more on Outsourcing to India: All that glitters, or even glisters, is not gold

[Dave Farber <dave () farber net>]

Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Thu, 12 Feb 2004 04:30:02 -0500
From: Marc Aniballi <marcaniballi () hotmail com>
Subject: RE: [IP] Outsourcing to India: All that glitters, or even glisters,
 is not gold
X-Originating-IP: [80.11.108.189]
X-Sender: marcaniballi () hotmail com
To: dave () farber net

Hi Dave;

A few comments on the comments;

Back in my CTO days, I dealt with the outsourcing mess quite a bit. The 
first thing to recognize, IMHO, is that this is not new! It's been going on 
for centuries, just under different guises. Slavery itself was, in effect, 
a form of outsourcing.

To address a few of the issues pointed out below and previously;

1)    "Programming while you sleep," only works for the CEO (maybe). For 
starters, the problem of messaging lag was resolved ages ago. For those 
seeking the coding around the clock solution, there is a minimum 
requirement of 3 programming sites, with 4 being preferable. These sites 
are relatively evenly distributed around the globe to allow for “follow the 
sun” project management. In this way, no one needs to keep a blackberry by 
their bed, or constantly check their inbox to see if Bangalore or Shanghai 
or Rabat are having issues. One timezone shuts down as soon as the next 
time zone is up and running (ideally with a couple of hour overlap.) This 
protocol, along with point 2, can create a smooth and workable 24h hour 
coding operation.
2)    If you are serious about outsourcing in the long term (as an ongoing 
operation), then you need at least one person at each site who knows as 
much about the projects at hand as you do. Whether this is a dedicated 
technical account manager supplied by a third party, or one of your own 
hires who LIVES in country and works at the remote site. This person is the 
local “copy” of you while you sleep, play, attend meetings, or visit Betty 
Ford. They take part in all the planning sessions (global teleconf. 
roundtables – usually weekly) and everyone meets once a month in person on 
site. (changing sites for each meeting also provides ancillary management 
benefits).
3)    Points 1 and 2 do not necessarily require you to go offshore, you 
could just as easily do this in one country at a single site, with multiple 
shifts (nothing new here). The management technique would be the same – 
only with less long distance (Although the long distance argument is 
specious, most serious outsource relationships use VOIP for virtually 
“free” LD).
4)    As mentioned in another response to this thread, management has a 
fiduciary responsibility to its share/stakeholders to execute the business 
in the most effective manner possible. If properly managed, offshore labor 
can significantly reduce the cost of production. This in turn reduces the 
price to the consumer either immediately or in the near future through 
entrepreneurial arbitrage. This is good for the consumer. It also provides 
more motivation to the company to innovate and create true value, rather 
than simple operational advantage.
5)    Unless I completely missed the boat, the WTO is all about creating a 
global free market in goods and services unhindered by nationalist 
protectionism. Many have complained that it would be America “walking all 
over the rest of the world.” In fact, as we can see, you win some, you lose 
some! Some American businesses are benefiting greatly from world trade, 
others are finding that they can’t compete.

As a general overview; I would like to comment (as a non-American) what I 
believe to be the case/issue here. America became the super power it has 
become through two key differences with most other countries in the world. 
First, “the American Dream,” which is a euphemism for, “Get OUT THERE, and 
DO IT!” Believe it or not, this is a rare way of thinking in the world as a 
whole. American innovation, or should I say HYPER-innovation, over the last 
100 years or so has accelerated the “value” of the country far faster than 
any other in history (to my knowledge). While labor has been the bedrock of 
the society until recently, it is fading. Just look at the statistics. 
Americans need to innovate, create new industries, lead the world (as they 
have in the past). Programming (the outsourced kind) today is what assembly 
line work was in the 80’s – It is too expensive for companies to compete 
with lower wage countries, so either quality suffers, or the company finds 
a way to replace workers (Automate or outsource). We can’t automate 
programming (yet), so when faced with competitive pressures, we outsource. 
This is a GOOD thing. From my perspective as a manager, I would rather be 
hiring American out-of-the-box engineering/creative types to dream up new 
ideas, than hiring (relatively) expensive code monkeys. That is not to say 
that programming skills are no longer important in America, but more 
closely, they are a base requirement – Like the ability to use a mouse or a 
keyboard.

America used to be (are they still, I don’t know) a magnet for those free 
spirits who wanted to stretch the boundaries. They came first for higher 
education, then stayed because the environment supported and encouraged 
wild ideas both commercially and academically. The alarm bells are already 
ringing in the academic circles, I hope they are heard. Outsourcing is not 
the act of a Benedict Arnold, it is the act of a Patriot. Someone who does 
not want to see America weakened through a decrease in innovators and an 
increase in functionaries.

Just a few Canadian pennies’ worth . .

Regards,

Marc Aniballi

-----Original Message-----
From: owner-ip () v2 listbox com [mailto:owner-ip () v2 listbox com] On Behalf Of 
Dave Farber
Sent: February 11, 2004 2:30 PM
To: ip () v2 listbox com
Subject: [IP] Outsourcing to India: All that glitters, or even glisters, is 
not gold


Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Wed, 11 Feb 2004 13:21:40 -0500
From: PAUL JULIEN <p.julien () worldnet att net>
Subject: Outsourcing to India: All that glitters, or even glisters, is not gold
To: dave () farber net

Dave:

New take on the benefits of outsourcing of computer programming jobs to
India - a fragment from a BusinessWeek magazine article.  (I reformatted
into bullets.)

http://yahoo.businessweek.com/smallbiz/content/jan2004/sb20040112_0920.htm

... One important lesson he had learned working in a large high-tech company
... was that the benefits of outsourcing of computer programming jobs, as
currently practiced by large corporations, are often exaggerated.

"There were too many headaches in dealing with India," he says, recalling
his experience overseeing such work.

a) "We often got spaghetti code that was functional, but couldn't grow.
b) We had no idea if delivery dates would be hit because they would freely
give promises, but not results.
c)  The time difference was very difficult.
d)  The explanation, 'They program while you sleep' doesn't hold water. Too
often, a problem would arise and they would respond the next day with,
'Well, we weren't sure what you wanted to do' -- and a whole day was lost,
time and again. Before long we were four months behind schedule.
d)  It was also very difficult to remotely manage a project unless you had a
very strong infrastructure over there of U.S.-style managers.
e)  Finally, the rising costs over there make it tougher to justify."   ...
(End of BusinessWeek excerpt.)


It's always best to GOTO Shakespeare in these situations:

... [He unlocks the golden casket.]
PRINCE OF MOROCCO.
O hell! what have we here?
A carrion Death, within whose empty eye
There is a written scroll! I'll read the writing.

      'All that glisters is not gold,
      Often have you heard that told;
      Many a man his life hath sold
      But my outside to behold:
      Gilded tombs do worms infold.....'
ACT 2, The Merchant of Venice


Dave, we produce lots of nice spaghetti code right here in the U.S.A.,
that's not a problem
unique to India.  But most telling, I think, is point d), the management.
Having bright young
Indian kids cranking code for 5 bucks an hour is one thing, but maintaining
all the
simultaneous internal communications channels required for the management of
complex systems design and development projects is quite another.

Also, if " They program while you sleep", then aren't they home sleeping
when you're programming and you want to talk to them?  Oh, I see, we use
e-mail and voice mail, OK.  Yeah, you know, that's my problem, I'm not
getting enough e-mail and voice mail, I need some more.

Also, what do the Indian project workers do on Monday in India?  During the
day there on Monday, it's late Sunday eve - wee hour Monday morning in New
York.
Do they work from Friday's instructions?  When are Friday's instructions
given to them?  Arriving in the New York office at 9am on a Friday morning
we notice it is 730pm Friday evening in India.  Do they hang around in New
Delhi on Friday evening-after midnight Sat morning, waiting to get the
instructions for the work they will perform on Monday, or do they just come
in cold on Monday morning and collect the messages?  At 9am Monday morning
India it is 1030pm Sunday NY.  So India can't call anybody in NY at that
time.  Hope those instructions are perfect.  Hey, what's the long-distance
phone bill on these India projects?

Now someone might say that the Indian contractor will just run a night shift
in India, solves all these problems.  But that's not what's advertised in
the pitch.  What's advertised is that they are programming while you are
home snoring, and the conclusion you are supposed to jump to is that this
somehow creates a new heretofore unavailable double-folding efficiency.

Let's examine this Thru-The-Looking-Glass work arrangement more closely.
Say that at noon on Monday I e-mail them a description of a task that I
believe to be a 1/2-day job.  They receive it 5 miliseconds later, but it
says 1030pm Monday on their clock, so they are not in the office (I assume).
They begin work on it at 9am Tues India  = 1030pm Mon NY.  They immediately
have
a simple question: do I want this new module to be constructed by modifying
a copy of OE1446, or use version 2 of OE907?  I blew it, I forgot to tell
them.  They have emailed me this question immediately because they are smart
enough
to know that they can't start work without this information.  My computer
receives this question with great efficiency and perfect accuracy 5
milliseconds later, at 1030pm Mon NY.  Funny thing, I'm not in the office.
I arrive in the office 9am Tues NY to find their message.  I immediately
e-mail them "Use OE1446."  They receive this instantly, at 730pm Tues India,
and no one is in their office.  They begin the task promptly the next
morning at 9am Wed India, and finish at 1:07pm Wed India (seven minutes for
lunch) = 2:37am Wed NY.  I find this finished result when I arrive at 9am
Wed NY.  So it took from noon Mon to 9am Wed = 45 hours wall clock to
complete a 4 hour task that had a single 30-second question?  How much does
that cost the U.S. operation?

Oh by the way, they have to bill you for Tuesday India.  See, you had them
stymied all day Tuesday waiting for an answer and they were unable to do
anything
else, and they have to be paid for their time.  They didn't dare go ahead
because the last time they did that and produced something ugly you screamed
at them "IF YOU HAVE A QUESTION, COME AND ASK".  Don't sweat it - it's only
32 hours billable: 4 programmers  X  8 hours.  What?  It was going to take 4
big programmers to do the little 4 hour task?  No: 3 other programmers were
hung up because the 4 hour task question was not resolved, so they also
could not make forward progress on their tasks.

They must be licking their lips in India.


Paul Julien



*

-------------------------------------
You are subscribed as marcaniballi () hotmail com
To manage your subscription, go to
  http://v2.listbox.com/member/?listname=ip

Archives at: http://www.interesting-people.org/archives/interesting-people/

-------------------------------------
You are subscribed as interesting-people () lists elistx com
To manage your subscription, go to
 http://v2.listbox.com/member/?listname=ip

Archives at: http://www.interesting-people.org/archives/interesting-people/