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Overseas Outsourcing...

Am I the only one scared shitless by the mounting wave of overseas exporting of IT services?
http://zdnet.com.com/2100-1106-976828.html

My career is only a year and a half young and I'm wondering what kind of future I'll have in the IT field in lets say 10 years.  I'm starting to get the uneasy feeling not unlike that of an american factory worker as jobs are shipped to Mexico & Oversears.

Opinions?

GiorgioG
Tuesday, December 17, 2002

Quit that, you'll just trigger another flamewar. :P  This subject always brings a wave of fear, and it just goes nowhere.  Do you have anything interesting and new to say about this subject?

anon
Tuesday, December 17, 2002

See previous threads on programming vs. software development.  The latter is much harder to outsource overseas.

Be realistic.  How much software can be created by saying, "here's the spec, which has been thought out completely in every conceivable aspect.  here's $100,000.  I expect to download a binary in 6 months, after which we'll never speak again."  Obviously, this is a gross generalization and isn't meant to be taken literally, but it illustrates the illusion of outsourcing.

Most jobs are boring, enterprise app type stuff that require domain knowledge.  I could see, perhaps, hiring a full-time foreign employee and making her work night-sihft.  Basically someone who telecommutes from India.

Outsourcing unspeced projects to companies you know little about?  Fear not the reaper.

I've heard you can get a competant Indian engineer for $25K/yr total cost.  An competant American engineer costs about $100K/yr total.  So, it's about 4x.  Sounds like a lot, but seeing as how you're giving up frictionless communication, domain knowledge, time-zone differences, team integrity (at least locally, you might have a hunch that your star programmer is leaving), accountability to product success, etc.  If it was 20x, maybe, but 4x is barely enough to justify the bother in many instances.  And besides, how many 15 year "in the trenches" vets (the kind that really understand how to drive software development) are you going to find in a country where the tech renaissance is fairly new?

I predict many will fall for the outsourcing temptress, but most will be unsatisfied.  Hiring American developers is more palitable now that our egos have taken a well-deserved beating.

Bill Carlson
Tuesday, December 17, 2002

Yes anon,

Don't lets try to do anything about this. Let's all just remain quiet and docile and maybe they won't hurt us. Or if they are going to execute any of us we can hope that they will go for the noisy troublemakers and the weak and unskilled first. Just be very very quiet...

Sarain H.
Tuesday, December 17, 2002

Ok, I'll bite.  Overseas outsourcing will be a partial failure.  Resourceful people as usual will make it work ok, but occasionally they'll be prodded to do it against their judgement and opinion will swing to and fro as some Bob on Software blames it as the culprit behind some failures.

On the upside, people will be able to telecommute more.  We'll be more sophisticated in dealing with telecommuting, and find cost savings in teams of students or anyone else who has found a way to live cheaply.

The fears are fairly overblown since, if the sky had actually been falling ever since some American got angry about shpping jobs abroad, we'd have 115% unemployment right now.

Tj
Tuesday, December 17, 2002

Anon is right, there isn't really anything new to say about this. However, that won't stop me from posting.

If you already feel you are going to be a victim of outsourcing at age 22 or whatever, you most likely WILL be outsourced at some point. Most work in software is akin to being day labor at a construction site, and any work like that ultimately ends up going to the lowest bidder.

My advice is to get out while you are still young and able to do something worthwhile with your life. ;-)

H1B
Wednesday, December 18, 2002

Some guesses about the near future

1- jobs leaving as programmers, are usually partially replaced by mgmt, qa, techwriters

2- As the need for u.s. programmers declines, entries into the field will decline. There will be an equiliibrium eventually (much like with mechanical engineers)

3- Outsourcing labour will eventually kill a lot of large software companies, because it will give many small,lean,efficient teams who can build v1, access to the cheap labor, support, admins they need to make their company grow after  v1 ships!

4- In the long run only large corporations will outsource, as it is just not woth it for medium Lets say (1000000-2000000
it shops) to outsource.

Daniel Shchyokin
Wednesday, December 18, 2002

This will be like dot com all over again. More and more MBA-trained managers will jump on the latest trend, seeking to save money by offshore outsourcing.

However offshore outsourcing doesn't value-add to development, and by about 2004 this will be obvious even to business managers, so there will be correction the other way. Companies that outsource too much will die.

By the way, I disagree with Daniel that outsourcing will kill large software companies. Most large development companies are run by non-software people. Those companies will simply use offshore labour. They're doing it already. It is actually the lean, efficient, small teams that will die from offshore outsourcing.

The challenge for good software people is to hold out for their true worth when the correction sets in.

Must be a manager
Wednesday, December 18, 2002

Outsourcing overseas doesn't make sense for small to medium businesses. The overhead of managing staff that are quite a few timezones away will not work on small teams. If you are a 50-strong developement team, having 20 programmers in India will be hard to manage.

If you're Oracle, your thousands of Indian employees are already well integrated. You can split the work more intelligently (like have all of a specific module done in India while say, the core is in Redwood City.)

I'll be the first to admit that I've never done work related to things like R/3 and other Peoplesoft and what not. Maybe those things are much easier to spec and have done overseas?

Maybe more scary would be having the developers be in Canada (for the U.S. at least) where the language barrier isn't (eh?) and the timezone difference doesn't exist. But even then, there's a minimum size where it might make sense. You need to have efficient means of managing your various sites.

Alex
Wednesday, December 18, 2002

I had to deal with outsourcing in 1989.  At the time, my employer (a small consulting firm) was doing some project work for a well-known corporation based in California.  This un-named corporation had a second team working on this project in China.  Chinese programmers tried to call me each and every day for a week straight and each time they did I would hang up on them because I didn't speak Chinese.  Eventually, they gave up trying to reach me. :)

Nowadays, there are plenty of Chinese [fill in whatever nationality you want here] programmers who can speak and write in English.

Thanks to the Internet and high-speed communication -- outsourcing will continue to grow by leaps and bounds in the next few years.  Why?  Because this is what the executive managers at large companies and multi-national firms want.

Sticking just to computer programming work (as opposed to call center work, etc.) the areas where outsourcing will probably see the most growth are:

* Commercial software development.  Sun and Microsoft for example are currently recruiting and hiring in places, such as, India, Mexico, the Phillipines, etc. 

* Application outsourcing (maintenance).  Many large consulting firms (EDS, HP, Keane, etc.) are moving more and more jobs and work overseas.  Btw, some of this work is being done at near shore (i.e. Canada) locations as well.

* Business development.  Programmers in far away countries can be doing work while their counterparts in the U.S. are sleeping.  Also, progress can be tracked via the World Wide Web.

Corporate welfare programs (i.e. the H-1B visa program) along with the outsourcing of work will mean that even if the IT industry suddenly turned around next year many programmers living in the industrialized countries (U.S., Great Britain, Germany, etc.) throughout the world will not be allowed to participate.

one programmer's opinion
Wednesday, December 18, 2002

Signs you are about to be replaced by an overseas programmer:

1. You hardly ever met a client face to face
2. You spent less than 10% of your time in face to face meetings with your lead/manager
3. Your cost to the company is more than 100% higher than that of a potential overseas collegue

More signs anyone?

Just me (Sir to you)
Wednesday, December 18, 2002

Hmmm more signs could be...

You write to specific requirements using a well defined set of tools, to a strict style and using an authorised cook book.

Email is the principal means of disseminating information in your group.

Simon Lucy
Wednesday, December 18, 2002

As a displaced IT worker, all I can say is this.

If your still employed, you probably are not worried about this topic and come up with several rationale reasons why it's not a big deal.

When you become unemployed and you sit in front of your terminal like an expectant father waiting for recruiters and businesses to call after submitting hundreds of resume.

There is no sector of IT development from SW developer to Web Developer to your basic Access office hound that can't be done overseas for a far cheaper rate.

If your young and still in school, consider a secondary major or minor in something not involved with technology.
Please, do yourself a favor.

ZETM99
Wednesday, December 18, 2002

If the foreign developers are able to produce code of a similar quality as domestic developers, and are less expensive, I would support using foreign developers.

The problem is, it's not that simple, as several people here have excellently explained.

Here's my own experience:  At my last job, we were developing a completely new enterprise application.  We outsourced a fair amount of development to an Indian company (e.g., from India).  We were well-funded, we chose chunks of the system that were as self-contained as possible, and we had no significant problems making ourselves understood.

But any time they had a problem, they'd have to shoot us an e-mail with a twelve-hour time differential.  We wouldn't get the e-mail until we got in to work the next morning, and after replying, they wouldn't receive it until they got into work.  So all correspondence was delayed by one full day.

Also, communication was quite simply difficult, in terms of telling them everything that they needed to know.  We would fail to tell them about some little gotcha, and they undoubtedly failed to tell us about some little code smells that we would have recognized and could have saved them a lot of debugging time.

Plus, when you don't work with someone, it's not *satisfying*.  You're taking a significant amount of your development work -- your job -- and giving it to an e-mail address.  Since there's very little personal connection with the other group, it's hard to feel enthused about their work, and easy to get frustrated with it.

So, my prediction is that overseas outsourcing will become more widespread, but massively, and it won't be a magic bullet.  It'll become a useful tool.

Brent P. Newhall
Wednesday, December 18, 2002

Oops.  I meant "more widespread, but NOT massively."  Sorry.

Brent P. Newhall
Wednesday, December 18, 2002

In another context Philip Greenspun talked about why he entered MIT. He said that in the seventies the real draw was having to play with cool tools. However by the end of the eighties that was no longer so, since the main tools involved in Computer Science were a pen, notepad and blackboard with intermittent access to a computer terminal.

The reason I mention this is because the low technological expenditure necessary for the studying for computer programming, plus the use of English as a second language in India, the Philipines and Malayasia, is the main reason there are so many computer programmers, above all in the former.

After all, think of the number of your colleagues who learned programming with no more than a few books and a not very expensive PC.

On the other hand the USA, and now Western Europe also, have the latest and greatest hardware nearly everywhere. So, when I go to hire a sysadmin or two from India, I know the greatest problem we are going to have is that the guys won't  have had too much experience with the latest hardware, or have spent years checking things out on the net as a matter of course, because even in cash terms both of those things in India are incredibly expensive compared to the US. I can hire two and a half sysadmins from India for the price of one from the US or UK, but the UK one will still work out cheaper. Of course after a year or two woth the hardware and software, the Indian is going to be as good as the Westerner would have been for most things.

With programming the problem the Indian will have is that of putting himself in the place of the end user. The mother college I work at is designing an "Intranet". The guy in charge, who's pretty good was asking my opinion yesterday and was saying they had done a demo, and were now going to choose somebody from each department for training by Microsoft. I told him he was going about it the wrong way. What he should do was start off by asking what a sample user would want to do, and then build the functionality around that so that there is no need for training. Another Indian, again a perfectly reasonable guy, was talking to me a year and a half ago about the college database system they were building. I told him to keep sending it back to the users committee for testing, because they would find that they would have missed things out in the specification. "Oh, No!" was the reply, we've got all the chairmen to sign the specification.

So, if your job involves being on site, having experience with the latest hardware or software, or needing to design for the user, then you are going to be safe. If your job is a cog in the wheel of a large coding machine, then be a little worried.

One thing that will definitely happen I think, is that whole operations may go over to India. If you are talking about tens of millions of dollars for a system for a bank, then it's not going to be housing all its developers in Manhattan. So there will be little difference in having its development in Bangalore instead of San Diego.

Another thing to consider is that globalization will create one market for excellence. The example of translations is a good one. For some considerable time now the owners of translation agencies have been sending their translations over the net; often they neither know nor care in what country the translator is located. All they know is that he is good. And far from cutting the price this has actually allowed the top translators to charge more, since they are no longer competing just in the local market.

So, all told, plenty of different factors are coming into play here.

My advice. Don't think of it. Do your job if you enjoy it and learn the most you can about it. Then if true globalization occurs you will be one of the top players, and able to take advantage of it.

Stephen Jones
Wednesday, December 18, 2002

The Indian press is saying they expect to see 3.3M jobs off-shored from the USA to India by 2015.  One wonders how many that actually works out to per year, but...

jgo
Wednesday, December 18, 2002

Overseas outsourcing to 3-rd party companies is not good in the long run. However, some US companies do have their own dev centers in other countries - like Microsoft in Israel, India; Oracle in India. These centers have full ownership of a particular set of modules and are responsible for them. However, with the 3-rd party companies its a contract and responsibility as such may not be there.
One of my Indian friends was telling me that most of the good engineers hardly work for companies which do outsourced jobs. And a good percentage of the good engineers are already working in the US. So, outsourcing almost everything may not be a good idea in the long run. Outsourcing maintenace work seems to be a good idea since you need not spend so much on a legacy product/an existing application.

Bob
Wednesday, December 18, 2002

I am a pretty skilled guy and I am not stupid -- I can see the writing on the wall as well as anyone else and want to get prepared. The facts are that salaries are going down, unemployment is increasing and jobs are going overseas. now I really like developing so I don't want to give it up but I can see that, given the cost of living here Washington state at least, that I need to get myself into a situation in which I am able to have a higher standard of living than I do now. I'm tired of being "well paid so what are you complaining about" and yet having to rent and drive an old car. The car is OK i'm not pretentious but I'd like to be able to knock out a wall if I want to and put in built-in shelves and all that stuff that's part of the American dream.

Anyway, some friends of mine did the 'escape from America routine" and emigrated to Australia a few years ago but they tell me that things are pretty much the same down there.

I've got it in my head that if I could move to India or someplace like that where the ratio of wages to cost of living is better, I'd be better off and have better job security and also have fun being an expat. Shoot - maybe I'd even have a cook and a maid! And if be girlfriend doesn't want to move with me well hey I'll just find some gorgeous exotic native women and make all my friends back home insanely jealous. Plus, I'll have that seby american accent on top of my 'gangsta' look -- i'll get invited to all the best parties.

So how does this work? Can it be done? Are there countries where things are better or are we fooling ourselves and we have it as good as it gets right here? Don't get me wrong - I think this is the best country on earth, but I'm adventurous and I like my career a lot but I just don't see much of a future for it here. I don't buy a lot of junk so I won't need a western sized salary to buy toys. Having a decent place to live, transportation, a bit of culture, good food, job stability and some time to enjoy myself would be really great and I'm willing to move if necessary to find it.

Sarain H.
Wednesday, December 18, 2002

You'd get your maid and cook in India with no problem; servants are one of the few things that are cheap. Real estate in terms of square metres is also cheap.

However I doubt if you would last more than a month or two. You would find the simple things just too complicated. You'd get annoyed when you can't do any work for a couple of days because the power goes off, and nobody can even tell you why. You'd get a cycle rickshaw to go somewhere and find the guy would spend hours taking you somewhere else because he wants to get commission from wherever he has decided to take you to.

Then who would you be working for? If you are seconded from a US company then great; they would probably arrange things so that many of the problems I mention above don't impinge on you. However if you are thinking of working for an Indian company, ask yourself why so many (nearly all?) of the top Indian programmers are looking for jobs in the UK or the States.

Some people manage fine. Woody Leonhardt, who runs the hugely successful Woody's Office watch, has been living in Thailand for the last couple of years, but he's working for nobody but himself, and as he worked in Aramco in Saudi many years ago he is used to living abroad. The German translator of Leonard Wolf and the Bloomsbury group was living in a hotel in Colombo in 1996, and seemed to be enjoying himself (though he wasn't there a couple of years later). Both these people however are not dependant on the local market for work, but rather are getting it from contacts developed over many years.

There is a basic rule about salaries and cost of living. If the cost of living is cheap it's because salaries are so low that nobody can afford to pay more.

Also remember that in third world countries consumer goods are expensive. A computer in India will cost you nearly double what it would cost in the States. And to go any distance you would have to fly on expensive lousy internal airlines - and that's in the unlikely event that there is a plane going where you want to go.

And as for dating, outside of Bombay (and despite its veneer of modernity even there) forget it.

Take a year off and tour India. You'll have time to get used to it, get the obligatory diarrohea out of your system, and as you won't be in a hurry you won't get ripped off.

Stephen Jones
Wednesday, December 18, 2002

First up I'm in Australia and I'll confirm that the job market here is tough tough tough. We advertised for a tester and had a huge number of respondents. One of the reasons for things being tough here is - supposedly - a lot of US firms invested in the Australian market during the dot com years (good size test market, good focal point for Asia-Pacific operations, a lot of cultural similarities, favourable exchange rates) and when things started getting tough these same US firms pulled out of their investments and closed up shop here (whilst still retaining US operations). Also enrollment from Australian students in IT courses is now down sharply - although foreign students numbers studying IT courses in Australia remain steady.

From my perspective, outsourcing critical custom applications can be a very bad idea - you have so little control over the outsourcer's quality of output, hiring decisions, etc. What's more the outsourcer is aiming to make a profit from you and has to incur additional overhead (admin staff, consulting you to ask you what you know/want, etc) meaning that the cost of an outsourcer developing an application can easily outweigh the cost of developing a product inhouse. Furthermore outsourcers probably don't know your corporate culture, business aims, etc and are probably less likely to be interested in those aims than your internal staff (therefore may take longer - time == money - to understand your requirements). On top of that, this kind of software development doesn't really benefit from economies of scale in the same way as traditional manufacturing processes.

As a slightly related example, my mum works for a legal firm and they used to have 1 do-it-all IT guy who had all their systems running smoothly (including phone, etc). He left and the firm decided to "outsource to save money". The result - last month they paid over $100k in fees (i.e. more than the previous guy made in a year) to their outsourcer AND their systems are in a state of general disarray - less quality, significantly more cost.

The decision to outsource is often based on the fact that it will save money, but often these savings are never realised, particularly because outsourcers are addicted to constant revenue streams - their aim is not to solve your business problems, it is to constantly generate money from you.

My opinion is that a lot of it comes down to good hiring policies. If you hire smart internally you can get the job done inhouse for less money and probably produce better quality  (nb. when I say inhouse I don't necessarily mean full-time hires, I'd suggest a team of full-timers and contractors). The obvious problem here is that there are some very well documented and discussed shortcomings with the whole hiring process in IT, but again mostly this comes down to penny smartness and pound foolishness - truely experienced developers are underappreciated, low cost labour is too popular.

The biggest problem I see with this current market "correction" is that there doesn't seem to be much evidence of a correction in several areas that still need to be addressed - there seems to be no critical evaluation (at least in the business community) of what went wrong, it's all "software is bad", "the web is a waste of time/money", "move along", instead of "we [all] made a mistake - this is a lot harder than we realised, but tremendous benefits can still be gained from well designed/thought out software". I see that - the industrys' "playing ostritch" - as the bigger threat to the American/Australian/UK/wherever programmer than Indian outsourcing.

Walter Rumsby
Wednesday, December 18, 2002

Below, is a post that was made at the OpenIT forum in the Political Issues forum

Subject: Germany's court blocks immigration law sought by industry

I didn't provide an article link. If interested, just use Google and the following search words to find an article to read -- immigration law germany

Quote:
----------------------------------------------------------------------------
Germany's supreme court Wednesday blocked a landmark immigration law designed to bring in skilled workers wanted by industry....
...The government says the law will help Germany's ailing economy by meeting a shortfall of specialists such as computer programmers, while speeding up processing of asylum applications and pressing newcomers to integrate."
----------------------------------------------------------------------------

Translation: Government officials are trying to pass this bill because industry leaders gave them a lot of money.

Germany's economy is ailing because over 4 million people are out of work.


Wednesday, December 18, 2002

"Germany's economy is ailing because over 4 million people are out of work."

No, 4 million people are out of work because Germany's economy is ailing.

And I thought programmers were logical!

Schroeder's government can hardly be considered the favourite of German Industry (except possibly for the not inconsiderable chunk of it owned by the Unions). Most of German Industry is threatening to leave Germany altogether unless he changes his policies.

The Surpeme Court threw out the bill on procedural grounds, but the opposition from the conservative parties is basically racist (they don't want Indians - and surprisngly enough most Indians actually don't want to go to Germany).

It is doubtful if the vacancies in IT still exist. A fair number of Brits appear to be leaving Germany because the work is drying up.

However in the mid-term a relaxation of controls is necessary. If you have twenty unemployed machinists you're not going to give them work by refusing a visa to somebody to run the company's IT structure. In fact you're simply making it more difficult for the company to expand and create jobs for the other people.

National unemployment figures are too often simply crutches for demagogy. It doesn't matter how many people are unemployed if they are not with the right skills and in the right place.

Stephen Jones
Wednesday, December 18, 2002

Sarain,

I am sure you have heard of Infosys. Here is a link to their website, which has information for people visiting India.

http://www.infy.com/indiaonline/default.asp

Personally, I would suggest that you visit any place you would like to stay for more than 2 years, before making your decsion.

Like going to all the school's in your list before you make a decision on where to go!

Prakash S
Wednesday, December 18, 2002

Anonymous, might some of the economic problems have come from East Germany?  Or the big flood that resulted in 7 billion Euros of damage?

I'm aware of companies that have excess work here.  One thing is IBM seemed to advise the German gov't that they should only offer greencards to workers who make over DM100k.  Further, the bureaucracy is daunting to most; there are a lot of catch-22s.

If you think the US should follow Germany's lead, would you also agree to the socialism?

Tj
Wednesday, December 18, 2002

Managers (and people in general, for that matter) tend to be bandwagon-oriented, so there probably will soon be a big boom in offshore outsourcing, just like there was a dotcom boom. Everybody was starting an Internet company, and established companies were doing all sorts of things on the web because they thought they would automagically save or make tons of money.  Similarly, companies are increasingly jumping on the offshore bandwagon, thinking it will automagically save them tons of money.

After a while, reality will set in and they'll realize they aren't really saving anything and are spending more money and/or taking more time in many cases.  Then instead of indiscriminately sending everything overseas, they'll get a grasp on what makes sense to do offshore, and what makes sense to keep in-house, and scale it back to a sensible and sustainable level - just as they have now scaled back Internet operations to a sensible level.  When that happens, the tables will turn and there will be a glut of offshore programmers who are crying for jobs!

Also, by that time, so many US programmers would have already left the field and very few US students will be interested in studying Computer Science or related majors, that there will once again be a shortage of US programmers, which will drive up salaries, and will allow anybody who can spell Java (or whatever language is the flavor of the day) to get a programming job, and the boom-bust cycle starts again.

That's the circle of life.

T. Norman
Thursday, December 19, 2002

"and will allow anybody who can spell Java (or whatever language is the flavor of the day) to get a programming job"

of course the rule that you will have to be under 30 will still apply ;-)

Just me (Sir to you)
Friday, December 20, 2002

Well, it was very interesting to read your thoughts about our industry...I worked for one of the largest Russian outsourcing companies.
There is my opinion:
when it comes to the smart coding, high performance and etc, Indians are kids against Russian programmers, and let`s not discuss usual American developers skills:)...so a lot of companies start outsourcing because of skills level, not because of the price.
The price situation is not as simple as the difference between rates in Russia and US - in fact, I can estimate 25-35% savings, not more, if we talk about $20-$25 per hour developers
(and if we talk about developers below $20...you can expect low quality code and bigger time spent reports, which results in additional costs, not savings...)

But! I think that it`s impossible to replace all domestic programmers, because my experience shows that if we talk about products, not just custom coding, the hourly rate isn`t a main factor. You`ll spend more money on marketing, sales, etc
Also, commercial code quality can`t be always measured by it`s performance, sometimes you just need to follow the standards as strictly as possible (Russians don`t like standards at all:), and US and UK are good in commercial programming.
Also, there will be always a large amount of work to be done onsite.

Slava
Friday, December 20, 2002

Yes, Slava, you and I are aware of the reality that outsourcing won't lead to cost savings in most cases.  But management doesn't know or care, and they are the ones making the decisions.  They just want to be able to send something out and claim that they saved $X, and they will twist the figures to show that they saved $X, even if the reality is that it cost MORE overall due to the communication overheads, or because the delivered system didn't satisfy the user's needs as a result of the communication gaps, or the system is costly to modify for future needs because it was slapped together sloppily and quickly by the lowest bidder.

T. Norman
Friday, December 20, 2002

One funny(?) story about outsourcing. We had a client that wanted us to create a lot of products, so we worked on them...and once upon a time the client decided that they need to have their own developers on-site.
Ok, they hired these guys, and told us that we`ll have multi-national team on one of our projects. We had a StarTeam for version control, both sides had access to it, so US team and Russians worked on the same program. (Luckily i wasn`t working on this project:)
From this moment guys from other projects had a lot of fun: every morning our russian part of the team looked into STeam to see the new code (and BUGS, lots of them!) made by their American teammates, and to shout out lots of #$^&^$^**%* 4^  W@T^$%^ words:)
Then they had to fix the bugs, rewrite the code and so on-until next morning. No wonder that the project missed the deadline and failed.

Well, that was yr2000, when everyone who knew how to type, was considered a web-programmer in US:)
No offence meant:)

Slava
Friday, December 20, 2002

2T.Norman:
>"or the system is costly to modify for future needs because it was slapped together sloppily and quickly by the lowest bidder. "
Agree!
Well, I`ll tell you more about this -about these lower bidders...What really impresses me in US and EU clients - that they truly believe that something which costs $100000 being built by major offshore companies, may cost $10000 if purchased from lowest bidder....
Do they really think that the guys who will work so cheap will not give the code away to everyone who will pay $$?
Do they think that anyone took care about good application and database design for this price?
If somebody will try to sell you a 2002 Mercedes for half-price, didn`t you decide that the car is stolen? So why do these guys think that it isn`t a stolen/bad code when it is offered for 1/10 of normal price?

Well, may be they really take it just to yell about cost savings...

Slava
Friday, December 20, 2002

Have to go home...
Just a resume from a Russian outsourcer:)
- It`s impossible outsource all programming jobs.
- Outsourcing doesn`t mean big cost savings
- Outsourcing doesn`t bring great success everytime

There is a big IF.
IF you outsource the work to the RIGHT Russian (i can speak only about Russian companies, I never worked in India), you`ll save about 25-35% of the project costs AND you`ll have a better/faster code.
IF you outsource the work RIGHT - i.e. have the good manager/managers onsite, choose a good company in Russia (not the cheapest one), work with them CLOSELY on specs, and stay in touch with the company and the people you work with and with their business - and only IF you manage to do it - you`ll manage to benefit from outsourcing.
It`s more complex than expected.

Good luck:)

Slava
Friday, December 20, 2002

NYSE Outsourcing To India's Wipro Technologies

Budget-bled Execs Are Looking East ... Way East
December 13, 2002

http://www.informationweek.com/story/IWK20021213S0038

<snipped from article>
U.S. businesses can trim 30% to 40% of a task's labor costs by contracting overseas, says Forrester Research director John McCarthy.  Many Indian firms adhere to strict process controls that can be more stringent than U.S. standards.  "This isn't like manufacturing, where companies had to trade off quality to get lower costs," McCarthy says.


Saturday, December 21, 2002

"Many Indian firms adhere to strict process controls that can be more stringent than U.S. standards.  "This isn't like manufacturing, where companies had to trade off quality to get lower costs," McCarthy says"

Boy some people just don't get it! The process controls are more stringent but what about the product? Unlike the case in manufacturing, adhering to process controls in software development, does not give the minimum guarantee as to the quality of what comes out of that process.

Indians often use process controls to paralyze everything. I once had to write a paper attendance list for a set of training students we had. The paper forms we were given looked horrible, and nobody could give me a copy anyway because the company (a multi-billion dollar steel plant) hadn't set the training department up with email, and they had taken out all floppy drives from the machines using a screwdriver to stop virus propagation. I did a quick copy of the form in Word, using a color logo for the company instead of black and white and making the lines larger so you could put the names inside them.

All the lists came back. Non ISO 9000 compliant! Note, that the forms were the same, the fields and info were the same, it was just that the lines were big enough to write between and read what was written afterwards.

And then there is the railway timetable. There is one train in India that has never ever been on time since Independence. The delays vary between eleven hours and seven days, with an  average of 48 hours . Yet nobody has ever thought of changing the time table to something more realistic.  Mind you most software projects the world over are the same :)

Stephen Jones
Sunday, December 22, 2002

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