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Outsourcing "hype cycle" officially over

In today's NY Times:

"Send Jobs to India: Some Find It's Not Always Best"

Jayson Blair
Wednesday, April 28, 2004

Uhm, is this news to anyone?  "outsourcing doesn't work 100% of the time..." yeah.  Like anyone here thought outsourcing worked all the time.  I think we established on this board 2 years ago that outsourcing has its merits and detriments just like anything else.  Not saying its a good read, I just don't think its news.  Maybe the decision makers are finally realizing what everyone else knew.

Wednesday, April 28, 2004

it may have been established years ago by those in the know that outsourcing is not the cure to all ills.

but it can take an article in the NYT/WSJ/etc to make the 'general public' catch on.

Wednesday, April 28, 2004

Once it appears on the cover of Wired, then it's officially over.  So wait for the Wired cover that says:
"Outsourcing? Will we all be unemployed?"

Then it's officially dead.

Michael H. Pryor
Fog Creek Software
Thursday, April 29, 2004

I agree on the Wired cover principle.


I liked these soundbites from the article:

> "Only certain kinds of tasks can be outsourced -- what can be set down as a set of rules. That which requires more creativity is more difficult to manage at a distance."


> Bladelogic... concluded that projects it farmed out...could be done faster and at a lower cost in the United States. That was true even though programmers in India cost Bladelogic $3,500 a month versus a monthly cost of $10,000 for programmers in the United States. "The cost savings in India were three to one," Mr. Ittycheria said . "But the difference in productivity was six to one."

Dennis Atkins
Thursday, April 29, 2004

This defense of outsourcing caught my eye.

>>>>  Mr. Pradhan, who is Indian-educated, disagrees with critics who say that Indian-trained workers lack creative ability. When outsourcing fails, he said, it is typically because "less disciplined" businesses try to farm out projects that are not properly defined.

He's missing the point: properly defining a programming task is intrinsicly time consuming, difficult, and inefficient, which in turns makes outsourcing a dubious practice.

Thursday, April 29, 2004

"But the difference in productivity was six to one."

The funny thing about this is that I've read numerous times the pro-"global sourcing" (I believe that's the hip name, these days) guys arguing that one of the advantages was improved efficiency.

However, when it was time to show the figures, the main advantage was *always* lower wages.

Paulo Caetano
Thursday, April 29, 2004

My own observations from a couple of companies:

o  If your work environment is oriented around an
"agile methods" scheme, with loose specs, fast
delivery, and close customer contact with the dev team,
outsourcing won't work.  This is why technology-intensive
startups tend to have a hard time outsourcing.

o  If you have a more "waterfall" style of development, with
architects and coders, outsourcing works better.  This
is why EDS, IBM, etc can make this sort of thing work as
they have experience with big-process, relatively slow
moving projects with massively detailed specs.

Thursday, April 29, 2004

"Uhm, is this news to anyone?"

It is news to managers who thought offshore outsourcing was going to raise their stock price by 100%, cure cancer and bring world peace.

Thursday, April 29, 2004

It looks like the Gartner Hype Cycle,, strikes again.  We hit the peak of inflated expectations late last year and are now heading towards  the trough of disillusionment.

What makes all of this even sadder/funnier is that the outsourcing hype was brought to us by the same people who gave us the 'new economy' five years ago. I guess some people never learn.

Semi-Anonymous Coward
Thursday, April 29, 2004

No, what's *really* funny and sad is that the offshore hype was/is believed by the same people who believed the dotcom new economy hype.

Thursday, April 29, 2004

Will offshored dot-coms be the next Big Thing?

Thursday, April 29, 2004

What I found was the time to spec the requirements was stupidly long. There no leaving it to the developer to make a rational decision.  Basically by the time I was done doing a insanely detailed specification, I could have been handing the first version off to QA. 

tried outsourcing
Thursday, April 29, 2004

The "lower wages" are easy to measure. The other stuff isn't.
Part of the (unspoken) point of off-shoring was to limit the salaries of non-off-shore people.

Anyway, in any large and complex set of events, you'll always find examples that support a position and others that contradict it. We don't know overall the benefits (or not) of off-shoring.

Thursday, April 29, 2004

"Anyway, in any large and complex set of events, you'll always find examples that support a position and others that contradict it. We don't know overall the benefits (or not) of off-shoring."

Several people have stated positions similar, and I think it's barking up the wrong tree -- The OPs point was not that outsourcing doesn't work in some situations, but rather that the _hype_ behind outsourcing (that it is a panacea that everyone has to jump on because it's a win/win/win) often has shaky foundations. For a few years now we've had to listen to non-disclaimed statements about the limitless financial benefits of outsourcing (just a week or so ago there was an article in the National Post, and they verbatim repeated, as uncontestable fact, the claim of an owner of an outsourcing company (gee...he wouldn't be biased or motivated to bloat savings would he?) when he stated that "we can develop software for 60% less than an American company". Being in this industry and seeing the _MASSIVE_ (I think 50:1 is a fair statement) variations in project costs for similar scope projects, I find such a blanket statement the height of absurdity, but it's a classic "your salary/our salary" type of nonsense.

The media creates the reality that a lot of CFOs and CEOs follow (because ultimately they know that shareholders are buying the same line), so if the NYT has a skeptical back-to-reality article, that is big.

Dennis Forbes
Thursday, April 29, 2004

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