Stef rants about offshoring
5 Sep 2004 08:12 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
firecatOn a tech writing list I read, someone said that any company which is primarily concerned with the Bottom Line (profits) would consider the question whether to send jobs overseas "a no-brainer".
In my opinion, it's not really a no-brainer at all, even if your primary
concern is profits.
I've been working in the corporate world for a couple of decades and
I've seen companies decentralize and centralize over and over, in a
regular rhythm, like breathing. Neither option is perfect and the latest
crop of executives keeps thinking the grass is greener on the other
side.
Offshoring is an extreme form of decentralizing. I've seen
decentralizing cost huge amounts of money in terms of communication and
efficiency - partly because even though there are lots of ways to
communicate around the globe now, face to face meetings and product
inspections are still the only way that some things work well and still
the only way some people are comfortable working.
Another part is that when a company decentralizes, it has less control
of a lot of things (the management layers are less in touch with layers
in other countries, even if they frequently visit; another government is
sticking its nose in*; sometimes sensitive information gets into the
wrong hands** and so forth). And when companies do poorly, one
thing they often try to change is to bring everything under tighter
control.
I predict that in a decade or so there will be a lot less offshoring,
especially where sensitive information is involved.
Unfortunately, this probably won't be soon enough for many career tech
writers.
*Right now there are apparently some new government elements in India that think US offshoring of jobs to India is not a good thing for India. They could make things harder for US companies, to the point where some companies pull out or scale back, either because of their meddling or because they are worried about government instability in general.
**There was a news story a while back about a hospital that was
offshoring some of its medical transcription, via a US subcontractor.
The subcontractor stopped paying his transcriptionists, and one of them
blackmailed the hospital saying she would make medical records public if
she didn't get paid. She got paid. But this is the sort of embarrassment
that companies really don't want.
In my opinion, it's not really a no-brainer at all, even if your primary
concern is profits.
I've been working in the corporate world for a couple of decades and
I've seen companies decentralize and centralize over and over, in a
regular rhythm, like breathing. Neither option is perfect and the latest
crop of executives keeps thinking the grass is greener on the other
side.
Offshoring is an extreme form of decentralizing. I've seen
decentralizing cost huge amounts of money in terms of communication and
efficiency - partly because even though there are lots of ways to
communicate around the globe now, face to face meetings and product
inspections are still the only way that some things work well and still
the only way some people are comfortable working.
Another part is that when a company decentralizes, it has less control
of a lot of things (the management layers are less in touch with layers
in other countries, even if they frequently visit; another government is
sticking its nose in*; sometimes sensitive information gets into the
wrong hands** and so forth). And when companies do poorly, one
thing they often try to change is to bring everything under tighter
control.
I predict that in a decade or so there will be a lot less offshoring,
especially where sensitive information is involved.
Unfortunately, this probably won't be soon enough for many career tech
writers.
*Right now there are apparently some new government elements in India that think US offshoring of jobs to India is not a good thing for India. They could make things harder for US companies, to the point where some companies pull out or scale back, either because of their meddling or because they are worried about government instability in general.
**There was a news story a while back about a hospital that was
offshoring some of its medical transcription, via a US subcontractor.
The subcontractor stopped paying his transcriptionists, and one of them
blackmailed the hospital saying she would make medical records public if
she didn't get paid. She got paid. But this is the sort of embarrassment
that companies really don't want.
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no subject
Date: 6 Sep 2004 08:39 am (UTC)According to Capers Jones' (http://www.amazon.ca/exec/obidos/ASIN/0201485427/qid=1094484550/sr=1-4/ref=sr_1_0_4/702-3477354-0941657) work on benchmarks, the average cost per function point of a North American software development shop is about US $1000. The "best of breed" (i.e., the cheapest) cost per function point comes from countries like India where the cost is around US $100. (I will say, however, that I haven't seen his research updated for the naughts).
At those rates, a company can afford to have three outsourcing projects doing the exact same piece of work, and if two fail... well, that's just fine. It's still considerably cheaper.
I do think that there'll be a period of resistence to offshoring (and nearshoring, which Canadian firms have been experimenting with), but in the long run, a lot of jobs are going to disappear to other countries.