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"Jobs are moving off-shore"

I've read numerous posts on this site about professionals cribbing about losing jobs or fearing the same since most technology projects are moving off-shore. I personally feel that a good IT professional shouldn't fear of this situation but he/she should instead fight back - here's how ...

Globalization is coming to technology, and with it, jobs are moving off-shore. Instead of fearing the change, Matthew Heusser suggests some ways of learning to roll with it; Ways to stay ahead despite increasing competition.

Full Article: http://www.angrycoder.com/article.aspx?cid=6&y=2003&m=7&d=31

Just thought of sharing the article with you guys. Infact, there's a reference to Joel (and this site) in the article.

EastIndian
Thursday, August 07, 2003

The article you linked to is very interesting.

It does, indeed, list a few interesting ways in which programmers in the US can differentiate themselves from remote programmers in East Europe, India and China.

However, many points can be applied just as easily by  programmers in East Europe, India and China (which I will name "outsourcing countries" bellow).


For example, there are some points about giving the customers quality.

The software firms in the outsourcing countries can write quality software as easily as the US firms do.  We are not stupid, you know. :)


For some people, remote software development means low quality development.

This often happens because the clients push us a lot about saving money.

Typical example:

For example, let's say a client wants a project done. An american company quotes $100,000. My company in East Europe may quote $30,000, because of the lower costs of work.

But then, the client keeps pushing and pushing and pushing us to lower the price, and we agree to do it for $12,000.

The only way we can do it for this sum is by sacrificing quality.

It happened a few times to our company, and I heard from others it is a widespread problem in other companies, too.

Now we simply refuse the project if the client wants to push the cost bellow a certain number.

A software developer in Eastern Europe
Thursday, August 07, 2003


Also, another point I would like to make it is that US programmers can compete successfully with the East Europe programmers by becoming domain experts.

If you work for the X industry, learn everything you can about how the X industry works.

This way, a programmer in East Europe or India simply can not replace you.

The industry in East Europe and India is VERY different from the industry in the US: in the US, there are more large companies, accounting is different, business practice is different, automation is applied differently, etc - lots of small diferences.

It is very hard for a programmer in East Europe to even get a glimpse of how a certain industry works in the US.


Also, learn to be a good analyst, to talk to the customer and write a good requirements document yourself.

This is very hard to do remotely.

A software developer in Eastern Europe
Thursday, August 07, 2003

Excuse me, but I'm very tired! :-(

In the phrase:

... business practice is different, automation is applied differently, etc - lots of small diferences.

I wanted to write "lots of LARGE difference".

Indeed, there are lots of large differences between how US and East Europe / India businesses operate.

A software developer in Eastern Europe
Thursday, August 07, 2003

Outsourcing has become such a hyped-up management fad that corporations have come to believe that if they do it they will automagically save money.  That's the problem -- even if you differentiate yourself as an American developer, they don't care because they are so caught up in the offshore bandwagon.

The result is likely to be that the majority of companies doing it won't make any net savings -- so neither the shareholders, customers, or employees derive any benefit.

T. Norman
Thursday, August 07, 2003

> Outsourcing has become such a hyped-up
> management fad that corporations have
> come to believe that if they ...

From the point of view of the outsider, the US society seems very much "hype-driven", so to speak.

The hype seems to mean quite a lot.

I really don't understand why people don't emphasise rational decision, instead of "go with the hype" decisions.


> The result is likely to be that the majority of
> companies doing it won't make any net
> savings -- so neither the shareholders,
> customers, or employees derive any benefit.

Now, that is simply not true. US programmers don't like it, but there are very real savings to be made by oursourcing programming work.

My point in the messages above was: if a company asks for $10,000 to do a job, it's ok to negociate, but, negociate up to $9,000, or something, don't try to get the thing done for $2,000.

If you try to get the thing done for $2,000, it will be pure crap.

A software developer in Eastern Europe
Thursday, August 07, 2003

There are savings to be made, but not for the majority of companies who are doing it. Just as there are profits to be made on the Internet, but not for the majority of people who jumped into it.

Without the management skill on the US side and projects of a certain nature, net savings are unlikely.  Some (probably MOST) US companies don't have much skill when it comes to documenting requirements and managing the interactions with the vendor.  Others have projects where developing the software requires a lot of company-specific domain knowledge and frequent whiteboard discussions with the users.

T. Norman
Thursday, August 07, 2003

T. Norman has it right. There is so much in software development that involves being face to face with the user.
It would be very interesting to find the mean and median of places where programmers work and how large the groups are that interact with users. If it is small, and it may well be, then moving much programming work off-shore is going to be very difficult. For really large shops it may make sense if user requirements are well defined and the overhead of communication and travel can be reduced.

Pedro the programmer
Thursday, August 07, 2003

I distrust such reasoning (that outsourcing=bad) because large companies will have to learn how to use this tool eventually, and it's a good time to stake out contacts and relationshps abroad.  Especially if you consider that this increases their foreign political pull.

Sure, one can easily point out early failures, but weren't the first couple versions of Internet Explorer failures of Microsoft's?  Change is always uncertain and for many companies it loses money.  That doesn't mean it's intrinsically a bad strategy.

peter f.
Thursday, August 07, 2003

Outsourcing is a tool. And just like any new tool (web services, XML, Java, databases, etc) the initial reaction by big business is that today's new tool is a hammer and every single problem they have is a nail. If your company is in financial dire straits due to bad management and poor business decisions then outsourcing is not going to save you.

And, of course, failures like those will then become "outsourcing destroyed this company"

Philo

Philo
Thursday, August 07, 2003

The demand for software is not going to remain constant.  In the near future, the demand will far outstrip the supply of developers in the entire world.  There will be enough work for all of us and much, much more. 

Let's face it, offshore outsourcing is another idiotic management fad.

anon
Thursday, August 07, 2003

anon,

Very interesting observation, and I agree with your conclusion, but is the premise true? What leads you to say that demand for software developers is going to increase so dramatically?

JbR
Thursday, August 07, 2003

Well *someone* has to build Skynet. We're already behind...

Philo

Philo
Thursday, August 07, 2003

it's probably some manager's fault for understaffing...

JbR
Thursday, August 07, 2003

"The demand for software is not going to remain constant..." 

The demand for computer games and other types of commercial software may not remain constant, but at most large non-technology related corporations, a large percentage of their IT budget has always been soaked up by maintenance of existing software applications/systems.

Companies will continue to look at utilizing offshore software development resources even when the economy becomes stronger simply because there is a potential for cost savings.

What scares me is not only the lack of available jobs out there, but where many of the semi well-paying U.S. IT jobs are concentrating themselves.  I write and maintain business applications for a living and don't want to work for Accenture (a consulting firm) or Aerotek (a staffing firm) as one of their throw-away employees.


Thursday, August 07, 2003

"I really don't understand why people don't emphasise rational decision, instead of "go with the hype" decisions."

Because the rational people are more than willing to let their competitors buy into the loud hype, while they quietly prosper from their rational decisions :).

Jim Rankin
Thursday, August 07, 2003

I've got to agree that offshore programmers aren't the threat. I'm a bit short on work at the moment, but it isn't because my customers are getting the job done for less elsewhere.  It's because people are still cutting way back on technology investments, and I'm not selling myself correctly.  Fix either of those problems and I'll be golden.

Clay Dowling
Thursday, August 07, 2003

I'd hate to be an off-shore programmer... programming from a little dingie adrift at sea...  or are they all crowded onto the Sealand platform?

http://news.bbc.co.uk/2/hi/science/nature/2115887.stm

<g>

Robert Jacobson
Thursday, August 07, 2003

Doesn't increasing global wealth and technical literacy lead to a bigger pie for everybody to chew on? 

India and China getting a class of wealthy tech-literates should be exciting for the old guard not depressing. 

Disposable cash = consumption of disposable ideas and the US is the undisputed king of selling these ideas to the rest of us.

not required
Thursday, August 07, 2003

>"Doesn't increasing global wealth and technical literacy lead to a bigger pie for everybody to chew on?"

Yes, if global wealth is actually increased.  Outsourcing to somewhere that charges half as much but takes more than twice as many man-hours to get the job done (when also counting the added communication effort from the US side) is a net wealth destruction, not creation.

T. Norman
Thursday, August 07, 2003

>"I distrust such reasoning (that outsourcing=bad) because large companies will have to learn how to use this tool eventually, and it's a good time to stake out contacts and relationshps abroad."

Outsourcing is not intrinsically bad or good.  To jump on bandwagons without keeping your eyes open for the pitfalls is what is intrinsically bad.

When reading or seeing interviews of company officers who have done major outsourcing, they keeping saying that the cost savings are *so compelling* that they *had* to do it.  Or that everybody else is doing it, so they have to do it too or get left behind.  They will shout that American salaries are 5X - 10X Indian salaries, without any words about the comparative overall costs which aren't as good (more like 2X, not 5X) or the hidden costs like communication delays and lack of face-to-face time.

Outsourcing has *potential* for savings, but those savings are not as great, as widespread, or as easy to come by as the hype would suggest.

T. Norman
Thursday, August 07, 2003

Companies that lay off people to outsource (domestically or overseas) often forget another basic concept: contractors can say "no"

I've seen a company get caught flat when their contractor was too busy to handle their work. It was fun. :-)

Philo

Philo
Thursday, August 07, 2003

This whole discussion reminds me of the future predicted in Neal Stephenson's novel Snow Crash - "the Invisible Hand has taken historical inequities and smeared them out into
a broad global layer of what a Pakistani bricklayer would consider to be prosperity".

Selfishly, I have to consider this a bad thing. Looking at the world as a whole, maybe it's for the best. Obviously this assumes that at some level outsourcing does actually have economic benefits.

Edwin
Thursday, August 07, 2003

I think an important distinction should be made between bidding a job between a domestic and overseas contractor versus handing off the work from your existing employees to overseas. If you were to outsource a project, it is assumed you have requirements to some degree that a stranger can come in and work on the project at a cost. What that per unit cost is can vary greatly across the planet.

When your company traditionally throws projects with poorly defined goals and requirements to their IT staff and they somehow make it work - they will not find that same luxury with strangers. No requirements? No problem! They have their own analysts and PM's, but the meter is running. How many more developers are needed? How much quality are you willing to pay for? The overseas developers may get less in wages, but don't forget, their company makes a profit and when you get the final bill, is your company really savvy enough to compare it to how things were before?

Our team of four developers is getting replaced by six developers, two managers, one program manager and one project manager. Throw in the additional cost of management and analysis in our company that they could traditionally not have to worry about so much, it all adds up to some serious cash.

My favorite part of the whole deal is the overseas firm states you get new resources every 12-18 months (to supposedly keep it interesting for their staff). Guaranteed fresh faces on each big project? Where do I sign the contract?

m
Thursday, August 07, 2003

When they decide to outsource to a foreign firm that charges $35/hour instead of outsourcing to an out-of-state firm that charges $200/hr, that is one of the few cases where there is real potential for savings.  They are outsourcing anyway, so they have to deal with the communication issues one way or the other (although the out-of-state firm wouldn't have the time zone problem.), and the price differential is much more significant.

But when you replace $60/hour employees with $35 offshore workers, the real savings become much more elusive.  In particular, outsourcing small projects is the biggest bone-headed part of it.  The added management and communication overhead easily outweighs whatever savings there were in developer costs.  It's like having two dozen shirts made in China. If that's all you need, you'll get that done much cheaper locally. But management doesn't care about reality.  As far as they are concerned, outsourcing is *guaranteed* to save money.  Like the Internet was guaranteed to make them millionaires.

T. Norman
Friday, August 08, 2003

What we have to do is make  rational decision making might be the next hyper-fad.

Rob H
Friday, August 08, 2003

Yes I agree these lazy foreigners are coming from India or whatever Tinpot Little African Country they are from and taking all our hard working American jobs.

They are foreign so they work really hard, but no foreigners can be as good as our American Workers, because they are from another country.

So just say no whenever someone from a poorer country offers their services! They don't need the money as much as us, with our big economic problems in USA.

Nobody Much
Monday, August 11, 2003

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