That’s hilarious, outsourcing is an unfortunate reality in today’s IT world.

http://www.whatshottoday.com

really funny and thinkabale….for new startups.

I seriously believe that if you have an innovative and new idea you need your developer within reach (to slap around) and not 3000 miles away from you. Sometimes I propose something and judging by the look on a developers face I understand that this is not a good idea. Stuff like that just won’t work if you email someone specs.

Thanks for the post, funny how this seems to be a new trend, while I remember a podcast at the Churchill club (I believe Guy was presenting) where a lot of startup people adviced to not outsource so much..

I was wondering btw, did you mean illumobile.com?

Duncan ,
Slideshare was not outsourced . they have a Captive Developer base on their own payroll in india . they might have offshored their job to their indian Team . but this is not outsourcing .

Programming like many other time intensive activities have found their niche in the developing world… do you actually think those national “year end corporate tax verifiers” are in the USA? It’s all being shipped right to India and many other places.

Jon
http://buzvia.com - Share Influence

Haha it’s so funny

Good stuff!

Given that almost everybody is your digital neighbour these days, the concept of distance is dead per-se in the era of internet. It’s just a mental block that distance is a inhibiting factor when it comes to giving shapes to ideas. One can get the best of talent from anywhere around the globe who are no less than their peers from western hemisphere…

If you are making just another me-too startup, outsourcing can help you get there quicker. But if you plan on making something original do you really think legistlation in third world countries will provide you with any protection? Think again.

A lot of the problems with outsourcing come with not having an experienced project manager on the job. People seem to forget that the scope of the project needs to be very detailed.

One of the problems I’ve ran into when coming into companies who have outsourced is seeing extremely sloppy code. There is no reason to have 30,000 functions that pretty much do the same thing. If it is managed properly, a lot of the problems can be nipped at the bud.

@10 - You make a very good point. I sometimes think about outsourcing some of my stuff but have seen deals gone bad.

My sincere advice for all small entrepreneurs is , DO NOT OUTSOURCE YOUR WORK TO INDIA. India’s IT system is big fluke and fake.
I outsourced my web application to India for $14,000 and after 6 months , I lost my advance money and time. Now I am paying my American friend $6000 for same application and we meet every weekend to discuss progress.

I think outsourcing works better for big players.

Btw , I born and brought in India.

i used to always outsource and India’s finest are often liars. Never complete on-time and never honest.

When quality is of secondary importance, outsourcing is a viable option.

Funny cartoons though!

@12 - Do you think you will get more credibility to your remarks “DO NOT OUTSOURCE YOUR WORK TO INDIA” by saying that you are born and brought up in India?

Please don’t generalize and give suggestions on your personal experience (not that somebody will seriously reply upon your suggestion).

Think about it if somebody else tells your customers DO NOT USE PRODUCTS OR SERVICES BY INDIANS.

If you don’t have the skills to get the work done by outsourcing, you are bound to fail whether its outsourced to India or America or next door.

ROTFLMAO…..Brilliant!!! :)))))

I’d say outsourcing (or offshoring) is more of a fortunate reality than an unfortunate one. And should you really care about the protection you get in third world countries? Do you think your idea is that original anyway? Guess what, it isn’t. It is your execution and vision as a business that matters, not your code base. You could hand Facebook’s codebase to 100 entrepreneurs today and you would probably get 100 failed start-ups.

To all you outsourcing haters,

We are coming to conquer and we will rule - Your only options besides us are…
1) To get VC money > Hire the best > Success : Exception is Edgio
2) Do a nice 9-5 job > Save > Burn on costly payroll > Start 9-5 again
3) Do it all yourself - like plentyoffish > Huge success you bet!

Just think in a practical manner guys - Is it worth spending your life’s fortune on typical american employees(exceptions are there!) who just work 9-5 and will jump on another startup before you ran out of money ?

Outsourcing is like an atlantic ocean wave..you can only withstand for certain time but you have to backoff.

Market share for outsourcing is increasing / will increase for a reason - It’s not just few ppl - it’s movement. We are living in a time of change - Don’t complain, be prepared for it.

On a personal note : Those who have had bad experiences with outsourcing firms, I feel sorry for you but don’t try to spill the beans. Sometimes I think that you must be fired during dotcom boom(any race) and haven’t been able to get a tech job.

Does anyone know who the company is sourced the $45k/yr PHD resources? I might be curious. From the blog:

“Naturally it’s a cost thing. I spoke to one startup CEO last year who hired five programmers in India who had PhD level qualifications for $45,000 a year each, and the company he used to hire these guys came with a long list of US, English and Australian based startups currently using their services. I’ve even heard that some VC’s now look for outsourcing strategies in business plans and even recommend startups go down that path to save money, particularly when they’re starting out.”

@17 - Very well said..

Thanks to MA for bringing this to us…
From..
“The Man In The Arena” by Theodore Roosevelt - 26th President of the United States
Speech at the Sorbonne
Paris, France
April 23, 1910

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

@19

He said ‘Naturally’ - There are many things Duncan may think naturally which may not be natural in reality.

@13 - You mean the ones you hired from odesk at $4 per hour ? Asshole…

@10 - Sometimes in worst cases, we atleast expect from you to have enough dollars so you can visit India and hire a US attorney who can talk to our attorney and give you advices.

I wouldn’t recommend outsourcing, these guys will promise you the world to get your contract then screw around and all you’ll do is lose time. Already lost almost a year and quiet a bit of money and the project is only about 10% complete, and its the equivalent of a hello world application at this point.

@ 24 - Get a life…

Not bad at alll. Will give it a try.

If you’re looking for serious technical work, stay in India. However, if anyone is looking to outsource work that involves customer interaction, go to the Philippines.

We currently work with a couple Web 2.0 companies as well as more traditional non-internet to outsource their marketing and customer service to our American-owned and managed facility in the Philippines.

The reason why outsourcing doesn’t work well most of the time is because of the huge gap in expectations. Americans expect one thing and the workers overseas deliver something else. The best way to bridge that gap is to work with a local American company (we’re in San Carlos, CA) who knows how to operate effectively in that environment.

You’ll get the best of both worlds - you’ll not only save money but can sleep well at night knowing that you can pick up your phone and call an American if you have 3am jitters about your outsourcing project.

I’ve seen companies go to extremes to have Americans fly over no matter where they are on earth.

Outsourcing labor - $50,000

Having the person there in your team that understands you and your culture - Priceless

Guys, i’m the manager of a small web development team, and we’ve been doing production work for a couple of years, mostly with US based companies. (we’re based in Romania).
Here’s some thoughts on outsourcing:

- if you view your production team as cheap labour code monkeys you will get screwed. If you can’t view them in any other way, hire the best Project Manager in the US you can find, otherwise your project will go down the drain.
- try avoiding companies that promise the world for $10/hour. you won’t get anywhere
- if the posibility is there, meet with the outsourcers in person, sing legal agreements
- we’ve had trouble cooperating with 80% of the Indian companies we had to work with in the past. I don’t want to trash india, met some great and competent guys there, but sometimes the cultural gap is too wide.
- personally, i’ve always tried to add value to the projects we worked on, and not follow instructions in a dumb way. Listen to the team you are working with, sometimes they have better ideas than you have:)
- outsourcing is just capitalism at it’s best. this is the global economy, you try to get the best quality for your money.
- outsourcing is a way to redistribute wealth arround the globe and tighten the huge gaps between nations. i don’t feel particullary good that i’m looking at my huge wide screen monitor while some poor african kids starve to death. I hope globalization will be able to help them too in the future.

@27 - having a local presence only helps if the local guys are also writing code. Otherwise, they’re too detached, and you don’t get the important interaction Boris mentions.

Local outsource agents are too often just sales guys, or engineers who aren’t connected to their overseas project teams. If your local engineering lead isn’t visiting his overseas team at least 4x/year, you’re better off going direct.

@Manju

Do you feel like threatening the great stories of cost savings in billions of dollars just for your 14000 pea nuts? It requires some maturity to understand what to outsource, and what not. Just because you are born in brought up in India, your comment doesnot get more positive attention for sure. How does it really matters if the company is big or small when you are doing for the sake of talent and money savings? I fail to understand your logic here.

Outsourcing can help you get started, but never assume you don’t need to have an expert close to you that chan check the quality of the code. Especially for anything not Java or C. If you are looking to India for experience on things like Ruby on Rails, you are dreaming. D-R-E-A-M-I-N-G.

If you don’t keep an eye on the code, you’ll get feaatures that appear to work OK, but with twice the code, and poorly written code. Then you’ll have an enourmous debt of bad code that causes problems with every successive feature you try to implement. N-I-G-H-T-M-A-R-E.

In India the culture is to put 1 man and 1 hatchet chopping one treee for one month, then everyone eats. Not so good for your code or your company. Teams in India will work their ass off but are only capable of following a paint-by-numbers programming method. No innovation. Try Agile, and they will give you waterfall. Try inovation, they will give you yesteray’s interface.

Learn the hard way if you really want to, but one great programmer hired from the open source community with proven experience and an ability to innovate is worth an entire team of 5 - 8 programmers in India.

Your mileage is not likely to vary

@30 - Not always - $49 per month Gotomeeting Plan and $30 a month VOIP at India office will end up in may be one visit a year.

The best way to find out if the person you are dealing with here in US is genuine or not is by asking them do you do a full-time job somewhere. If the answer is ‘Yes’, think twice. Call them during a day like 4 times an hour and see if he picks up your phone(pay them though! If he picks up your phone most of the time, you have got a genuine person.

@29 - US to Romania to India..LoL…

What I don’t understand is Bay Area companies outsourcing to India when they could save a truck-load of money just moving their company to a lower cost area within the U.S. The tax savings alone (not just for the company, but the employees as well) would be a boon. Employees could afford to buy houses even if they made lower salaries than they were making back in the Bay Area.

In the internet age, when a company can be located pretty much anywhere, why do we insist on living in some of the most crowded, expensive parts of these United States?

I currently live in Fort Collins, Colorado. It’s a beautiful city. Skiing is little more than an hour away. The school system is great. Office space and housing are much cheaper than in the San Francisco area. And you can find talented employees here, many of whom have previously worked for HP or Kodak or some of the other big name companies in the area.

@ 32 - Read this article

http://www.zedshaw.com/rants/r.....hetto.html

It describes father’s experience with his sons. It’s right from Zed Shaw - Father of mongrel. R-E-A-D what he says about how immature rail community is…

Go with PHP…With ror, you will have tough time even in US.

@34 - May be finding lower cost area in US are easy but good developers in US at good cost - Not easy at all. Those stories you are talking about may appear on CNN once a year but that’s it..it’s like spending one hour in a year on SecondLife and expecting secondLife in real world.

Not a surprise when we listen to the likes of Lou Dobbs and the phobics on immigration in North America that we are going where the talent is as we don’t let the talent come to us. The IT age is still dealing with the 50’s manufacturing age which has almost disappeared with the rise of the new economies. Smart economics takes us to where the best price/quality is.

@10, 11…

Never outsource “core product” development anywhere to avoid the situation described in #12. Hire local devs in US , easier on both PMs, better specs and code, … even if local devs are Indian origin!!

@ 38 - Better to find a tech co-founder. Employees are employees - no matter where they are.

I have been using outsourced developers and local developers for over 4 years. Definately if you are outsourcing to a company you have not dealt with before (from guru or elance), there is a chance you can get burned. Heck, even some programmers and designers who i have hired locallly who charge $80 - $120 in the course of 4 years have great disappointed me. Some local developers and designers could talk really well but could not show that in their works. In fact , a number of them, even charged for their talking

Anyway, the best way to outsource is to hire a team and physically train them. That way, they are able to meet your requirements on every area. Over the course of few years, you will be able to distinguish who are good developers and who are just talkers. And you will also know all the excused used by contract / off-site developers. Another effective outsourcing tip is, have a good project manager both locally and abroad. That help communication greatly.

To say outsourcing is bad, shows lack of experience. Outsourcing can be a great asset for a company if they know how to do it. You either invest money to get local programmers or invest time to train and research outsource programmers. If you can do both, you can effectively run a 24 hour development schedule.

http://digg.com/tech_news/Sign.....cing_Humor

It has been Dugg

King could you please post more and argue with every single person’s counter points?

Thank you.

I agree with Chris.

We’ve outsourced over a dozen projects in the last 18 months. From Rails to Flex to WPF, we’ve done it all! Heck, the latest project I’ve outsourced is a Facebook Application (sorry can’t give it out yet).

If you’re going to rent a coder , chances are your project will fail. If you don’t have any referrals and are compelled to use oDesk/eLance/RAC, at least pick a Power seller.

Pick the right team (whether local or outsourced)! Companies that use the word “fine” or “we do it all” are the ones that screw up, and it has nothing to do with them being in Palo Alto, CA or Bangalore India!

Find the right team to outsource: 5-10 local Project Managers based locally in the US and 20-30 developers in India/Romania/where ever. Don’t sign ur baby up with a one man show or an Infosys army of 80,000 unless you want a Cesarean.

There is nothing better for me to pick up the phone at 5 pm or 5 am and be able to ‘talk’ with a live person who understands the our needs. A 24 hour dev cycle has improved our productivity and scalability dramatically.

It’s not a perfect analogy, but I heard an Outsourcing Guru compare it to shopping on eBay. The rookies usually get fucked while the pro’s come out on top

Go Outsourcing!!

@king. i’m not hearing these stories on CNN. i’m seeing them play out in my husband’s company. they’re currently located in SF, but they’re starting to hire employees in fort collins. it’s cheaper and there’s quality people here, believe it or not.

Has anyone had their idea ripped off from someone across seas after outsourcing their project to them?

I’m just getting into startups and am looking for as much information as possible - Anything from books to sites will suffice. Thanks guys!

For anyone wanting to outsource the majority of companies in India are shocking. You often lose your money.

A good example if a company called VSWORX listed on sites like elance,sl , rent a coder etc. STAY WELL AWAY FROM VSWORX AND A GUY CALLED NILESH SAXENA. They are both very coorporative but once they get your money you are dropped. They are scammers and liars.

Ive found eastern european companies to be more reliable. Perhaps its the fact that they know I can get on a cheap flight and reach them if they rob me and perhaps the legal system in europe is better than in India.

Or if you go for an indian company make sure they have a registered office in the USA or Major European country.

It is great to see this turn into a healthy debate.

Although we do this for a living, I agree with many of the ‘against’ points:

- not everything should be outsourced
- the style of management necessary is distinct, intensive, and requires experience
- you need a healthy ratio (as comment 43 aptly points out, 1 US PM/tech lead to 3 offshore programmers is ideal)

But, it’s important to separate the issues here: a few are cultural, but the vast majority are due to distance and time differences. And, if you are diligent, well-organized, and establish a strong vision, you can build a solid product with a global team.

I think this comment about the IP issue hits the nail on the head (comment 17):
“Do you think your idea is that original anyway? Guess what, it isn’t. It is your execution and vision as a business that matters, not your code base. You could hand Facebook’s codebase to 100 entrepreneurs today and you would probably get 100 failed start-ups.”

Worry about building your product before you worry about protecting it - a good web 2.0 lesson.

We need to end this kind of rhetoric (comment 13):
“I used to always outsource and India’s finest are often liars. Never complete on-time and never honest.”

It’s ignorant (racist) to define a billion people by one person’s bad experience. Every young industry goes through a growth phase during which the bad apples have a field day - remember dot com 1.0?

India is the biggest fluke in outsourcing. They are full of “experts” who can just write up “nice” documents and designs to get you hooked. Then they fool you around by excuses this and that and finally give you a sucky product which they piece together what they have done before. There is no way in the world you will run it as your production code. Money is wasted - sometimes you can swallow this by just thinking of donating it to the third-world country. But your precious time is gone and you are back to square zero - this is the worst part. I think they just have millions of such people who have received very short period of training and get put on the market to fool the simple-minded US people that don’t understand what outsourcing is about. Go for Russia, Ukraine, Romania — they are more honest and qualified. Going for India outsourcing is just like calling your Citibank customer service and getting greeted by an heavily accented India who tries very hard to sound American and claims that his name is John Smith.

comment #48

I guess a couple dozen billion dollar companies, all of the Fortune 100, and some of the most well-renowned engineering schools in the world are all part of that same fluke.

I have a lot of respect for programmers from Eastern Europe - beyond the language issues, they do amazing work.

But it’s 2008: let’s cut the ignorant (racist) commentary and focus on real issues.

from comments like #48, it’s clear to see that racists will be racists no matter what the discussion is.

that aside, india and other nations getting into the arena as of late are like apprentices, and americans and other developed nations are managers. you wouldn’t give a student a full project to hand off to an apprentice, right? and you wouldn’t expect them to get it perfect, correct? they need guidance, but with the proper guidance, you can find some gems.

also the workforce in india is just like that of any other countries — there are lots of bad eggs. but they’re young and hungry and smart — in fact, given their educational system, smarter than americans, especially in science and math. just because they have an accent that’s different than yours doesn’t mean they’re any less. get real.

@ 48 - It looks like you are not able to stay competitive against Indians - We feel your pain but unfortunately it will just grow eventually.

@ 44 - Good for you and good for your clients. Last but not least, good for your husband that he got a wife like you…

@ 42 - Can you please publish a link to your identity? Thank you.

@48 try and google the CEO of Citigroup. You’ll be presently surprised

@45 .. its a very real danger. No first-hand experience but heard many strories during 2004-05 when it was white hot.

Gist of the argument is — Indian techies have a “service (pun) mindset” with little exposure to real product dev. (engineering). They’re still learning but you don’t want that at your expense.

Elance is 10 years old but largely a failed outfit. That model works for small one off stuff of low $$ value. not for mission-critical products.

Indians are lazy sneaky bastards.

I have been using outsourcing for startups since 2002 and it works. But you must have a local team - however minimal and small - and a project manager (local or remote). The issue really is communication.

@53

“Indian techies have a “service (pun) mindset” with little exposure to real product dev. (engineering). They’re still learning but you don’t want that at your expense.”

OK, then go pay 5x more for an american techie. it’s you choice.

@ 53 - I heard many stories also during 1990 to 2008 that clients were unable to pay bills and Indians still delivered products believing in Gandhian ideology

@ 54 - No wonder below message is written on your site.
“…We have closed our operations after 46 years..”

If you take a look at the data a bit deeper, you realize that these new characteristics just reflect the maturation of the outsourcing industry. Yes, outsourcing has grown up. Yes, more and more organizations are using it. Is anybody really surprised at this?

While comparative analyses, like this, help us understand complex movements, they often leave the reader, us, far short of anything actionable. The comparison of Outsourcing 1.0 to 2.0 is no exception.

When I read stuff like this I ask “so what?” That is, what should I do differently now that I know this information? For example, a better comparison would have been to show the differences between the “10 necessary characteristics for successful outsourcing.” At least with that I would know my chances of failure/success in this new world.

Jerry, thanks for the comment.

Overall, I agree - the difference between Outsourcing 1.0 and 2.0 echos the same process of maturation that can be found in several industries. The comparison between 1.0 and 2.0 is what it is: observational.

So, here are a couple of actionable pieces of advice:
http://www.monsoonco.com/blog/.....t-of-labor
http://www.monsoonco.com/blog/.....aks-screen
http://www.monsoonco.com/blog/look-for-no
http://www.monsoonco.com/blog/.....-messaging

That’s a great cartoon. I love all this globalization stuff, and how it’s possible to geo-arbitrage by being located in different parts of the world yet have clients elsewhere.

My situation:

* American white dude born in the US, but has an Indian first name (due to hippie parents)
* Started recently full-time offsite Webapp Dev freelancing so I can travel the world & develop code from anywhere
* Currently working with one Brit who lives in Japan
* Have other potential American clients, who happen to be living overseas right now in Bombay

* Next, I’m moving to a less expensive part of Europe to cut my cost of living by about 40% (not to mention, the awesomeness of getting to live in Europe for a while to see that part of the world)

* Net result: get paid 2x as much (hourly), the first 80k of my income earned abroad is tax free, living expenses are 40% less, getting to travel to exotic lands, not answer to a PHB and generally have a ton more freedom!

Globalization 3.0, baby!

ps. mod +1 for “The 4-Hour Work Week” by Tim Ferris, who talks a lot about this kind of stuff.

Sad. This is about as funny as BC. You all need to get a life

Dear King, just to clear up things, we did not outsource Us->Romania->India (that would be funny indeed).
What i meant is that we had customers that stoped working with indian companies, and we had to pick up where they left off.

In reference to indian companies beeing multi-billion , the truth is there are only a hand full of these outsourcing giants and several tens of thousands of either indian companies doing outsourcing on a 12-50 man team who just individuals.

These smaller players operate from freelancing sites and these are what most people have experience with in terms of being defrauded. Some of these indian firms thus small paint a picture they are bigger than they really are. We the webmasters only have the feedback from freelancing sites and the companies website to go by. Its not like we can just get on a plane for indian as most of the time its money issues that made us use freelancers in the first place.

the big companies like tata and infosys etc have offices in the us which makes them honest. the smaller outfits do not have offices in US or major european countried which means bringing them to court is a long drawn process in indian courts.

I work for a major telecommunications company. And by major, I don’t just mean you’ve heard of us; I mean you use one or more of our services, daily. We outsource quite a bit and we have for a long time. In the beginning, it was a good way to have some tedious coding done by the time you got up the next morning. However, with the increase in outsourcing came a commensurate increase in specious CS degrees granted in India. It became the easy route to a quick American Dollar.

And so, recently, work we’ve farmed out to reputable, well-referenced, firms comes back shoddily done: some simple javascript backend code came back bug-ridden, sans comments, and inconsistently formatted. We spent more hours fixing their poor craftsmanship than implementing and streamlining our interface. And this is honestly the norm for the companies we’ve worked with (our options of limited given the scale and nature of our operations).

So say what you will, King, but every wave has a crest and a trough. The glut of horrible graduates will see to it that the trough of outsourcing is deep indeed.

In 2007, more than $40m worth of projects were completed succesfully by Elance service providers in the US, India, Europe, Russia and other parts of the world. Data and sample sizes large enough to be statistically relevant to this discussion do not support the assertion that service providers in one country are more or less reliable than service providers in another country.

A more appropriate generalization supported by our data, is that buyers who consistently hire the lowest bidders for a particular class of jobs tend to have lower success rates.

Outsourcing, just like hiring and managing people, requires some effort and is not for everyone.

While I can see the near impossibility of paying contract staff in the West the wages they require to continue their lavish lifestyle, I do sometimes wonder when the people who are working in these developing economies will dispense with their Western bosses and start doing all the R and D themselves…

From a biased (obviously) animator in SF

Nice work Sandeep and Aron…

I’ve heard recently about the rising cost of outsourcing…so much so in fact that Indian companies like elance have re-outsouced back to the states. Is anyone familiar with this process???

http://actionstalk.com

@ 62 - You can find as many cases as you want the other way also : Companies stopped working with Romanians and went to Indian for help. Just because handful cases are there, you can’t generalize terms. When 10 citizens in a country with 1M population have flu, you can’t say that whole country is affected with flu. Just like that, look at India’s overall market cap in outsourcing and then you are welcomed to publish numbers.

@ 64 - Bad devs are in every country. Just ask any good dev you know….

@ 66 - The thirst for knowledge depends on the individual and not per country

@12, @13, @24, @48, @54

For all of those who’ve labeled an entire race as “liars”, “fakes”, “flukes”, “lazy sneaky bastards”, “dishonest” people who are “unreliable” and will “screw you up”, this is what I have to say:

GROW UP!!

You’re reading the top tech blog in 2008, and yet you’ve somehow managed to inundate these comments with needless racist divisiveness and a truly impressive ignorance of the underlying issue.

Enlighten your mind with factual data; read about how these “flukes” and “lazy bastards” have made a difference in Technology and the World: http://en.wikipedia.org/wiki/L....._Americans

Here’s just a few from the list:

Sabeer Bhatia, founder of Hotmail (do I hear free email for civilians?)
Amar Bose, physicist and founder of Bose Corporation (anyone say iPod Dock)
Vivek Ranadive, CEO and founder of Tibco Software
Vinod Khosla, founder, Sun Microsystems (Too bad, this fake created thousands of jobs)
N.R. Narayana Murthy, founder of Infosys Technologies
Om Malik, technology journalist and blogger (GigaOM)
Vinod Gupta, CEO and founder of InfoUSA

A few bad experiences on freelance websites don’t justify the cretinous rubbish being posted! So cut out the shallow, facile and ignorant stereotyping and focus on the few selective posts that shine light on the right strategic approach to Outsourcing.

With an open mind and the right technical/management skills, you are poised for success, whether you build your company in the Bay Area or India!

San Francisco or Mumbai, chances are you’ll run into a few (or a lot) of us brown people in your office

- A proud Indian American (writing with an open mind)

@53

There are 15,000+ IT companies in India. Some profess to ‘do it all’. Many specialize. Not fair to paint all with same brush.

There are some teams that do only SEO work, some that do only High end CAD-CAM engineering, many that do ecommerce sites by the dozen daily..

If you want experience and expertise in product development then you need make an effort to find a team that specializes in that area. You may start with a small part of our development and expand the relationship.

Duncan,

I want to point out that SlideShare is not outsourcing. Our team is partly based in New Delhi (the rest in Mountain View). But every person who works on SlideShare is part of the SlideShare team with stock options and all.

rashmi

The second picture is very close to what’s happening now, just don’t agree with some points

“I have a cousin who does that” is not a normal practice if it’s about a contract for $250mln. Instead I would write “hire more in Bangalore”
eLance is not the only site as shown here. Perhaps one of the oldest, but not the oldest. GetAFreelancer.com has lots of good programmers and designers and there are more similar sites.

India is looking a lot better, today. Thousands of developers in India creating value for Western companies. We must understand what India is doing today towards institutionalizing innovation. We do expect to see next Salesforce.com or YouTube from India, in the future.

The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of labor, capital, technology and resources.

With increasing globalization of outsourcing companies, the distinction between outsourcing and offshoring will become less clear over time. This is evident in the increasing presence of Indian outsourcing companies in the US and UK.

The negotiations take the original RFP, the supplier proposals, BAFO submissions and convert these into the contractual agreement between the client and the supplier. This stage finalizes the documentation and the final pricing structure.

At the heart of every outsourcing deal is a contractual agreement that defines how the client and the supplier will work together.
Outsourcing is the need of an hour it helps reducing cost for small budget to big scale companies. There is no point loosing money and not outsource for cheap and talented work force.

There are several reasons to outsource i am listing few of them
* Cost savings
* Cost restructuring
* Improve quality
* Operational expertise
* Staffing issues
* Catalyst for change (The outsourcer becomes a Change agent in the process) most important as far as deals are concerned.
* Reduce time to market
* Time zone (A sequential task can be done during normal day shift in different time zones - to make it seamlessly available 24×7) Important factor for deadlines
* Customer Pressure

“There is strong public opinion regarding outsourcing (especially when combined with offshoring) that outsourcing damages a local labor market” - anyone can easily understand the plights of US labor market but sometimes it’s necessary for a business to take certain steps in order to survive and take care of the share market too.

My point here is if we think about a company and its perspective we should be able to understand that the main goal of any company is the profit making and Outsourcing is giving them an option to make sure they are getting most of it.

As far as India is concerned when it comes to OutSourcing check out the figures below
“For the FY06 financial year the projections is of US$7.2 billion worth of services provided by this industry. The base in terms of headcount being roughly 400,000 people directly employed in this Industry. The global BPO Industry is estimated to be worth 120-150 billion dollars, of this the offshore BPO is estimated to be some US$11.4 billion. India thus has some 5-6% share of the total Industry, but a commanding 63% share of the offshore component. The U.S $7.2 billion also represents some 20% of the IT and BPO Industry which is in total expected to have revenues worth US$36 billion for 2006. The headcount at 400,000 is some 40% of the approximate one million workers estimated to be directly employes in the IT and BPO Sector.”

“Nearly 75% of US and European multinational companies now use outsourcing or shared services to support their financial functions. 72% of European multinational companies have outsourced financial functions over the past two years.

Additionally, 71% of European companies and 78% US companies plan to use these services in the next 12-24 months. Overall, 29% of US and European companies expect to increase their use of outsourcing of financial functions, with spending expected to be nearly 16% higher than current levels.”

What i would like to see in the coming future if India can come up with an idea where they can target the medical patients to come and get the treatment here. This will be a huge sector as medical services in India are much much cheaper than US, UK or Australia.

No wonder India is at the center of a brewing storm in America, where politicians are starting to view offshore outsourcing as the root of the jobless recovery in tech and services. But, if we are talking about Jobless people i would like to know how talented they are? I have never seen any such talented person not getting a good offer.

Still, this deep source of low-cost, high-IQ, English-speaking brainpower may soon have a more far-reaching impact on the U.S. than China. Manufacturing — China’s strength — accounts for just 14% of U.S. output and 11% of jobs. India’s forte is services — which make up 60% of the U.S. economy and employ two-thirds of its workers. And Indian knowledge workers are making their way up the New Economy food chain, mastering tasks requiring analysis, marketing acumen, and creativity. This means India is penetrating America’s economic core

Great cartoon .. and healthy debate with some not needed comments… About oursourcing I think many people or companies try to outsource with just one point in their mind and that is PRICE.. they don’t check out other things (like who are the peoples going to work on it, their expertise, etc ) and when it fails you start to blame the whole outsourcing model.

You just need to know your team, know what you are building and project management skills…

I think comment was needed for the cartoon, which indeed is very humorous but we all have started discussing about pros and cons of outsourcing…

Good Stuff
I think..
Keep going what we have and improve it at certain level, so it
give GOOD result at the end of the day. OUTSOURCING really gives lot of things to india…
BUT…
Needs more and more…
Keep going and doing…
Cartoon shows the scenario. People are commenting about Indian IT market.
NEED to SERIOUS on this. we have to manage INDIAN IT MARKET…

What I laugh at is how dependence is formed by outsourcing, it gets to the point where people are so used to just paying to get something done that they completely lose track of how they’re spending money on some of the simplest things. On elance and similar sites there are people who have to keep putting up projects just to make a few changes because they have no clue what’s going on with their code or how to make a simple adjustment.

The real thing is that Indian IT field is booming, and while they’re doing the programming work - it’s hilarious that US upstarts are so dependent thinking they’re getting the better end of the deal, when in reality the work could have been done cheaper if they did it locally (since upgrades and subsequent changes wouldn’t need to be outsourced in future). India will shoot itself by not using its skill to advance firms and startups within the country.

While the US will shoot itself by bleeding money on things that aren’t wholly necessary - and by too heavily exporting work that could just as easily have been done locally at lesser cost later on (but initially higher cost to train/educate). Poor planning, and greed is basically what it is.

Wow, very Good!!!