insightful)
Um, me three. It's come to the point where I don't even want to post real sunmanagers-type questions because I figure somebody who can't even install RAM in a 420 will try and answer me.
I think we need sunmanagers-karma points or something. But then it would probably degenerate into expertsexchange (where bad advice is dispensed at least as often as good.. which is worse than it being all bad!)
Re:Argh... (Score:4, Insightful)
In the old days (I'm talking BBSes here), there was no Google, no "web", and no easily searchable archives of a decades worth of discussions. Most of the online projects had little or no documentation. The Telegard BBS software, for instance, was a pile of mostly obfuscated, uncommented (or incorrectly commented) code. There were no autoconf scripts for building on different platforms. Most of the interesting knowledge was in people's heads, which made the question/answer groups very valuable. There were few enough newbies that answering their questions was not overly taxing.
Now, we have Google, we have the web, we have discussion archives, README files, support "Knowledge Bases" and so forth. The user guides for many projects are still abysmal, but at least the more popular ones have gotten quite good. We also have an enormous amount of newbies. So, in short, the number of people asking questions has increased dramatically, and there is much less excuse for them.
As a list member, why should I expect to have my question answered without bothering to read a README, search the web, check the archives, etc? As a project maintainer, when I spend hours putting together and editting FAQs and documentation, why should I not be angry that the users do not bother to use them?
Sure, there are holes and ambiguities in documentation; there are advanced problems and unusual circumstances, but most of these questions are not about these things. Most, in fact, are not even looking for the information, but a solution: "Can you show me a script that solves exactly my problem?" Reading this kind of question, especially after referring them to appropriate tutorials, tells me that not only did they not do their homework this time, but that the really don't want to know how to do it next time either--- they just want their problem to go away at the expense of my effort. Rather rude, don't you think? It is just salt in the wound that the people asking these questions are the same people who are taking jobs here. These folks won't invest in their own skillset, but they will leach off of mine.
I think, to a large extent, this is where the "old spirit" has gone. In order for some of the politness and openness to come back, there has to be a measure of common courtesy on the other side.
Re:It'll get worse before it gets better... (Score:5, Interesting)
I call their tech support number, and get a guy in India, after indicating what I want, I go to their sales department which appears to still be back in the states (American accent anyways). After saying that he can't help me, he transfers me back to India for tech support. After which I just hang up...
Ultimately I searched the web and found someone who does sell Dell Parts including for the older computers.
However Dell gets a Failure mark from me on this, which will affect how I buy my computers in the future. If I can't even get a straight answer about a power supply, can I get a straight answer about other issues that I could have? All I really wished for was a "Yes this is how you order your power supply" or "Sorry this power supply is no longer offered" sheesh...
Did some of this have to do with the fact that one part of the company was in India, and the other part of this was in America, and nobody really knew who to talk to, so I could get a straight answer? Probably...
Anyways herein another issue is realized, collaboration becomes more difficult. It is harder to instruct people on what to do, and what not to do when they aren't in the same place, and instead are half a world away. They don't go to the same management briefings, the support people never hang around the water cooler with the sales people, and in general are the last to know in any such policy changes. Thus would be the least likely to know where I could get a power supply.
Anyways I've vented enough but hope I've provided enough insight on to the difficulties of Outsourcing vs. In-House.
Re:It'll get worse before it gets better... (Score:5, Informative)
Re:It'll get worse before it gets better... (Score:5, Insightful)
when you plan for the future you plan and project for 5 years... today they dont care about anything but how we look next quarter.
Short sightedness is creating this phenom.. and it's due to non-leaders being in leadership roles.
we can get inkjets for everyone instead of a new pair of color laser printers as it's cheaper this quarter.... to hell with the fact that within 1 year we will spend more in ink than the cost of the 2 laser printers and the supplies to run them for that time period.. don't laugh, that was the last manager's meeting's topic... to buy 30 $39.00 inkjet printers instead of 2 HP color laserjets.
we will continue to see companies fail and further deth sprials until these companies start getting leadership that actually has a clue how to run companies/business.
Tech Consulting (Score:5, Interesting)
FYI - I worked for Andersen Consulting (now Accenture) so I know how those guys do business. I left after two months
Re:Tech Consulting (Score:5, Insightful)
Yes, but in the industry, Accenture is a byword for disaster. Every project they get involved in runs vastly over budget, is late (sometimes years late) and often doesn't even do what it was supposed to in the first place. NIRS2, anyone? Accenture (and the rest of the Big 5, EDS, etc) is a vampire feeding on the clueless... their slick suits sell gargantuan consulting and systems implementation projects to managers who are intimidated by technology. They'd get laughed out of the building if they pitched to the savvy (free tip: if any big consulting firm pitches to you, make it a condition of signing a contract that the people who do the pitch will be working full time on the project. Watch them squirm, because the consultants business model requires that they dump cheap newbies on you to free up the experienced to sell more engagements).
I worked for Andersen Consulting (now Accenture) so I know how those guys do business. I left after two months
Yeah, I used to be a management consultant too, so I know all the tricks
Re:Tech Consulting (Score:3, Interesting)
I am a recent college graduate, and i was astounded by the amount of non-programming related majors that work here, as full time programmers. Psyc, Social work, Art, yeah, every except CIS, CS, other related programming majors.
ps, you can also tell by reading the code that someone who dosen'tknow what is going on, was the one wrighting it.
Re:Tech Consulting (Score:4, Informative)
Yes, EDS should be avoided. It's like they almost try to not be customer-friendly. They require even the most minor changes go through a 30-day change review process. I understand the need for a change review process, but theirs is particularly nasty, and doesn't do a lot of good (noone actually reviews the changes like they should).
Re:Tech Consulting (Score:5, Interesting)
I'll second this. It doesn't have to be big projects either, and it isn't just Anderson/Accenture - I've seen it happen with other large consulting companies on smaller projects that could be done with 2 or 3 people in less than 6 months.
The play is always the same - send in the guys in $2000 suits to close the deal and then dump the specfication on clueless new-grad code monkeys. Not only are the coders terribly inexperienced, but they have not been part of the specification process so they have no information to make good decisions or question anything. A few times in my previous job when I cleaned up from such disasters, looking at the code and documentation produced by these people was almost enough to make you cry.
More clued in clients would often do as you suggest - make it a condition that you have to have at least some of the people involved in the specification actually involved in implementation as well.
At some point.... (Score:5, Insightful)
This would be similar to the people on eBay who just sell drop-shipped items.
If you ask me, India is on the way to the Shoe Event Horizon, and it will only take one piece of protectionist legislation in the US to tumble the whole house of cards.
Re:At some point.... (Score:5, Insightful)
it will only take one piece of protectionist legislation in the US to tumble the whole house of cards
Or for Pakistan to threaten to nuke them again, as they were doing just a few years ago. The first time a deadline is missed, and money is lost, because of instability in the region, I think we'll see lots of this work come back. Businesses don't appreciate uncertainty.
OTOH, if outsourcing becomes entrenched enough for long enough, then it becomes in America's interest to protect their stability with our own military force projection; witness Taiwan, or military protection of oil interests in the Middle East. How long until we turn this cusp I don't know--it has to be a factor of how much of their capital investment tax-paying-and-Congress-lobbying American Corps have to lose, and if the cumulative amount is enough to risk sending US boys to die for.
But that is the final result of India gaining outsourcing dollars--they are liable to become another Taiwan, which means that US boys might well be sent to defend India against China or Pakistan, to protect US Corp's right to unemploy those soldiers when they get home. India must appreciate having another friend in the world, considering China's expansionism and Pakistan's recent threats--so they'll be sure to play this for all it's worth, as soon as US Corps are extended there enough.
Re:At some point.... (Score:3, Insightful)
Re:outsource the CEO too (Score:4, Insightful)
Say an American programmer works for $30/hr and an Indian programmer works for $3/hr. $27/hr savings, not bad. Say a CEO works for $1.2M/yr, $600/hr. The outsourced Indian CEO will work work for $3/hr. $597/hr saving - great!
Re:At some point.... (karma whoring here) (Score:4, Informative)
See here [berkeley.edu]
US Programmers vs Off Shore Programmers (Score:5, Insightful)
Re:US Programmers vs Off Shore Programmers (Score:2, Informative)
We're saying that outsourcing stiffles inovation because it separates design from the rest of the company. This could be just as true for US companies outsourcing to India as Indian companies outsourcing to the US.
Re:US Programmers vs Off Shore Programmers (Score:4, Insightful)
No, they are (probably) saying that typically outsourcing firms are set up to do grunt work, and the parent company performs the high-level "thinking" work that gets handed off to the contractor. This ignores that fact that lots of great ideas are generated down in the trenches, and since there are now two barriers (geography and the contractor barrier) between the thinkers and the trenches, this source of new ideas could get lost.
Of course, eventually the outsourcing countries will probably develop the means and confidence to start doing their own design and high-level work and bootstrap themselves above just doing "grunt" work, but that takes years to build the level of infrastucture and reputation needed for that.
Re:US Programmers vs Off Shore Programmers (Score:5, Insightful)
Yet, there are still significant downsides to "offshoring" divisions of any company, especially programming. One would be the potential of a competitor latching on to this and using it as a "Support Americans" marketing ploy, this worked quite well for the big three auto makers in the 80's, if only short lived. Another would be the long term prospects of your company. Succesful companies are built on hard working employees that prove themselves in the trenches of their respective companies, rising through the ranks to middle and upper management. I don't know of too many companies that survive on exclusively hiring individuals that have no prior experience in their industries. A good mixture of fresh with experienced management is preferrable, in my opinion, but too many of either can be a problem.
That's my 2 cents.
Outsourcing Solution Here (Score:5, Informative)
Outsourcing = Capitalism (Score:3, Insightful)
Re:Outsourcing = Capitalism (Score:2, Interesting)
Re:Outsourcing = Capitalism (Score:2, Insightful)
Re:Outsourcing = Capitalism (Score:2)
Although we mainly do surplus work for companies who find themselves having to meet many deadlines at once and who's internal ressources are not threatened by us, we don't do the evil outsourcing : )
There is a place for outsourcing, it is not necesserally (sp?) bad, but it is a tool that must be used wisely, and we have been seeing many cases of this tool being used unwisely recently.
But your general point about forcing this kind of globalisation still stands, I just wanted to defend
Problems with outsoucing (Score:4, Insightful)
The bottom line looks great, when you start digging around your new app, or code you find that the quality is generally missing.
Gasp! Actual insight! (Score:5, Insightful)
The hard part about realizing the gains from outsourcing is that most firms aren't up to managing such a long-term, strategic relationship in the manner that's required. When the work is done in-house, you can trust that the developers have your company's best interest in mind - when dealing with an outsourcer, their ultimate goal is to extract as much money from you as possible. If done right, it can be worth it, but as we've seen, many firms haven't been up to that challenge.
Re:Gasp! Actual insight! (Score:3, Interesting)
That is exactly right. Indian companies themselves have this figured out pat down with their experience in the ofshore-model as they call it. For this very reason they are now directly bidding for US contract, competing and winnig against companies like IBM, who are still trying to really figure out the model, and so have higher costs. In fact IBM lists Indian company Wipro as one of its most formidable comp
the autor is a tad confused... (Score:4, Insightful)
the author seems to be under the impression that the success and innovation of a product is purely in the hands of a bunch of software developers. this is rubbish. innovation in the software industry is also about building a product to solve a particular problem - and well. if the functionality is well designed (say with some good interaction design) by a US-based company, the specifications can be written up in the US and sent to the Indian shop for authoring. in a well designed component-based framework, the "glue" can be built in the US whereas the components or specific objects can be farmed out at a lower cost.
Outsourcing == Bad Security (Score:5, Interesting)
NOTE: I am *NOT* saying *ALL* people from other countries are dishonest. You can find dishonest people anywhere in the world.
What I am saying is that if you turn control of your software code over to someone else, you run the risk of them altering it to their advantage. This also applies to local hires as well, but it's MUCH easier to keep track of what your people are doing locally than half a world away.
Why do you think that the US Government/Military doesn't outsource? The same with most financial institutions: SECURITY. (Microsoft not included.)
Bad economic security, too. (Score:5, Insightful)
Re:Outsourcing == Bad Security (Score:3, Interesting)
Sorry... wrong.
I've consulted to 3 of the largest banks in Canada, and they DO outsource. Seeing as Canada only has 4-5 banks, that would meant that most *DO* outsource.
In my experience, it didn't work out in 80% of the work performed (which is why I was called in), due to everything from management issues to lack of technical expertise of the contractors.
And he _almost_ got it (Score:2)
Outsourcing Primary Development is a Bad Thing (Score:4, Insightful)
Design in America is confrontational. It has to be. That's what makes American software products good. When a company takes it's core software and ships it overseas it looses that drive from employees to make the software better.
This is not to say that software developed elsewhere cannot be good but it does mean that software developed in India must use an Indian model for design and development if it is to be successful. For an American product competing on a slight technological advantage this is bad.
HP, as a sidebar, tends to outsource end of life stuff to India.
Re:Outsourcing Primary Development is a Bad Thing (Score:3, Funny)
So what are you saying? Lots of song and dance numbers in the code?
A different perspective (Score:5, Informative)
Outsourcing (Score:4, Interesting)
o While Indian programmers (we used 8 different ones for 6 different projects) may be perfectly competent to produce software to spec, they usually ALWAYS built it to spec and NEVER brought up any issues they might have found in the process. Either they didn't see a flaw in the design or just figured it would be job security if they changed or fixed the ap later.
o We had no luck with Russian programmers (We had went thru 4 of them and none could complete the project they say they could have)
o American (We used 10 of them for 8 projects) outsourced programmers communicated MUCH better with their project managers and usually offered suggestions to how we might want to change the app to make it better or more efficient. The applications developed stateside required less QA and went to market faster.
Is this a good enough sized sample to make judgements? Maybe not. But good enough for us.
After the six months, it just didn't make sense to outsource, howerver if we do again, it will be domestic. The shortterm costs may look good but a 33% savings per hour usually gets lost in the longer development cycle.
Re:Outsourcing (Score:3, Interesting)
Opening a subsidiary is not exactly outsourcing (Score:5, Insightful)
For example of innovations in subsidarys outside US see
http://www.iht.com/articles/121488.htm
and the slashdot story
http://slashdot.org/article.pl?sid=03/12/2
Innovative CAN happen offshore (Score:3, Insightful)
fair analysis (Score:3, Informative)
The percentage of development work that is truly innovative is relatively small, but the article is correct. Out sourcing the "innovative" parts of a company is very dangerous and will lead to more problems. From first hand experience, innovation comes from interaction between the developers. Very few individuals can cook up innovation in box all by him/herself. Can innovation happen in an outsourced model? Sure it's possible, but it's going to be considerably harder. This is why companies like Oracle, MS, Intel and others are expanding their divisions in India and china. They maintain tight control because it's not out sourced to another company. Companies can offshore their R&D, they just have to open a division in a foriegn country. For better or worse, that's reality.
Weird... (Score:5, Insightful)
Based on my trip, I don't think good programmers should worry. More importantly, if you have the skills, you are way ahead of your Indian counterparts right now (emphasis on right now). Keep improving your skills and becoming more and more expert and you will continue to be employed. Focus on fad languages and "me too" web designs and you're putting yourself in front of a train. I can't tell you how many people in India listed C# and Java as their primary languages...C'mon now, we all know that those are good for small things and prototyping, but they aren't languages you write OSs or such in.
Offshoring and outsourcing are not bad in their own right, but managers who think it is a panacea will be bitten for their lack of vision. The world is going to be global. Get used to it. Recognize that we AREN'T worth more than Doctors and other professionals.
Every profession, when it is in its infancy, has the potential to create very wealthy people relative to the norm. After a time, those new professions become common and the lucre standardizes lower than originally expected. Our incomes in the West will decrease somewhat. I think it sucks, too. That said, the cost-basis for India is growing geometrically now (from 4k to 7k to 18k in five years). Guess what? Those programmers in India who are good are unwilling to be without the amenities that you are I take for granted...good phones...broadband...etc. The infrastructure must grow and that costs money...so you have to pay them more...and costs grow.
Get over it, grow in your profession, become an expert and highly sought-after. It doesn't matter where you live...it matters what you know and can demonstrate.
Dave
Re:Weird... (Score:3, Interesting)
In 4-5 years when these guys have been through three,four or five big projects and they have learned the ropes...LOOKOUT!
They now have the tools, the infras
Re:Weird... (Score:5, Funny)
When I used to daydream that one day, technical writers would be as valuable to a company as programmers, this isn't quite what I had in mind.
Also interesting: Wal-Mart role. (Score:3, Interesting)
Bad for US too (Score:3, Informative)
globalization irrelevant (Score:4, Insightful)
That's not what he's talking about; it doesn't matter where the programmers are. The point is that if the programmers aren't really part of the company, the company is less likely to have the capacity for long-term innovation.
My solution. (Score:5, Insightful)
How long until (Score:5, Insightful)
They can skip the normal growing stages of setting up the megacorp, because they already have it. Offices, research, staff, software, it, they lack everything but the name - right now. Once some of these companies lose a contract with our corps, theirs nothing to keep them from setting up their own shop under their own name. This is the next trend in outsourcing - megacorps themselves.
There is NO compelling reason for these companies not to do this. They are making large profit from back of the house, it's inevitable they'll want the profit from the front of the house as well. The irony is that these large corporations are training the competition and replacements and most dont even see it coming. Is it arrogance that causes people to overlook this inevitability?
A little perspective (Score:3, Interesting)
Could be a cycle (Score:5, Insightful)
The problem is, in the 1990s there was still a pool of people for these orgs to use in re-insourcing. If large quantities of work move from the US to India, both current and future IT experts will move to other jobs and not be willing to return. Which could prevent a continuation of the IT insource/outsource cycle which realisitically has existed since the 50s.
sPh
Requirements, Not Programming is key to Innovation (Score:5, Insightful)
I think there is a step before "writing" software that is easily overlooked. And that is figuring out the Requirements of the system to be designed. This is where I believe the innovation lies. A lot of good code has already been wasted chasing bad problems - unless you believe that those "objects" have found reuse elsewhere in large quantities.
The people who identify the need and then figure out the "requirements" are better off in the US as they are close to the problems there. Many offshore programmers who have never seen a scanner at a checkout of a grocery store are ill-equipped to understand all that might be required of the checkout counter in the real world. But once someone identifies what is required, then it is possible to put together a solution. The solution can be academic and the solutions depend on who has framed the problem - but the solution then is not as hard. What is hard is understanding what the problem is. Understanding what the requirements are.
Coke and Pepsi do just that. They have bottlers all over the world - and they still have been able to maintain the "secrecy" of the recipe. The point in operational excellence is that you have to not only look at the process of improving the manufacture of the product, but also its delivery and logistics. At a certain stage of his business, it is conceivable that Jean-Marc's might be like Coke/Pepsi. Outsource the chocolate production to supply worldwide.
Wrong. Most of the cost of clothing is in the inventory and predicting the fashions. Have you seen how many shirts go unsold for every shirt that you buy ? I can bet that keeping the inventory, getting rid of old fashions, and other marketing battles cost much much more than the shirt itself. The cost is mainly in the movement of information about the shirt - what is required, where is it required, when is it required, how much is required, etc. All this outweighs the cost of manufacturing at the assembly line in influencing the margins eeked out from the clothing business.
Again, I believe the first step is understanding the Requirements. Then is the design. nhen is the coding. Then is the debugging. Then is the testing. Then is the recoding. Then is the etc. etc. A lot of these steps don't need "innovation" - they require competence.
The game is about requirements. One who can understand the requirements are, and can understand that the business benefits of implementing the solutions are more than the technical costs of implementing them - is going to win. That is the real innovation.
Ignorant fallacies abound (Score:3, Informative)
The Europeans used to think Americans were all dirty farmers. This myopic thinking was as harmful to them as this thinking is to us. If there is a motivation to innovate, Indians and Chinese will step up to the plate just as North Americans would. You are not special.
Outsourcing means inefficient automation (Score:3, Interesting)
Few of the jobs are at software companies (Score:3, Insightful)
It is this large bulk of jobs going overseas as people become more and more effective at managing international projects that has me diversifying my income this year.
Where are the Case Studies (Score:3, Insightful)
Instead, the author can only present the statistics about HP and Oracle doubling their outsourcing legions. Not very encouraging...
"globalization" is not new (Score:3, Insightful)
Quite a lot longer [mit.edu] than that. Actually, the level of global economic integration is not much higher today than in 1913.
Those who fail to learn from the past (Score:3, Insightful)
I'll readily admit it. I'm old. I've been in this business for nearly thirty years. I've seen a lot of changes, but I don't want to concentrate on IT history. Instead, I want to talk televisions.
Back in the day before most slashdotters were alive, there were American companies that designed and manufactured televisions. First, manufacturing went overseas, and it was managed from the US. Next, middle management was moved because it made more sense to manage the plants using local talent than trying to do it from the US. After all, time differences, cultural difference and just plain cost was enough to justify it. What this did was educate new competitors, and mentor them so that they didn't have to suffer the pain of starting low on the learning curve. Guess what, companies like Admiral and Motorola, who were leaders in home televisions are either gone, as in the case of Admiral, or dropped the product entirely, as is the case with Motorola.
This was not necessarily a bad thing, as it ended up benefiting the consumer, and helped spread wealth overseas. However, there is no one capable of designing a TV that could compete with the imports in the US today, except for those individuals working on HDTV, which was mandated by law.
My point is that the US lost not only its ability to compete in these areas, but companies themselves. If history does repeat itself, companies like Oracle will disappear altogether, similar to Admiral, and companies like HP and Dell will change their product concentration in order to survive, similar to Motorola. The consumer will probably benefit, as computers manufactured in India or China will be cheaper, thanks to cheaper local software available for these systems. But is this technology that propelled one of the greatest economic growths ever, something we want to loose?
Innovation not key (Score:3, Insightful)
This is the new goal of business. It used to be "how can I come up with better new products and get them to market", now it's all about manipulating the market itself. I wouldn't be at all surprised it there was an MBA course entry somplace like this:
"Submissive Competition: Maintaining the impression of a competitive market by allowing small competitors. In today's intensely Government regulated business environment, market dominance is often seen as an illegal monopoly. This course will teach you how to control small competitors to keep them from threatening your dominance yet convincing regulators your market space has healthy competition and freeing your business from potentially damaging litigation and regulation."
Offshore Outsourcing friend or foe? (Score:3, Interesting)
Most of the readers and contributers see Offshore Outsourcing to much lower waged coutries a threat.
The Indian programmers in India are too busy working to read and write to this thread.
I am almost neutral as my job in Ireland relies on globalisation from the United States, but is at risk from the globalisation to India and China.
moderator privilege (Score:3, Insightful)
Then post a comment stating such, like the rest of us do. Your opinion doesn't belong attached to the story submission, even if you are Hemos.
And in the last article you put up, you saw fit to append your own insight too -- you said that Okokrim is the equivalent to the RIAA. This is simply factually untrue. The commenters who immediately corrected you got modded up -- but how come we couldn't mod your comment down?
Offshoring appeals to bean counters (Score:4, Insightful)
Offshoring makes it easier for organically-grown hack-til-works companies to keep doing it the same way. Good planning and understanding the customer is harder to recognize, harder to meausre, etc. Accountants can't track that and companies tend to ignore what they can't track. In the end it seems such companies just end up paying the user more to keep them because they are the only ones who know how to work the resulting hackware.
It looks like a mess, but it seems to be the primary development model because way too many companies do it and survive somehow. The market seems to favor swamp guides over true engineers.
Offshoring/Outsourcing .... (Score:4, Interesting)
I can be considered further biased because me and ALOT of
ppl I know have lost their jobs to it
So in the best objectivity I can muster here are some reasons
I think it is bad
1) Money sent outside the US for third world labor stays there,
thus money that used to pay ppl here, to pay taxes, to buy
food, to further employ americans in a trickle down effect is gone
2) If we were to pay US workers third world wages, and have
third world labor laws, we would be breaking US law
*** So are we gonna lower minimum wage to 50 cents/hour ???
3) If you did pay lower than minimum wage to workers, would
they all have to be sponsored by the government and go on welfare
and increase the already burgeoning working poor caste
4) The value of the dollar has been steadily falling, what are
the implications on real estate, US investments, trade ???
5) Huge layoffs create bankruptcies, repossesions, forfeitures,
and broken homes, and broken marriages . Money being one of
the top 3 reasons for divorce
6) Even with a increase recently in GDP not seen in 20 years,
little to no hiring is occuring
7) Companies that reveal their internal secrets overseas may
just find new foreign companies making their products for even
less, after the plans were just copied by former cheap labor
With no recourse thru US patent law, etc etc, they experience a
TOTAL loss of market share as the foreign government chooses to
support their own ppl
8) Unemployment figures do not count those that are no longer
eligible for checks , they are no longer considered unemployed
9) The US cannot compete equally on unequal ground, we have a
huge tax overhead, and cost of living here is too high to
compete with countries that have poor humanitarian labor laws
10) US companies are going overseas and thru negligence are
creating disasters like Bhopal in India . They act above the
law and thousands die from it
http://www.bhopal.org/
The so called race to the bottom has negative aspects that
I feel will create even more hate for the US, within and
without and there is already a sense of a Elitist class in
this country
The funny thing is they expect to be protected by some of the
poor they pay to serve in the military, but in recent polls
soldiers were ask if they would defend the rich against
an uprising of the poor, you can guess the answer
Peace,
Ex-MislTech
Outsourcing isn't all bad (Score:3, Insightful)
-If you have a rock solid spec, outsourcing is fine. You get the best price for labor, everyone is happy. Sadly a rock solid spec is a mythical creature in my experience.
-"Real" programmers over time will do just fine. During the IT boom, remember all those ads by IT training companies saying "switch careers to a lucrative IT job!". Well, alot of people went and were trained to be programmers and got positions in the industry who really aren't good programmers.
Those of us who are good at what we do and like what we're doing are well aware that a certain "type" of person makes a good programmer. Anyone who got into the business because of salaries or the promise of a cushy job really doesn't belong here. Programming is a mixture of art and science, it takes creativity, a desire to explore and expand your boundries, and a logical mind. It's definately not a 9-5 job, you need to have a passion for it!
Outsourcing is the latest thing, there's going to be some casualties of good programming talent until the market stabalizes and companies figure out what does and doesn't work. In the meantime, we will see less people entering the field who shouldn't be here, and also many less experienced (and less "suitable") people changing careers out of IT. Toss in the demographic loss of the baby boomers starting to hit retirement age and you have the formula for solid demand for good programmers.
long term trend (Score:5, Insightful)
It's really not that different from what happened in the electronics industry after all: initially, parts came from Japan, then whole devices, and now the companies themselves are Japanese. And it was the same with cars and computer hardware.
What should the US do? There is really only one choice: if it wants to retain its strong economic position, the US needs to start the next revolution in a different field. Maybe that's biotech, nanotechnology (whatever that is) or the commercialization of space. But anybody who wants to claim a leadership position can't lean back and say "we'd just like to lean back for a while and relax on the strength of the jobs we already created".
Re:Information Technology Is a Commodity. (Score:3, Insightful)
Re:I just dont get it.... (Score:3, Interesting)
Obviously you have been misled by the true nature of capitalism. Capit