| The Economics of Offshore Outsourcing |
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Page 2 of 3 Written by Tim Reynolds February 16, 2006
Gotta kick off the loafers and wade into this one.
How many of us in this industry have been hired to go in and fix or re-fresh or just burn-down and re-build a site built by a local "designer / coder" who had more enthusiasm than skill? There are bad coders and designers and marketing "experts" EVERYWHERE, maybe even across the street.
It's the downside of the web that not only can we find amazing things with the click of a mouse, but we can find crap, crud and just plain garbage. But like everything else in life, we each have to take responsibility for the decisions we make and from the sounds of it, finding a good offshore outsource is as tough as finding a good coder to actually sit in the chair in the next room and do the work within yelling distance. How many of the LEDers who have had poor offshore experiences interviewed their potential offshore firm? Or asked for references and followed up on them? You do this for your employees, so why not for your sub-contractors?
In my decades of dealings with friends, clients and contacts from all areas of Asia and even Africa, I find that the quality of their written and spoken English is often much higher than that of born-and-raised Anglophones. It's embarrassing.
So, with regards to Offshore Outsourcing, please don't throw out an entire bushel of apples because your first one (or two) was sour. Pick through the bushel and find one that DOES work for you. Or ask your fellow LEDers for references of ones who DID impress them. This shouldn't just be a forum of intellectual discussion and dissertation, it should also be a network of support and of promoting good and solid business practices in our ever-changing industry. IMHO.
Cheers,
Tim Reynolds
Globi Web Solutions
February 16, 2006
We keep all our work (design, programming and content writing) in the U.S. (actually ... right in Ohio), because we have good people here and we're able to charge relatively reasonable rates (well, "reasonable" compared to U.S. practices, not necessarily compared to what you could pay offshore), and clients are willing to pay what we charge.
But the whole outsourcing debate has been fascinating, because we've run across a number of companies who initially only want to do business with a design / content outfit that's in their neighborhood. The fact that we're in Ohio and they're not is just really off-putting for them. Once they see the quality of our work and results, they're usually willing to go with us, but there are always a few who want to stay local ... although, honestly, in today's global marketplace, you'd think the fact that we're on the same continent would be local enough.
Yours in all that is good and LED'ly,
Beth Earle
pilotfishseo.com
Written by C. Currey February 16, 2006
With regard to outsourcing communicating is not the issue, but only part of the issue of outsourcing. The major issue IMO is the bad quality of the programming received and accepted simply because it is perceived as being initially 'cheaper'. Most in business know that the initial development is most often the cheapest and easiest, especially if not adequately documented.
Regarding communication -- why is the American slang considered at fault? It can and has been argued by those who study languages that American English is closer to Shakespearean than other English versions. When I was a programmer in Germany I learned German, I did not expect the Germans to modify their language to mine, it was
my job to communicate effectively not vice versa.
Regards,
C. Currey
Written by Tom Anson February 17, 2006 I think Sunil Bahl's comments on the quality of outsourced programming are very good. While I can certainly understand (and do not doubt) the experience of Currey and others, the question isn't necessarily one of outsourcing, but simply finding competent workers.
Over the years, I've dealt with a lot of companies in the US in which I couldn't find anyone who could read English. I mean, I think English was their native language; they just couldn't understand anything I wrote. In some cases, I spent 10 times the amount of time that should reasonably be expected just to clarify -- again and again -- the whole point of an email. I don't know if the customer service people were just too busy to actually read what I wrote, or if they were trying to answer my questions with a copy-and-paste approach, or what. Whatever it was, it didn't
work.
I've also seen a lot of "professionally-designed" websites, done by US companies with local workers, that were simply awful. I had a US company do a design for one of my websites. It was so bad, I just walked away from it. With a lot of extra work on my part, I managed to salvage part of the logo.
So, poor-quality work and communications problems are not restricted to the experience of oursourcing. As in contracting any work, you need to know the company. There are shady and incompetent people at work everywhere. And unless you can go to someone's office, sit down and talk with them, take a look at the facilities and the workers and see examples of some of their work, you never really know what you're getting. As Sunil said, "Safest way would be to work with people who are recomended to you by friends, family and collegues."
On the other hand, sometimes communication problems are simply a matter of finding an effective approach to communication. A couple of years ago, I contracted some work with a (US) copywriter. She does top-notch work, and everyone on this list would recognize her name. And I think of myself as a fairly good writer. But we had a very hard time getting the first few pages of copy written. Things went back and forth about five or six times, when once should have been enough. Finally, I tweaked my approach a little, and everything went smoothly from there.
Tom Anson
therapeutic-grade.com
Written by Jean-Pierre "Pete" LeClair February 17, 2006
> In some cases, I spent 10 times the amount of time
> that should reasonably be expected just to clarify...
- Tom Anson
To poorly paraphrase John Kennedy:
"We must communicate not only so that we are understood, we must communicate so that we cannot be misunderstood"
I work in a technical sales environment where what we put into writing we are held to. Our promises of performance and delivery have to communicated clearly and concisely (sometimes these are mutually exclusive). It is not unusual to have several revisions of a document before the commitments are written in terms that cannot be misunderstood. It is not that English is anyone's second language, it's just that "words mean things" and we all have to be in agreement as to what they mean.
Best Regards,
Jean-Pierre "Pete" LeClair, President
AgentZ
Written by Mark Lewis February 20, 2006
I am finding that following the same guidelines for basic ESL web design are helping in communication with my programmers in
Malaysia.
Also, (and this may be common knowledge but was new to me) after struggling with conveying some of the basic concepts of the functions of the site we are building (via emails and outlines and scans of mock ups) we finally had one 5 hour IM chat session that was incredibly productive. We were able to discuss and debate each of points and finally agree on a very specific plan of action.
I have had very good luck with outsourcing so far and have found foreign programmers more willing to try new ideas.
Mark Lewis
Partners In Rhyme
Written by Rick Gortatowsky February 20, 2006
This is another one of those debates that is just rather difficult to throw pointed remarks at. Some will say outsourced programmers are bad, some are good, just like any profession. It really depends on how we define the guidelines. In programming there are just so many disciplines of it now that guidelines really do get difficult to define. A programmer should always be writing good readable code right? Ummm no. This is what books tell you though!
If someone is a native of India or Egypt they may document well does not mean I can read it. If someone is English and documents well does not mean the chap from India can read it. If someone writes just bad code, well, bad code is bad code or is it?
Mike Abrash who is a master of optimized code has pretty hard to follow ways of obtaining blinding speed. That's good code. Just because it may take me hours to jibe it (if ever) does not mean it's bad. Let's all code in hand-tuned Intel Assembly Language and see how many C++, C#, Visual Basic, PHP, Perl coders etc. can follow it. I suppose I am privvy in that I learned Assembly Language back on a TRS-80 Z-80 based computer so transitions in CPU's has been natural. But, I don't expect someone who's a compiler based programmer to understand the myraids of Intel addressing modes or how / why Binary Coded Decimal is a better solution to floating point math (when accuracy counts) than using a FPU based solution completely transparent to the programmer via a compiler.
As to Web programming... well... It's only now really starting to come into play. Most web based sites are childs play. These are not "programmers" creating webs, they are web designers. Web designers (many of them) like to fashion themselves as programmers. They are not. Just because they can take some scripts and make web pages does not mean they can program scripts from scratch. This is like saying, "I can use MS Word, so I am a programmer!". They like to fashion (keyword here) themselves as programmers as it makes the completely computer uniformed prospect client go, "Ooooo! Buzzwords and terms! They can make a website! Ooooo!" and have a wallet.
It's like this... An architect can build you a good house. A home designer can make it look nice (hopefully). There are good architects and bad ones, there are good designers and bad ones. But the two disciplines are as far apart in reality as can be. This is also 95% of the time the case between "programmer" and "designer" who chooses to fashion the buzzword programmer around with "web designer".
Due to this complete mess many a company who actually create programming tools are attempting to make their tools more effective for those who are not really programming savvy. Microsofts 2005 line of developers tools are quite amazing efforts on Microsofts part for example.
Outsourcing of staff is not a symptom of good / bad software or hardware engineers. It is however a sympton of a faultering economy where global competition for business and end run revenues grows more fierce. Outsourcing of technology jobs related to computer engineering is no different than outsourcing of clothes manufacture or other goods. When a labor force and demands of share holders and markets wanting revenue performance make it difficult to compete against businesses external of an economy this is what happens. Cutting costs results in more revenue.
In the US of A we are so very used to stipends attached to working that it is part of the culture. Earning a retirement based on years of work. Options of investments, health care provision and much more. These facets of the culture work very nicely if a nations economy is atop the hill of "have's" in the world. Our country has turned from "Have's" to borrowed time due to enormous amounts of debt, expectations of more more and more by everyone when in fact we need get back to our roots.
The American worker can outperform any workers on the planet. I truly believe that is the case and the nations history displays this. However, the American worker will not outperform any workers on the planet unless the American worker is going to see rewards consumate to that effort. This is where the equation comes apart. Other nations workers in up and coming nations, India, China etc. will work hard for less as they are on a expectations mind set, "If I work ever so hard I will see my family fed better, I will see my standard of living rise". Here its different. The view is, "If I work as hard as they are willing to work I need to get more" when in fact that other nations workers are getting less then we do when we do not work hard.
The wealth of this nation is being sucked dry due to many many facets of what we have as our culture. From this is made in China and is cheaper, cheaper is what I buy so then I have money to buy more rather than buy American to... Health care benefits that every person deserves. Health care should not be something that some can afford and others can not. It should be a quality system maintained as a function of society. Education should not be a priviledge afforded those who can afford it but instead a function of society. There are many facets of these matters and others that cause us to be unable to stay competitive with other nations.
In order for things to change a ENORMOUS fundamental shift would need take place within the USA. We as a nation cannot continue on the paths that brought us past success as they no longer are effective today and will be even less effective tomorrow. This will not happen.
I read something quite scary the other day on a web in Europe. Basically speaking the web was pointing towards US policy of today. It asked the question, "Is the USA moving the globe towards a World War III". At first I thought this nonsense. But, if you take in the big picture of the world, where we are vs where we may well be in 20 years. If you take on the big picture of a globe now so very small in comparison to years gone by yet more seperated culturally then one would really think possible in todays world... If you take in the giant lump of "eee gads" from economics and what-abouts's it begins to seem quite more thought provoking than simply
ridiculous.
I digress...
Rick Gortatowsky
Written by Beth Earle February 21, 2006 Hello, LED'ers.
Here's a different take on outsourcing: http://www.newtidegroup.com/info/index.php
This company seems to use non-U.S. freelancers but has U.S.-based project managers to deal with their U.S.-based clients. This approach (which is new to me) seems like it would solve at least some of the communication problems that some LED'ers have cited.
Regards,
Beth Earle
pilotfishseo.com
P.S. We have no association with this company at all, despite the oceanic bent of both our names. Their site popped up while we were doing some research, and their approach seemed worth sharing.
Written by Kurt Francis February 21, 2006 I am especially interested in the current discussion of the oft-controversial topic of outsourcing, interested because a small start-up company my former partner on a website established (in which I invested a considerable amount of money, at least for me). Though the company proper is tiny, it is genuinely international: founded by an American in the British Virgin Islands but focused on the market in Southeast Asia in particular, with American and Japanese investors, some local representatives in Thailand, and a Malaysian sales rep.
The company has outsourced two software projects to date, one to a free-lance American based in Southeast Asia, the other to a small firm in India. Though the American is a bit of a prima donna and can be something of a pain, he's darned good at what he does. The folks from the Indian firm have proven excellent, too, and are easier to work with. One came to Bangkok for an extended trip doing consultation regarding just what the company needs. Unlike with some call-up customer service centers, language has not been a barrier.
I'm a strong supporter of outsourcing in all it's forms -- "in all its forms" meaning including, for example, migrant labor. But especially in the more common meaning of businesses outsourcing both labor and production.
In a sense, all of us are involved in outsourcing on the buying end. I've owned exactly one American car that incorporated some foreign-produced parts (I'm American), 3 VW Beetles produced in Mexico, and several Japanese cars I bought in Macau that were produced in China with steel from heaven knows where.
Of course, outsourcing gets hairy for politicians when jobs flee offshore, but what are businesses having legal requirements to do the best possible for investors to do? In the case of the company in which I've invested, I'd have a heart attack if my friend running it decided to send his programming jobs to, say, North America or what we used to know as Western Europe, given that he can get the same work done in India for maybe 20-25% the price it would cost in the West. (The "not-with-MY-money" syndrom . . . ;-)
Heck, in a way I've even been a beneficiary of a form of outsourcing. The last time I taught in university in America in the late 1980's, half my teaching was with foreign students, almost all Vietnamese or Chinese (the mainland and Taiwan). After that I taught in universities in mainland China, Macau, and Thailand.
I reckon in this age of globalization outsourcing is here to
stay.
Kurt Francis
bangkokatoz.com
February 22, 2006
Excellent post by Rick Gortatowsky. Well done Rick. I totally agree with everything said. I think every one should probably save this and re-read it at least once a week.
The concepts apply to more that just computing.
> As to Web programming... It's only now really starting
> to come into play. Most web based sites are child's play.
> These are not "programmers" creating webs, they are
> web designers. Web designers (many of them) like to
> fashion themselves as programmers...
How true. I have harped on this very subject many times. A web designer, is not the same thing as a web developer is not the same thing as a graphics designer. I would be very hesitant about engaging anyone that does not understand the difference.
I teach courses in Web design and other courses in Web development at our local college. They are completely different, I use different books and different techniques. This is not to say that some folks cannot cross over. In my own business I do a lot of web design and get sign offs from clients before I ever switch hats and do any web development... and call in my son when graphics design is needed.
> This is another one of those debates that is just rather
> difficult to throw pointed remarks at. Some will say outsourced
> programmers are bad, some are good, just like any
> profession. It really depends on how we define the
> guidelines. In programming there are just so many
> disciplines of it now that guidelines really do get difficult
> to define...
This is why, when I engage with a new client, I will completely outline what I "understand" they want with narratives and mocked up screen shots. This makes sure I understand what they are asking for and they understand what I am going to provide for them. We usually have to bounce this scope document back and forth several times clearing up discrepancies and both of us usually come up with several things that we mutually "forgot" about. This approach has worked quite well for me over the years... and I might add, for my clients as well. It also makes it easier when the client asks for stuff that was not in the original proposal.
Now in regards to outsourcing (and especially off-shoring), the problems usually come in the design phase, not in the programing due to:
1. Language barriers
2. Cultural differences
3. Expectations
e.g. if you are selling window air conditioners, you are going to have to take a completely different approach if you are trying to sell them homeowners in Alaska, than you would be if you were trying to sell them to homeowners in Texas. People shop differently in the USA than they do India, Russia or even Mexico.
Another example is that I have even noticed that some cultures have a tendency to use even different colors than others in web design. I have been in other countries and picked up brochures that were printed in (what I though anyway) rather odd colors that I would have never used together, but they fit right in with their
culture.
These are the little things that can get you in "trouble" when you off-shore without clearly defined guidelines. Work ethic can also cause conflicts, but I won't go into that.
Mark Roberts
Roberts Computing Systems
Written by Mark Medlicott February 22, 2006
I have been reading the outsourcing debate with plenty of interest. Initially I was against outsourcing (especially to India or Russia, the main proponents of outsourcing it seems), and backed the local industry.
Then during one of my brighter moments, I realised that as I work in New Zealand and advertise "That I charge according to my living costs, not yours", I was indeed an outsourcer myself, even in this little country of 4 million people. I am trying to get work from my main cities because it is cheaper for me to live in my small town, or even from overseas due to the strength of our dollar.
Are we not all outsourcers at the end of the day! Do businesses always employ designers from their home town? No. But they employ the local plumber don't they? Yes.
Why? The reason businesses outsource, is the same reason we tout the Internet as the best communication device ever created. Because a business can compete from Alaska to New Zealand for the same job if it is online, then outsourcing will continue to grow and the quality of the outsourced products improve. Most resources needed to create a website can be emailed, phoned in, or VoIP'ed to a designer. Because I don't need to physically meet you or use your skills as I do with a plumber, if you provide the end product I will pay.
Over the last few years I have also missed out on contracts which have gone to Indian or Asian designers, but now I have an association with a company that has all its website work designed in India. I meet the new client and go over their requirements, and then the Indian designers put together up to 3 designs for the agency and client to study. I then optimise them for the search engines. This association suits me perfectly, as design is not one of my strongest points (nor a favourite part of the website business), but I am good at pulling other people's apart, which is basically what happens. SEO and usability testing. So far we have had pretty good results, with happy customers all round, and I don't have to chase the money either.
Just my twist on being an outsourcer from the land downunder.
Regards
Mark Medlicott
Medlicott Design
Written by Tom Aman February 23, 2006
> In order for things to change a ENORMOUS fundamental
> shift would need to take place within the USA. We as a
> nation cannot continue on the paths that brought us
> past success...
- Rick Gortatowsky
Speaking as a non-American (I am a Canadian), I think the outsourcing problem is, like many other problems in the US, a symptom of too many believing in "the American dream" as sold to us by movies and TV. Too many people aspire to that big home in the suburbs, two cars (or more) in the garage (preferably at least one SUV), the 52" wide screen TV, etc., etc.
Realistically, does a family with two or three kids really need a 3 or 4 or 5000 square foot or larger house? Bear in mind that just after WW II, 1000 to 1200 square foot bungalow with a basement was considered right for a family that size and a 17" or 21" TV was considered BIG (23" was enormous).
And because we see a lot of US TV, things are not much different in Canada. Wages are a bit lower so some of the outsourcing from the US is to Canada - at least when a support call is directed to Canada, the person who answers will speak understandable English
(usually).
But similar problems exist - such as buying the "Made in China" because it is cheaper, to leave some money to put toward the big TV or new SUV forgetting that, by doing that, it helps put someone local (meaning in this country) out of work.
And local companies are, in many ways, just victims - in order to generate the profits expected by shareholders and to be able to pay the wages and salaries expected by employees (or demanded by unions) and to be able to sell at anything like competative prices, they attempt to save money by outsourcing. Rick is right, an ENORMOUS fundamental shift would need take place to change this. If shareholders would settle for less and employees would forget about that next raise and both would forget about that new SUV or bigger house and settle for a little less, the company could afford to have work done in house or at least locally so that the jobs and money would stay in the country where everyone would benefit.
Tom Aman
Aman Software
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