Monday, June 19, 2006

Outsourcing .. Offshoring.,.. Multisourcing ....Is it that bad..???

I have been working in my whole career in the Outsourced/Offshore IT Project environment. My Project management research topic is also something related to this. While surfing the web, I came up with the following blog accidentally,

In this blog,one post says “I saw an Indian boy yesterday and thought, "He's going to take away my child's job one day."

--- Can you believe this??

(Oh boy..Luckily I never had customers or teams from US or Europe who had this mentality.. The people I have worked with were very friendly and they always respected each others talents and abilities.. )

I know that there are many concerns towards outsourcing their Projects and services to other countries. But I have never come across with such criticism before J..My personal thinking is that, If you are competitive, if you are talented.. always there is a job waiting for you and nobody can takeyour place... If you are not.. Sorry..Its your problem..

Do something what you are talented at....

There is a Bright side of outsourcing which this author has never seen. …


Mahasen on 12:12 AM said...

I’ve been working with US customers for some time now, even though my interactions with them are limited, I get to know their attitude towards outsourcing from India and Sri Lanka. And I know several Sri Lankans who work in the US permanently.
The reality is, the competency level of the Americans is relatively low when compared with Sri Lankans. They do have real bright cases but an average techi of Sri Lanka is much competent than an average techi of US. So there are some companies which actually prefer to hire a Sri Lankan than an American even for the same wage. But in reality, Asians works for lower wages as well. So the companies benefit from two aspects. They get a better job done for less.
When it comes to the offshore model - cost factor become much lesser with only a slight impact on quality and speed of delivery due to drawbacks in communication channels and time differences. Companies like Virtusa have adopted a model of having a smaller team onsite and the majority offshore to mitigate these issues; thus is capable of providing a competitive advantage to the clients.

razor on 12:50 AM said...

in my work experience with indians. they've been nothing but mean,cutting and choppin from all sides. bt i still try not to generalize indians like that. what ever i still agree if ur the best there's nothing that can come in ur way.

not too long ago in my job where i was designing UI, grafix, anim for a certian software. the indian software engineer tells me.

"this intro animation looks crap, the main UI is white and this is black"

now i'm someone who i knos when to accept constructive critisizm but this def isnt nething close to that. (if u see my work u will understand). so this is wt i told it

me: hey whats ur speciality?

he: software development, why? u kno that.

me: so why dont u stick to that. i'm the designer and ur the developer. so u mind the development of this project and i'll mind the design.

Anonymous said...

Razor, Do you think why we need to hire Indian Developers to our companies when the SL Salaries are much cheaper than Indian Salaries? ( stats : refer to CIA World Factbook, March 2005 )

With all due respect to our developers…I just pasted this post from .. This post tells it all…

I think you can find Three types of resources in the industry.
1) People who have a degree as a qualification and know some development language semantics form some course or certification.
2) People who are creative, who reads books, who experiments and challenge software development concepts.
3) People who have no idea what programming is

1st type of people is usually recruited by large outsourcing companies. Because they have a well setup internal process and its matter of training new people to follow the process and making them knowledgeable only in the area that the company wants them to be fit in.

2nd types are the people who works is small or medium scale development companies. Companies which develop products or custom creative projects based on customer requirements. The customers of these companies are not ready to pay for various additional resources such as business process consultants, dedicated project managers etc. They expect a team of 5-10 people will do the job for a flat rate and they don’t wont jazz like dedicated project manager and domain consultant etc..

These requirements result the need of multi talented, very creative people to support these software projects. The developers should have little marking ability and personality, planning ability, R&D skills and self discipline to very closely communicate with team members and management. The reason is that, there are no closely monitored process and supervisor level people to monitor whether everybody is following the process. Basically no one will consider the management time as a need and no one is there to pay for this time.

When you compare software developers, you can find hundreds or thousands of people of category 1, but very limited people like 500 for category 2. Because category 2 is value addition to category 1 and the companies looking for category 1 prefers category 2 people.

Therefore finding a category 2 person is very hard. Even if you find one, he is currently working in someplace and they won’t allow him to leave. They will offer what ever he wants because it’s a very valuable asset to them and they know how hard it is to find same caliber of a person.

I think usually at a given time, there are 20-30 developers in category 2 changing their companies due to some reasons. But since there are new companies joining the industry every day, grabbing one is been a major challenge.

In a way the outsourcing model has created some of the problems.
Consider the garment industry in Sri Lanka. Sri Lanka is one of the best countries who produce garments to the world. But see how it works. International company seeks a local partner to outsource its production. They will setup the factory, train people, and create processors and they will create a best business venture.

But what happened when the US stop the quota system.?. Most of the Sri Lankan garments factories had to close. My point is that, knowledge won’t come to 3rd world countries as to independently operate. Some consultant creates a process and makes our people to follow that. Locals don’t know the whole operation. That’s why they couldn’t create own brands and designs and market it to the world. Locals are best at following someone else’s process productively but not at creating complete processors own there own.
This is happening to the local Software industry as well. A company which does well in outsourcing in SL has only their production arm locally. Either there process is setup by some international consultants or they are getting the whole spec from another country to produce the code.

Some time back I interviewed a Software Engineer, who worked in some major outsourcing company in Sri Lanka. When I asked him some simple questions like , “how to make a connection to the DB” for my surprise, he told me that he doesn’t know to do it as they are using ready made components.

This is the bad side of outsourcing. It will make our workforce dumb; destroy their creativity and destroy the eager to learn new things. Most of the developers don’t like to put extra effort to lean something and improve themselves from developers to architects or some senior level. They want a higher salary with less effort but doing same set of job functionalities. This has not become a problem now because there are lots of outsourcing jobs in the country. But we have no idea when this model is going to fail. In that day we are going to face a hell of a problem….


Madhawa on 1:50 AM said...
This comment has been removed by a blog administrator.
Madhawa on 1:53 AM said...

I have been working for a US company about 2 months up to now. I haven’t got any interactions with them yet. But I heard couple of interesting things abt them from my project manager. When they had a visit to USA last month at first most of the peoples their, weren’t be nice to them. He told that they don’t like outsourcing works in their project to Sri Lanka. As he told at first day they don’t care SL guys and didn’t even try to talk and ignore them. Their average age is 32-35 years and they are afraid of their job security because of outsourcing. But after some times they have been ok to our guys and the nice thing is their CTO loves us more than he loves US guys. May be he knows the important of us. May be others are still with American Dream. :D

Talking about Indian developers, I have heard both good and bad about them. But I can remember, sometimes back I read a news article in a web site (sorry I can’t remember the site now) which says UK IT firms gonna outsource more and more to Sri Lanka than India because of the quality of our developers. As that article says it’s not only abt tech things but other things like soft skills.

Yeah what Buddhima is telling is absolute truth and I have seen some part of it here at my current place. But like it happens always, there are all kinda guys here and it’s all up to you to be a developer, programmer or whatever. :)

JohnR on 9:47 AM said...

I am amazed that some people have such a 'defeatist' attitude toward outsourcing. The fact of the matter is, we have been doing outsourcing on many things for a long time. And it is beneficial to both parties. It is just potenitally painful for some people in the short term, as there can be dislocation. However, I have recently read in one of the more popular IT magazines that IT employment in the US is actually way up again and is approaching all time highs.

This all reminds me of years ago in manufacturing, particularly the steel industry. the union mentality was similar to that of the person who fears the Indian child taking their child's future job. People naturally want some level of security, but the unions, in my opinion, represented more than that. there gets to be an 'entitlement' mentality, much like what has been a problem for governments that provide social nets.

Nobody in life is really entitled to anything. We need to fight for what we believe, and we need to compete for what we get. Along the way, there is plenty of room to be compassionate. but if we expect someone else to give us security and guanrantees for the future, we are kidding ourselves and actually giving up control of our destiny in the longer run.
John R
Project Management Training Online

Mahasen on 11:41 PM said...

I feel we are deviating from the original topic a bit, but still want to add my view on this.
I must stat with saying that I do not completely agree with koolb’s categorization. Especially his perception of large organizations, their structure and outsourcing models.
A degree means nothing but a systematic education. This is not considered mandatory by most of the larger organization but is highly preferred, because when it comes to enterprise level development a systematic approach is they key to the success of projects; and a developer who is trained in such discipline is easier to be mentored in to such a process than others.
But a degree doesn’t make the differentiation of excellence from the average at any scale; It’s the enthusiasm, IQ and the attitude that makes the difference. I’ve worked in development companies with <10 developers 20~40 developers and now working in an organization which has 2500+ developers. The most brilliant people I ever saw in the industry, works here. That’s because only an organization of this scale could be a breading ground for such talent.
It is true that at the level of code writing - the developers of a small or medium scaled company have a greater exposure than the developers of a larger organization. They get to design their own applications, choose their own technologies and so forth. I still believe my 11 months with my previous employer which was 20~30 strong at that time really pawed my application design enthusiasm. (When ever I meet our old boss, - who also works where I work now! - he asks; “So Mahasen, are you in to architecting now?” my answer to that has always been “No Sriyan, I have a long way to get there”) Had I directly started at this company, I might not have had that same opportunity. And in that aspect I do agree with koolb. But, I strongly felt the lack of a systematic approach and the room to grow in a small-medium scaled organization.
True it’s a slow path to be in a larger organization and to grow, but I have seen what that year after year of long systematic project experience at enterprise level fuelled by enthusiasm and correct attitude could create. So I’m willing to go through it as well.
Towards the end, he mentions about a software engineer he interviewed, who’s from a larger organization. May be that lack of enthusiasm and knowledge is the exact reason that forced him to seek employment else where. To add to the other side of the story, I have seen associate software architects and software architects from so called medium scaled companies coming for interviews in larger organizations and failing to meet at least senior software engineer standards. I guess that explains the situation much better. It’s not the ground level engineers that make the difference to a company’s quality of work, but of the architects and project managers.
To come back to outsourcing model that koolb discuss, his description is limited to the model which most smaller and medium scaled companies without a proper process or a proper business standard engage. But the larger organizations and some medium scaled organizations adopt much more beneficial and challenging models. Their quality of work and standards gives them the liberty of accepting work only that would be leverage within their standards of work and still be strong in the business. The operational model of such outsourcing is worth discussing here, perhaps in another comment when I could spare another half an hour.

Anonymous said...

I think this is total BS. Have you been working in this company for long? If you contact some of the past employees of your company they will tell you the story. Understand how they have been hiring and firing people so far. They just killed the whole IT industry in our country. Everything there is based on how well you can play politics. The bureaucracy is to the ultimate. Few years ago when I was in the university final year, there were people in queues to join such companies. But this company is no more the best company to work with. IT professionals out there understand that. Im sure you agree with me. There are so many good Small and Medium US companies in Sri Lanka now to work for better salaries, better freedom and lot of work pleasure. You are talking about the industry professionals failing your interviews. Do you know how many people who have been known as failures in the industry are recruited by your company very happily?. Working in a process like yours is no better than working as a bank cashier. When you spend few years in such a company you are not competent to join any other company. I think this previous comments I saw here explained that well. At least 90% of developers will prove the factor. Ultimately you have lost a lot. I have experienced that by myself and I’m talking based on my true experience.

D. J

Thushara Wijewardena said...

D.J, Comments like this will not be entertained in my blog., Any company will hire and fire employees based on their performance and that’s a business we run. Every company practice processor to some extend. It’s vital to have some sort of process than everybody is acting like headless chickens. But the question is up to what extend you implement the process., that depends on your business model and the company culture. May be your comments are honest. But this is totally out of my interest.

Actually this post is also out of topic. But I just posted it as I found it interesting.
But now the comments are deviating from the original post.

Mahasen I find your post interesting., Waiting to hear about the operational models you mentioned. Im sure these details will help all readers.

Mahasen on 5:46 AM said...

D. J. :
I do not want to defend the company I work for as I’m writing my own thoughts here. I have challenged and criticised my employer openly more than once. Different people have different perceptions and aspirations.
I agree there are companies which pay much more than us. And I also agree to the fact we have hired industry failures. If you think a process makes you restricted and make you an assembly line worker - then that’s your exact problem - attitude towards work - you’ll make nothing out of a process but the exact same as you describe. Since this is not the correct forum for this discussion, and I’m open for it, I’d like to invite you for the same discussion in another forum of your choice. But be prepared for late posts as I’m running on a busy schedule.

Thushara : Yes I will discuss the outsourcing models.. Soon.. I promise :)

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