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| This is a personal blog of Yakov Fain My son's animations and music No BS IT podcast Америчка |
During tough times, large US corporations try to find ways to cut expenses. All of a sudden, you don’t see those people who were watering plants on your floor. Then, the access to the drawer with office supplies becomes as restricted as getting to a safe deposit box in your bank.
The other day I met an employee of a large corporation, and she told me that her manager didn’t allow her to send a delayed report via Fedex because it was more expensive than using US priority mail.
The training budget gets circumcised next.
During the crisis times people start worrying about executives’ bonuses and try to take their corporate jets away.
But there is one expense that these jetless and bonusless executives don’t want to discuss. Yes, I’m talking about the money spent on offshore software developers.
I spoke to an employee of a huge corporation - he goes through an annual performance review and was punished for not keeping the offshore consulting team busy when they didn’t have anything to do! No, they are not allowed to cut this umbilical cord. The management keeps lying that offshore development is cheap. They keep covering up the facts that the programming quality is poor and their US-based employees have to quietly re-do the assignments received from overseas. This subject can’t even be discussed. The big shots made their decision many years ago: hiring offshore teams is good. Case closed.
I'm a partner in a small company, and we also work with offshore programmers. But we don’t work with teams, we work with individuals that we like and need. Every morning, I spend a couple of hours on the phone with our developers working overseas, and trust me, as soon as I’ll see that they either not deliver of don’t have work, they will be gone.
Large American companies don’t have this luxury and keep carrying this unneeded cargo. Dear CEOs and CIOs, corporate jet expenses are peanuts comparing to the amounts of money YOUR corporation loses because of wasting money on low quality offshore “helpers”. Your mid-level managers will keep lying to you that “our offshore partners are profitable”. They keep waving flags that read “Can’t beat $15 per hour”. Lie. In many cases people getting these $15 per hour just don't deliver, are underutilized, and work productively only 5-10% of their time!
Let’s do some math. Say, one offshore programmer costs your organization $15*8*40=$600 a week. It looks cheap. Ten programmers cost you $6000 a week
In the best case scenario, only 3 of them are good developers and deliver. If the rest of the team that you are forced to work with is just taking your time, requires writing more detailed spec and delivers poorly tested code, this means that you are actually paying $6000 a week for the work of three developers. Each of them costs $2000 a week, which translates into $400 a day or $50 an hour.
There is so many great developers in Texas, Colorado, Utah, Georgia that will be happy to work for you for $50 a hour!
My hat off to IBM that demonstrated ultimate creativity. If you work for IBM in the USA, get prepared to get shipped to India. You've heard it right. They call it Project Match. If in the past century there were companies who were helping, say a white male to find a perfect match among black males. IBM will find a match between you and a third-world country. They'll also match your compensation to level it up with salaries of people around you. Sure enough, your cost of living in India will be lower than in New York, but you'd better not plan to come back home with those savings you'll make in Bangalore.I smell a mismatch here...
Three years ago I’ve written an article “What CIO Should Know about Outsourcing Enterprise Java ”. Forget about Java – it’s happening in any large IT organization regardless of what programming platform they use.
I wonder how deep our economy should sink to force executives cutting these large offshore vampires loose?
twitter.com/yfain
Yes some programmers are of low quality I do agree but we cannot generalize
the situation and confirm that All Indian programmers are of low quality.
I perosnally held high level positions in USA/Europe/Far East but none
complained about my quality of work.I am in touch with my managers and they
always thank me for my past work.
Never did thet re do their Software they used as it is.
You are free to convince people in USA not to hire Indians.It is upto you.
Don't put words in my mouth. I did not say that all Indians are poor
programmers. As everywhere, by the 80/20 rule, 80% of them are from poor to
mediocre. These are the people who are not needed for US corporations and
we need to openly admit this and cut them loose.
Dear Yakov,
Agree, outsourcing will remain a part of our life, but my main message is
to cut loose those foreign workers that produce bad jeans and toys with
defects. A good businessman wouldn't keep them on payroll as many large US
corporations do.
I recommend that each Offshore developer needs to be interviewed by an
American Techlead to find Offshore developer's technical stuff. I believe,
this will solve American company's goal also reduce real estate price in
india.I believe that the next sub-prime tidel will hit india soon.
Exactly. It's a paradox - here in America, each person who applies for a
job has to go through the set of interviews. On the other hand, in large
corps a project manager can be given an offshore team - no interviews,
nothing. Just simply, "This is our partner team. You will work with them."
@Muthu
If we talk about jeans ... I remember the jeans made in the USA from
Texas's cotton and flax, the ones I can use for several years without the
need to repair. For some reason, the China-made pair of jeans from Chinese
cotton and rice paper can't survive even a half of a year of moderate use.
So if you calculate TOC (total cost of ownership) for a period of several
years, than US jeans are preferable. The very same is true for IT industry.
A final commit of initial software version to the code repository is just a
beginning of software lifecycle.
Valery,
