A Newsweek magazine feature, "Should I Stay or Should I Go?," reports that many companies are pulling back to the U.S. operations that had been outsourced because of poor quality work. "Analysts at research firm Gartner have declared 2004 the start of the 'trough of disillusionment' with offshoring," the article reports. Among the reasons: 40% turnover at outsourcing firms, and poor management in the U.S. that looks relentlessly at cost cutting without clear business objectives. Life Time Fitness hired a "large, reputable Indian outsourcing firm" to write software. Not only was the code buggy, but the Indian firm also ran up big overtime bills fixing its own mistakes. "I've since talked to scores of my peers, and we are all singing from the same hymn book,"IS Director Wesley Bertch says in the article. Dell Computer "onshored" PC help desk operations due to poor verbal skills. Capital One pulled out of a New Delhi call center after catching that firm offering unauthorized discounts to boost sales. Lehman Brothers "yanked back" a help desk, citing a need for faster response.
Still, the article claims that outsourcing will grow once management figures out what jobs are best suited for it. An associated video is entitled, "The Good and Bad of Outsourcing."
With Bush you know what you are getting. With Kerry he is your classic rule by the polls Dem. I am sure you know all about Heinz and his ties to that 'Benedict Arnold' company. Bush is no savior but you know where he stands.
Posted by Synapse Overload @ 02:24 PM, April 16
When will America wake up and realize that it is the greedy CEOs and executives that are at the root of all this. They are Benedict Arnolds! Off-shoring provides a way for a big fat bonus check from cost cutting. The leeches leave the company within 2-3 years before the sh*t hits the fan. Subsequently, they move on the another corporation and do the same. Our current administration reinforces this argument with their own actions and lack of morals. I thought the age of Gordon Gekco and "greed is good" was over, obviously I have been sadly mistaken.
Posted by StonerDude @ 09:36 AM, April 16
I think they should out-source drug testing. To help them learn how, I will send a weeks worth of urin to them.
Posted by Ball-Park Frank @ 09:11 AM, April 16
80% of my recent support calls to various companies ended up with someone with an Indian accent on the other end of the line. In some cases, I was unable to understand the babblings of the other person, so I hung up, called back, and hoped for improvement. (No one would ever tell me what country they were in.)Invariably, the answers I received were script-read, non-solutions to my problem. I pay good money for the services I use. I expect the support behind these services to at least attempt to answer my questions with creativity and not a script and in an intelligible voice. This ain't happenin', folks.
Further, I do not want my private information shared with foreigners who are not under any US legal jurisdiction. How dare banks and other financial institutions hand out US citizens' financial data to anyone who happens to show up at a call center to make their 25 cents a day, living 10,000 miles and 5,000 years from where we are at? The answers: arrongance, greed, stupidity. Until consumers stand up and show a little backbone, no changes will be made.
Posted by Roy @ 03:25 AM, April 16
One of the biggest problems I've seen with many comapies choice to 'offshore', which seems to mean India, is that they have not taken into account just about everyone else from Europe to the US is done/doing the same. The chances of there being enough skilled staff available is slim to none. So back to the same old story, Paying over the odds for poor quality labour. A clever move would be to wait until a chunk of companies have moved their service out and then you could pick up their staff and facilty at a discount. Nice eah, pre-trained, high quality staff that are used to speaking your language.
Posted by Vivek Vishnoi @ 09:04 PM, April 15
Technology has made the whole world one big market for business to play and if a business does not use the resources the world has to offer it's the one that is loosing out and not the world. Erecting trade barriers will only create shelter for inefficient business to exist for a while before it caves in on itself, as nobody will buy its product when it's no more competitive (its only a matter of time that quality price ratio will tip the scale).
In short keep pace with the world or risk being left behind.
Posted by Gord @ 08:30 PM, April 15
AsianIT points out that the problem is with the specifications for outsourced work. Can anyone recommend a methodology that works will for outsourcing?
Posted by Chuck Hunter @ 12:46 PM, April 15
Some may say that it is cheaper, but they don't
know the ramifications of language, timeliness,
logistics, and the other mirad of problems that
occur with IT. It is tough enough to deal with
lack of knowledge and the politics of the game
to accomplish success in IT. Offshoring will not
work for IT in many ways, and it is not good
business for America or anyone else. There
are better solutions.
Posted by David Faour @ 11:32 AM, April 15
Offshoring is neither the panacea that CIO's once thought it could be, nor is it the vile evil that IT professionals perceive it to be. Offshoring, or domestic outsourcing, can be a valuable tool in managing an organizations IT portfolio. It can be used to move low value activities outside of the organization, thus allowing employees to focus on developing new products, technologies, processes, and so on. Offshoring can also be used to quickly scale up and organizations capabilities, adding new competencies and products. However, offshoring can also bring endless coordination and management headaches due to differences in culture, time zone, understanding of requirements, and other issues that come up. The problem with outsourcing is that many short-sighted organizations focus on the "sticker price," without regard to TCO. They often forget that there will be additional infrastructure and management overhead, and that will be required. In my experience, outsourcing is easiest when there is a high-volume, low variability/low value activity that can be sent out. Otherwise, significant care is required in details of the arrangement, from contract and payment terms, to specific details of the deliverable, so quality can be measured and managed. The bottom line is that any organization considering offshoring must carefully assess what it expects to gain through such and arrangement, and take a wholistic view of the costs and benefits of pursuing offshoring as an alternative to adding headcount or domestic outsourcing.
Posted by Why Bother @ 11:32 AM, April 15
Regarding comments by AsianIT:
Morons should not call others idiots. This is NOT "global competitiveness." If currency valuations were equalized worldwide, then we could talk about legitimate competition. And I am NOT implying that Asian I.T. staff are of low quality. I have worked with smart, well-educated Asian folks for years. No problems. But that is not the point. The Indian and Chinese and Russian outsource centers do not compete with Americans based on quality. They compete only on the basis of favorable exchange rates and loose or non-existent labor laws that the multi-nationals can take advantage of. And let us not forget the extremely favorable tax implications for the American multi-national that moves operations off shore. So - is this 'fair' competition? Moreover, Mr. AsianIT, what is the purpose of a sovereign nation? Is it "shareholder value," or providing for the common good? Regardless of what you think of us idiots over here that have educated or "trained-the-trainers" for the vast majority of the technologists in the developing world, I wish you well.
Posted by mark edwards @ 06:52 AM, April 15
Dell Employs More Workers Overseas Than In United States
http://www.informationweek.com/story/showArticle.jhtml?articleID=18901298
Take a look at Dell's employment distribution for 2004 and 2003.
For Jan 2004 48.3% in US
For 2003 54.2% in US
Let's see for my next magic trick...
So what does the article about Dell onshoring something or other mean? We are onshoring these X jobs, but pay no attention to the 2x jobs we are offshoring?
Posted by StonePuppy @ 05:26 AM, April 15
It makes you wonder what kind of morale these people must have. They make them work the graveyard shift, change their names, change their accents, all to have me complain about a 25¡é charge on my bill. They must be thinking 'All of this schooling for this?'
Posted by Louis Hernandez @ 08:40 PM, April 14
My former employer attempted outsourcing and ran into very similiar quality issues. Furthermore, our U.S. developers were often frustrated by the level of support they had to provide. Finally we placed two american programmers and a a project manager in India in order to complete a critical project. I do not think it would have been successful otherwise.
Posted by Anonymous @ 04:56 PM, April 14
I'm an Indian born but living in the US for nearly 10 years now and even so I'm absolutely in support for keeping jobs here. I've always given my recommendation that cost cutting will not help quality which will affect the final dollars at the end. Recently during my visit there, I discovered that there is fierce competition within the jobs itself. People are working 14 hour days and entire weekends. Personal relationships are strained. I've even met a couple who couldn't take their sick kid to see a doc due to the fact that their project managers would let them go. And then there is this false sympathetic concern about the well being of you and your family. And God forbid if you are strong enough to express this, your name will top the list of layoffs or not fit for any benefits. Overall, I think this is another bubble which will cost IT its outsourcing trends. Why isn't the govt doing anything about this ?
Posted by Randy @ 02:25 PM, April 14
I take the attitude that if IBM and all the other "outsourcerers" want to send our jobs overseas, then they won't be getting my dollars or my recommendations for their products. Everyday I grow more resentful of these greedy SOB's and the politicians that support their right to be "free traitors". As everyday goes by, I look first for American made products and services. From now on my gifts will be crafts from local artisans, not cheap hi-tech gizmos from overseas. Talk is cheap, it's time we all started doing something about it. Be American, Buy American!
Posted by Chuck Staples @ 01:26 PM, April 14
It's a curious dichotomy... I've been continually impressed with the skill and professionalism of engineers from India with whom I have worked here in the US, yet when I deal with India-based off-hours support engineers from companies such as HP/Compaq, I have been frustrated and disappointed nearly every time at the language difficulties and the lack of quality information I receive. If my experience is typical for the average consumer, I predict a lot of unhappy customers of companies with "outsourced" support.
Posted by College guy @ 12:45 PM, April 14
For all those that want to harp on why we should ban outsourcing, remember that US is not the only country that outsources. According to the latest data, they are just 30% of the BPO industry in India. If the American companies fail with BPO but their non American competitiors suceed, then in the global scale the American corporation will lose its competitiveness. Plain and simple.
Posted by YouKnotGet @ 12:44 PM, April 14
Ha Ha..I hope everyone of those "brilliant" managers who support outsourcing get what they deserve! I can see it now...colleges will be offering management courses! "How to lay the blame for outsourcing on someone else 101" Ha!
Posted by Re-Invent @ 12:01 PM, April 14
Let us have world peace:
- Buy only American products
- Ban all arms sales from the US
- Restrict all companies to do business only in US
- Pull out of Iraq. Who cares?
Posted by Tony @ 09:38 AM, April 14
"poor management in the U.S. that looks relentlessly at cost cutting without clear business objectives. " Key Phrase, also I have always thought of IT to be nothing more but the art of communication, a person has an idea and it is my "job" to convert that idea to an application. WE DON'T COMMUNICATE WELL HERE, what gave anybody the idea that we could do that overseas with different time zones, accents, dialects, etc.. I have loss all respect for the american business culture, greed for the sake of greed, our stock market will drive us as a country into the ground.
Posted by AsianIT @ 06:40 AM, April 14
I agree that US companies outsourced because of cheap labor but I disagree that the product being sent back is a poor quality. As the saying goes it's "GIGO". If the local management can give proper specifications, overseas workers will do what is needed to do. The articles related to this gave only a few errors of outsourcing. How about the errors done locally? You might end up loosing all your available disk space to accommodate the list. And besides, don't blame that outsourcing is the reason for economic distress, it's not even 10% that contributed on that. You have been outsourcing all year long. Didn't you notice that all you wear is "MADE IN CHINA". You used and paid them cheap and sell here for double triple the profit here.
Why do you want to ban other people from academia? Is it because you are afraid to be left behind? Come on, this is global competitiveness. And I thought people here always quoted they are the no.1 in the world, then prove it. Let them play in the same field and may the best man win and that is the time you can say "No. 1 in the world" and not just "No. 1 among idiots".
Posted by IMK @ 06:36 AM, April 14
I hate to say it but I've had some positive experiences with outsourced call centers. Obviously some thought must be out into what the real gains are, but the awful truth is that many companies are providing better support for their customers due to a highly-skilled workforce in India that are willing to take the jobs that either noone wanted, or were only taken by people too boneheaded to do anything else (remember some five years ago?).
Posted by Another American Professional (Geek) @ 06:31 AM, April 14
Those of us who've been in the industry long enough knew this would happen eventually. Many of us have worked with some of the folks who have visas to be here but came from those places where the outsourcing lies. Some are indeed good, but most I personally have worked with aren't and don't care to learn more to be the best they can be. Maybe it's cultural...maybe it's laziness. I don't know which(though I know some Americans who are much lazier than anyone from another country). Want an idea of how bad it gets? When it comes to software development and architecture, let me put is this way, "Would you like cheese on your spaghetti, sir?"
Posted by WorkerB @ 05:59 AM, April 14
Management thinks outsourcing high paying jobs is so great... What say we outsource the CEO, CTO, CIO, etc since they are the very highest paying jobs.
Posted by st jude @ 05:22 AM, April 14
I always thought the "genius" of American Business Management was at peak form when they decided to send U.S. manufacturing and intellectual assets to Third-World sewers, to god-foresaken places that hate America and would not understand the Western Mind if their skulls were cracked open and Plato poured in, to hovels with nuclear weapons pointed at us and lacking only manufacturing and intellectual assets to be able to deliver them.
Absolutely brilliant.
Posted by John Townsend @ 04:45 AM, April 14
Ban all H1-B, H2-B, L-1 visas forever andretroactively. Cancel all green cards from 20 years in the past.
Eliminate all foreigners from Academia.
Utterly ban all outsourcing of technology, with serious punishments.
Crank up taxes on imports, esp. high-tech.
Massively cut US payroll taxes on Americans.
Posted by Dave @ 10:56 PM, April 13
Outsourcing is relentless. The outsourcers will themselves be outsourced. It's a short-term solution only. I can only hope for stability later when we get hired to fix the problems generated in this.
Posted by Alexis @ 04:48 PM, April 13
Yet another big risk. What about security? Think about it.
Then HIPPA. How can you protect Patients, Clients, Customers, Partners, etc private information if your source code and data is been manipulated outside the US?
and Yes we see more and more poor quality and buggy applications.
This is a big mistake. "just to safe a few fucks"
Posted by NightOwl Development @ 03:15 PM, April 13
There is a right and wrong way to offshore work. Companies that open a business overseas, hire and manage using local talent may be successful. If all the company hopes to get is lower costs then they will be disapointed. The company must understand that most of the overseas work will be done on a code-to-spec basis and American companies can't or won't write the necessary design specs.
Posted by DrWatson @ 02:26 PM, April 13
It's a race to the bottom of the pay scales boys! I personally will code for rice.
(for the sarcastically illiterate, I was joking) ;)
Posted by Tom Philo @ 01:11 PM, April 13
Contracting out has always been done - by businesses as well as individuals. But when you contact out something that is needed to be performed EVERY DAY then there are many hidden costs that are never talked about or mentioned when the justification is done to give the work to other firms. Expertise - gone; accountability - gone into myriad pages of legalese that has to PRECISELY detail what is expected, and required; levels of performance must b detailed (and since you now have no in-house experts to know what is currently valid they can negotiate low and charge you extra every time to meet your needs since you have no idea what is valid anymore); short term needs - forget about asking someone to stay late to fix a problem - if that is not in the contract "you not get". Many managers won't let workers telecommute since they say they need to see them to ensure they are doing work and yet these same managers are willing to spend millions a year to pay firms (people) 12,000 miles away to do work for them? Short term gain for long term failure is what they are striving for. Many other items factor into this also. I've had a page on my site concerning this since late 2002.
http://www.taphilo.com/tom/contracting-out.shtml
Posted by Robert H Ruff @ 01:06 PM, April 13
The naysayers predicting disillusionment with offshoring are the same cynics that pooh-poohed the other 14 magic bullets that have lined the big consultants' pockets: Management by Walking Around, Rightsizing, ISO 9000, Quality Teams, Bricks N Clicks, barf, puke, etc. Oh, right, I'm one of 'em....
Posted by st jude @ 12:32 PM, April 13
...and what did the collective genius behind American IT expect? Outsourcing was done simply for the sake of the Almighty Penny. Skills never had a damn thing to do with it.
On behalf of any American worker who had to suffer even opne day because of the outsourcing fad, I hope Big Business, in whom I have lost much respect, gets it up their arse in spades.
Posted by Concerned American Professional @ 12:29 PM, April 13
Maybe soon Corporate leaders and Wall Street will realize that the American worker is NOT just an over priced waste of money and stop sending our jobs over sea. Quality is worth more than CHEEP LABOR! You get what you pay for!
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