The Hidden Cost of Outsourcing 275
Alien54 writes to tell us CNNMoney is reporting that outsourcing may not be as big of a bargain as some might think. From the article: "With consumers enjoying more choice than ever before, evidence is growing that great service is essential for long-term customer retention. To cite just one example, a recent survey of pension policyholders in the United Kingdom found that 75 percent would leave their current provider if they experienced bad customer service."
Dollar is king (Score:4, Insightful)
If this were true, Dell would not be the number one mfg of computers after losing 75% of their base. How many people here have called tech support and gotten someone with a thick Indian accent named "Steve"?
The problem (if you can call it that) is that Dell offers decent CPU's for cheap. Rather it be for the home or business, people are more willing to take the chance on a computer that's $200 than their competitors.
Re:Dollar is king (Score:2, Insightful)
Re:Dollar is king (Score:2)
Guess the figures are right ...
In other words, 25% will put up with all sorts of sh*t. Sounds like Dell's market to me.
Your logic is wrong (Score:5, Insightful)
But since this is nothing new and Dell continues to sell it also means that either this does't happen to a lot of people or people just don't learn.
I buy from local shops and NEVER call in with a problem. I put the defective product on the counter on a shopping day (thursday evening or a saturday) and speak loudly about how I want it repaired or replaced. Works wonders. Over a phone they can and will try to tell you that a brand new HD is supposes to show badblocks or that a single wrong pixel in a lcd is acceptable. It is offcourse. If your stupid.
Re:Your logic is wrong (Score:3, Informative)
So what you're saying is that your local shop sucks, and the only way they'll fix anything is if you embarass them in front of other customers? Have you considered another shop?
Re:Your logic is wrong (Score:2)
I have an Inspiron 8500 and there was an initial fit and finish problem with the case that caused the display to turn off once the Dell video driver was loaded. I spent some time on the phone with them and
Re:Your logic is wrong (Score:2)
I forgot a 3rd problem I had, which was a failed power supply. They overnighted me a new one, and I sent the bad one back in the same box. There was no cost to me.
One thing to note is that I had to pay extra for the in home service, but it was definitely worth it since I use my personal machine both all day at the office and then during the evenings when I get home.
I'm not sure if the
Comments on your Dell problems article (Score:3, Informative)
Windows is no Linux, even with a sizeable collection of free utilities, but you can at least make it palatable.
Use filemon [sysinternals.com] to find the offending process.
My second Dell issue concerns the USB ports. 5 USB 2 ports on the back and 2 on the front, and I normally use most of them -- (1) USB hub for wireless keyboard, (2) USB mouse
Re:Dollar is king (Score:5, Informative)
India is a great place for development,as they have very skilled programmers for cheap wages and "tech speak" has less problems with the language barriers than customer service.
Re:Dollar is king (Score:2, Informative)
everything we've outsourced to india has been slower to develop, buggier, and come with more absolute incomprehensibility of design than anything I've ever seen.
The tech centers we've got over there are so slow as to require us to go back and do the work we would have done anyway, but now two weeks late, plus we have to clean up the mess that was left before. the "skills" we see come out of that area tend to be the skills of someone who spent years reading tech manuals and has no idea
Re:Dollar is king (Score:5, Insightful)
I've seen it both ways. When companies off-shore and go for the cheapest bid, they have the same poor experience as when they hire the cheapest on-shore consultants.
The bottom-of-the-barrel firms offer cheap rates because they pay poorly. Since they pay poorly anyone with a little talent leaves as soon as they have enough experience to get a better job. The only people that stay in these jobs are incompetents.
Plenty of off-shore providers pay well enough to attract high quality talent, and so are able to provide high quality services.
The next time some manager wants to hire an off-shore provider, make sure they understand this and get them to hire a $40/hr firm rather than a $20/hr firm. They'll still save money over the $80+/hr that it will cost them on-shore, and they'll get a skilled workforce.
Your experiences with India have been because of your own company's poor decisions or lack of due diligence. Brown people are just as capable as white people.
India still not stable (Score:3, Insightful)
Not surprisingly, this is having exactly the same effect as it did in the United States during the
Re:I call BS (Score:2)
Your correct that the top people have emigrated, but that is slowly changing, and the quality of the people that you can find in India is improving. In another 5-10 years I expect to see good architects staying in India.
Re:I call BS (Score:4, Insightful)
I used to work for a "Big 6" professional services/accounting firm. I can't even tell you the number of SAP or PeopleSoft implementations this firm bungled with a staff of 100+ on a project all billing at about $200/hr.
Plenty of high priced consultants screw up too.
To make any kind of large scale project succede, you need to 1) look for - and be willing to pay for - good quality talent and 2) watch them like a hawk. Have them deliver early and often, and monitor their deliverables. Yank them out if the project gets into trouble, don't wait until you've sunk two years and $50 million in before you find out they are incompetent.
Re:Dollar is king (Score:3, Interesting)
Re:Dollar is king (Score:3, Interesting)
My intent is not to bash Indians or offshore workers. Prior to us pursuing offshoring, easily half of the people placed as full time hires were Indian anyway, and their status varied from native US citizens, naturalized US citizens, green card holders, and H
Re:Dollar is king (Score:2)
I dropped Earthlink for that very reason. No viable English technical skills, coupled with constantly different answers, plus a total disinterest in EVER getting a known problem fixed, caused me to dump Earthlink as my DSL provider.
They probably do not know why, either.
Re:Dollar is king (Score:4, Interesting)
Yeah, right.
I have gone through this process only to have an agent hang up one me, leaving me to start over.
One time the agent was downright rude a number of times, finally putting me on hold for 20 minutes and then disconnecting. The total call time just with that agent was about 2 hours.
I have gone through tiers of agents only to be told I would have to pay a bunch of bucks (I was trying to get new copies of the original re-install disks). I tried again, went through more hours and tiers of agents, and got the disks free.
I called to extend my warranty. After a long time, I was told that I couldn't. I tried again, different agent, and was able to extend it.
In fairness, though, the people who finally solved my problems were usually in outsource centers in India or the Phillipines.
Dell's problem goes way beyond outsourcing. They have too many tiers of agents, in too many different groups, with too many who can do nothing but follow scripts. They are, in other words, simply clueless about how to do customer service.
Of course, if the Dell products I have had were more reliable, the issue of their customer service would be moot.
I have been a Dell customer for a long time (almost a decade). Only recently have they provided such horrible customer service.
Next time I need a laptop, I'm going to try to find someone who is clueful about after-sales service.
I certainly hope that somebody with some power at Dell stumbles across this threat. And cares!
Re:Dollar is king (Score:2)
I have been a Dell customer for a long time (almost a decade). Only recently have they provided such horrible customer service.
There seems to be a controdiction here. If you've had so much trouble with unreliable Dell products, why have you kept buying from them long enough to see the difference in their customer service?
Re:Dollar is king (Score:2)
Re:Dollar is king (Score:3, Funny)
Are you kidding?!?!
Last time I talked to Dell support, the person on the other end was totally incomprehensible. After many repeated attempts we simply failed to communicate. I think he was from Tennessee or Kentucky.
Re:Dollar is king (Score:2)
Not well thought out. (Score:5, Insightful)
And people often say that they will take their business elsewhere, but then stick to the cheapest vendor when push comes to shove. Self-report is not the best indicator of actual behaviour, especially for a hypothetical.
Re:Not well thought out. (Score:2)
I agree and disagree. Your point's on, but when I'm looking for something to buy, I restrict my search for the best price on an item to very reputable vendors, not the large majority of vendors who are getting consistently crappy ratings at pricewatch or resellerratings. Why? Because if the
Re:Not well thought out. (Score:2)
Re:Not well thought out. (Score:2)
evidence is growing that great service is essential for long-term customer retention
And, for most consumer driven business, long-term customer retention is not even part of the equation. Many companies exist solely to make a quick profit, and have their assets consumed by some other company with similar goals. There's no point in cultivating long term customers for a disposable product line.
a recent survey of pension policyholders (Score:5, Funny)
IP? (Score:4, Insightful)
Ideas are free and universally available (Score:2, Insightful)
They don't need our or anyone else's stinking IP. You've been reading too much western propaganda.
And by the way, "Intellectual Property" is a term created by lawyers for the purpose of getting the different issues all mixed up so that they can profit from "expertly" separating them again. Don't fall for i
Re:Ideas are free and universally available (Score:4, Interesting)
Mmm... no. Sorry.
There are a lot of bright people in China, but there are also a lot of companies out to swipe IP from other countries. The most recent example I've read about is a whole segment of the auto industry over there devoted to copying the designs of companies like Honda and Mercedes.
One of them even stole their *symbol* from Audi, which they slapped on a copy of another manufacturer's car. I thought that one was particularly funny - it reminded me of the bootleg Versace/Universal Studios "dual logo" t-shirts in Kamikaze Girls.
It appears outsourcing isn't as bad as we were tol (Score:2, Insightful)
Re:It appears outsourcing isn't as bad as we were (Score:2)
And I bet that the minute that IT people have internalized that fact the current wav
Improve your chances at a great career! (Score:2)
Try practicing with it on your resume first. Having misspelled words on a resume is the fastest way to a long career in the fast-food customer service industry regardless of your college degree.
Broken Connection (Score:5, Insightful)
Re:Broken Connection (Score:4, Insightful)
Have you ever dealt with a customer service centre which has been outsourced to India?
Even if you argue that popular opinion is 'wrong' on this issue, you must accept that when it comes to customer service, it is the perception that counts.
Re:Broken Connection (Score:2, Interesting)
Yes, and just because the work has been moved to India does not mean the work is done poorly. The major disadvantage to outsourcing to a foreign country comes from language/accent/communication issues. I have definitely had times where I had trouble communicating with a person in customer service because of that. However, if that hurdle can be overcome through education or through selectively hiring foreigners who have mad
Re:Broken Connection (Score:4, Insightful)
As hard as it may be to imagine, a long time ago American corporations actually valued their customers enough to pay for call centers in the US to be staffed around the clock.
Re:Broken Connection (Score:2)
Re:Broken Connection (Score:2, Insightful)
Oursourcing does not neccessarily mean overseas either. I worked for an outsource company here in the US. We provided technical support and customer service for a wide variety of companies, many who were not large enough to have their own call centers, or who did not recieve enough calls to need one. We supported notebooks from four different companies. The knowledge we received from one notebook manufacturer would bleed over to the others. This worked for the th
Re:Broken Connection (Score:2)
Re:Broken Connection (Score:2, Insightful)
Since the success of THEIR company depends on the quality of their services, how can that possibly make any sense?
We outsource our office cleaning. If we're not happy with the service then we switch supplier. How does whether the cleaners care about the success of OUR company come into it? It's their jobs that are on the li
Re:Broken Connection (Score:2)
Because once you're under contract, the goal is to fulfill the contract, not to do the best job.
We outsource our office cleaning. If we're not happy with the service then we switch supplier. How does whether the cleaners care about the success of OUR company come into it? It's their jobs that are on the line if they don't perform.
You're using an example that doesn't really matter to t
Re:Broken Connection (Score:2)
Outsourcing customer service has conflicting incentives which often make it to the advantage of the vendor to provide sub-par service.
For example, some vendors providing the customer service are paid per call. So the service reps don't properly solve your problem on the first call, forcing you to call again. Bad service, but they get paid more. Maybe they'll lose some clients in the long ru
Re:Broken Connection (Score:2)
Re:Broken Connection (Score:2)
Re:Broken Connection (Score:5, Insightful)
Some costs like labor & rent may be lower. Other costs, such as communication, are much higher.
It is hard enough for manager to communicate their technical needs to a technical staff when they are sitting in the same room, working on the same whiteboard, with the same set of requirements in front of them. This same process becomes much more difficult when you are dealing with staff who speak a different language, work in a different timezone, who have different coding standards and who can only communicate over the phone or some kludgy computer tools.
There are too many companies today who think you can treat the employees (including managers) as a unit of business logic-- they think you can assign task X to any person who fits the "job category", and they can get the job done. This is usually the result of an manager who does not understand the details in the project-- The devil is always in the details.
I've known several dozen large projects where the technical staff was in Europe, Australia, India or some other country; and the managing staff was in the US--- only 1-2 of those those projects suceeded. The rest usually died a slow lingering death. The costs looked good up front, but that's because they managers underestimated all of the inefficiencies in the outsourcing.
Re:Broken Connection (Score:3, Insightful)
It's called global trade. Just like people have to decide whether 1000 bananas are worth 50 truck tires (often through a lot of indirect trading), people have to decide what functions are more efficiently performed in another country.
There's a lot of outsourcing and a lot of insourcing in the United States. And that's good, because that means that both insou
Re:Broken Connection (Score:2)
Excellent statement. I've been saying this for years... I can buy a Ford, which is manufacured from components from the US, Mexico, Japan & Korea; or I can buy a Toyota, which is *also* made from the same countries.
Re:Broken Connection (Score:3, Insightful)
Love your ID, by the way. Lost money on one, made it on the other.
Re:Broken Connection (Score:3, Insightful)
That's a Bad Thing, apparently. I've never been entirely sure why, perhaps some economics major can weigh in and explain it to me.
Because it's all about being patriotic instead of insisting on a good product that won't die before 100k miles.
Re:Broken Connection (Score:2)
Mostly because they seem to have their own interests at heart. They've shortened training, they pay people like 8.50 starting wage, and their attrition rate is way over 200%. Its kinda depressing - as soon as they get someone good
Re:Broken Connection (Score:3, Informative)
However, there are a few differences. First, Tier I didn't have to get Tier II's permission to escallate; at most, a new tech might have to check with his lead. They simply transfer the call to the Tier II queue and go on with their next call. Second, if you asked for a superv
The author is thirty years behind... (Score:5, Insightful)
The author is thirty years behind if this the first time he's run across this idea. There have been shitloads of studies done over and over again that show that most (i.e., >50%) people leave/switch because of shitty service from their existing supplier/provider/brand/etc.
Re:The author is thirty years behind... (Score:3, Interesting)
And to be frank, in most areas I'm quite willing to forgoe service for price. Even the best service policies are generally too restrictive and inconvenient to be worth it. If it's cheap enough I can have a third party repair it (or have a backup plan if it's a service-only thing), or just replace as needed and it will still end up being cheaper and l
Price isn't always important... (Score:5, Interesting)
Often this is not the case. As a part-time marketeer, I can tell you that often what I do to lure customers away from my competition is:
1) "educate" my target segment to expect a higher level of service (change their expectations)
2) tell my competitor's customers that my competitor does not offer that higher level of service (given the new expectations, make them feel unhappy with their current provider)
3) make damn sure my own company offers the higher level of service when my competitor's now-unhappy customers go looking
4) don't compete on price; higher service can demand equal or higher price
5) repeat as necessary
Believe me - I'm not the only out there doing this either.
Yeah, yeah, raising the bar. (Score:4, Informative)
#2 and #3 are flawed. In practice, #2 is often false or provided by sabotage. As a salesman you really have no control of #3 and may be as duped as your customers.
Cingular's "Raising the bar" is a great example. Instead of building out their network, they are spending money on exclusive phone deals and billboards. The purpose of those billboards is to expect a fictional level of service and simply say, without proof, that theirs is better. Having had Cingular and Sprint, I can say their promise is bogus where I live and I enjoy better service than Verizon and other incumbent subscribing friends do. "Education" has to be built on fact.
Re:The author is thirty years behind... (Score:2)
If that was true Speakeasy.net wouldn't be around. Their success disproves your point.
So... (Score:5, Insightful)
Seriously, this just means that you have to be careful who it is who provides your outsourced service just like you'd have to be careful who it is who provides your inhouse services. The big difference is that outsourced service contracts are generally easier, quicker and cheaper to terminate and replace if they're don't meet the agreed standard.
Come on, use some common sense. (Score:5, Insightful)
People say they will take action all the time. How many actually do? Well they do take action. They tell all their friends how shitty "the company" treated them. They go into detail about how "the company" doesn't care. And then next money they send "the company" a check for the bill.
Replace "the company" with practically any business name.
Re:Come on, use some common sense. (Score:2)
Don't underestimate the effect of a pissed-off customer. I'll never buy anything from GEICO due to the shabby and dishonest way they treated my Mother after she was injured in an automobile accident.
I dumped my bank of 15+ years after they screwed up my accounts.
Re:Come on, use some common sense. (Score:2)
I'm currently avoiding Sony products (due to 'rootkit' discussed ad nauseum in Slashdot). Just bought an LCD TV - didn't even look at Sony. I wouldn't buy anything from SCO either - assuming that I actually wanted anything they produced.
Competition solves most problems (Score:4, Insightful)
This is all a lot more neat, clean, and effective than a heavy handed reponse from a clumsy government. Consumers always win when they have an array of free and voluntary choices.
More than that.... (Score:2, Interesting)
Additionally, getting a "script monkey" on the support-line does an unbelievable amount of damage to customer confidence in the company in question. Knowing that you will have to endure the
Wrong Absolute Assumption (Score:3, Insightful)
Okay, I understand Slashdot seeks subjects which spur debate but this one is on the edge. First this is a study which is "predicting." That's the first clue that something is wrong about this, you can make stastics say anything you want. But the real problem here is that they automatically assume that outsourcing will result in a bad experience. Who says? You can have a bad experience with a customer service person (who is American) and just doesn't give a damn. There is no golden rule that the people working for you have any more motivation to help you than an outsourced worker. The article quotes human nature as why they won't identify with the organization...bull. This is nothing but a hyper-general statement to support their conclusions. (Aside from the words likely to, tend to, which are all assumptions.)
The real problem is not that there are companies which are outsourcing -- it is that companies are not caring whether the service rendered is good enough to begin with. If you set a level of expectation for anyone working on your behalf and follow through to ensure that level is being reached it won't matter whether you have employees working at home, in the office or in another country. Far too many companies simply outsource and say do it without monitoring the level of communications to make sure they are doing it right. Saying that outsourcing will automatically cause problems is just an over generalized conclusion.
The one point they did get right though is that it is silly just to compete on price alone. That is actually true, however, they are trying to make this point by generalizing on something which may or may not be true and by missing the real point of customer service.
Slightly OT (Score:3, Informative)
To me this is a remarkable indicator of the high cluelessness level of a very large number of businesses. This is such a basic truth, it's like "Please open mouth to breathe".
Happy Customers/Happy Employees can make a successful business even if the product is just 'adequate'. People resist change more when they are happy than not. F---ing duh.
Some companies are already ahead of the game (Score:4, Informative)
From the article, "you'll soon figure out that competing solely on price is a fool's game"
Quote below taken from DNUK's website [dnuk.com]
Re:Some companies are already ahead of the game (Score:2)
I would so like a technical support engineer in India who isn't trying to imitate a US accent. My problem isn't with the Indian accent, it is with the US/British accents that they try to imitate.
Re:Some companies are already ahead of the game (Score:2)
The problem is when I am dealing with Indians pulling on American accents. Those are hard to understand.
Capative Audience... (Score:3, Interesting)
I keep thinking about that whenever one of my witty, insightful and intelligent comment is modded down by some idiot moderator on Slashdot. Why do I keep coming back to same abuse day in and day out? I really need to go somewhere else.
Re:Capative Audience... (Score:2, Interesting)
I looked at your past comments. I don't think those words mean what you think they mean.
Re:Capative Audience... (Score:2)
You are the audience. (Score:2)
Because, where ever you go, there you are. M$ astroturfers and other assholes will follow you where ever you go.
Re:You are the audience. (Score:2)
But... but... I just got a Mac Mini (PowerPC)... surely I'll be left alone?! Then again, maybe not [penny-arcade.com].
Cheaper isn't always cheaper, either (Score:4, Insightful)
Re:Cheaper isn't always cheaper, either (Score:2)
If you're a small businessman, the key to profit is enhancing ownership. If that's a superm
The new trend... homesourcing! (Score:4, Interesting)
Not that there's anything wrong with Indian call centers but half the time I can't get past the Indian accent to understand what the hell is being said. There is a limited amount of things they can do as well and to say that Indian call centers provide "customer service" would be an overstatement.
When you call a company for customer service you should be able to get someone able to bend the rules if circumstances warrant. The "paid parrots" of Indian call centers can't do that.
Fido a great example (Score:2)
Hidden Bush Bashing (Score:3, Funny)
http://politics.slashdot.org/article.pl?sid=06/03
Just yesterday the President [God be upon him] was telling us that Outsourcing is GOOD for the American workforce. Please don't contradict what the President [God be upon him] says!
Yes I'm being sarcastic, thank you for noticing.
The metric is when things go wrong, not right (Score:5, Insightful)
It is an utter waste of time to study scenarios where customer orders product and pays for it, vendor ships product, customer receives product, end of story.
The _important_ metric is always the worst case scenario where the customer ends up falling in between the cracks in between different departments within a large organisation, nobody the customer contacts has responsobility, nobody has authority, nobody has motivation, nobody has their ass on the line if it escalates.
Anyone can sell acreage on the moon, you judge a company or business by how badly its worst mistakes fuck customers over, and you place the responsobility for that exactly where it belongs, on the directors conference table, and let it run down right through the company.
The reality is the bigger the company the more likely its reaction to a fuck-up being escalated through inaction is to undulge in ever more psychopathic behaviour.
Re:The metric is when things go wrong, not right (Score:2, Insightful)
I couldn't disagree with you more. Just like people, companies need to focus on what they did right. If I'm getting 999 out of 1,000 orders right, I'd be foolish to focus on that 1 order. I need to focus on continuing that level and seeing how I can raise it to 9,999 out of 10,000.
Exceptions simply need to be treated as exceptions - just like you have exception handling in software applications. You simply set-up a special process to handle the 1 out of 1,000. Then, you take a look at how your general pr
Just a thought (Score:4, Interesting)
I'm currently working as a Customer Support in a local company in Malaysia where we help our client's client (mostly from the US and UK) troubleshooting their generic computing problems over the telephone.
Anyway, I've been working for a almost a year now and from what I've seen, the company I worked for has been recruting really skillful/talented people (most of them have CS degrees from Australia) to do the support.
However as you may know, most of these people speaks really poor, non-standard English. To make the matter worse, most of them (including me) have problems with our clients' American/English accent. Personally I'm sad that I've had clients that hanged up on me because they couldn't understand me in some occasions.
Okay so now, I would like some opinions from my fellow
On Outsourcing Software (Score:2)
Unfortunately, with code, it takes the test of time and change to tell if a programmer is a truly talented one or just capable of writing volumes of drek that holds together. The audience that can read code is small and those qualified to
Outsourcing at a random DG of the E.U. (Score:3, Interesting)
Well, here's a true story. A DG (I will not mention which DG) of the European Union has outsourced it's software system that is responsible for the registration and follow-up of requests that basically seek funding of the EU government. That same project is running on it's last legs. The reason is quite simple.
After version 4 and 5, which worked but were not 'modern' enough (not using EJB's in a J2EE server) version 6 was outsourced, and contractor architects designed a J2EE application that should bring the next installment of the software which was untill then running just fine. The rules were a little more complex than before, and some political choices undoubtedly had their effect on the overall design of the system, but so far so good. Of course, the EU is a 'fair' institution, meaning that everybody should be allowed to bid on a contract that allowed the contractor firm to (and here it went terribly wrong) design and implement of a subsection of tha entire application. Ok, ok, not the best solution in the world, and you know, maybe this would have worked if the staff (of which most of them serve lifteme sentences):
- had at least been knowledgeable of J2EE
- had reduced the complexity induced by splitting the application
- if the number of contractors involved in the project would be limited.
- if each project would have had a propper code-review follow-up and an architecture steering group that had an overarching view on the system
- if testing frameworks had been used to test the software
- if project leads would not have been pushed around like toypuppets, from 'dev' to 'organisation', from 'infrastructure' to 'dev'
- if projects themselves would not have been pushed around. Basically they were extremely good in killing all forms of know-how about their own system. Hand-overs were cabinets full of stacks of paper that nobody reads or cares about.
None of these things were there. Can you imagine the mess they are in? I guess you need a little help, let me refresh what can go wrong: XML stored in relational databases, CMP and XA transaction management all over the place, code that is oblivious to memory and performance consumption, timeout periods that allow sessions to continue to run 3000 seconds, and worst of all, session security is only invoked 'once every n times', and n varies per subsection between 5 and 500. (luckily the application runs within a secured domain, but still.) Some modules implemented their own database operations when the responsibility for the tables they access belongs to other modules. Security is implemented in 3 different ways, and doesn't even have roles and users, like every other security has. Code-reviews are dangerous for your health. Tables are being updated by hand, XML's are being edited by the helpdesk by hand, and 'development' people are filling in forms because the users are unable to, while at the same time they are debugging the database because parts of it have been corrupted.. The whole server system has to be restarted each morning, and around noon at exactly 12.19, 'something' brings the servers to the point where none of the applications respond in a timely fashion. I spell it like d.i.s.a.s.t.e.r.
But there's another surprise.. the new next version 7 is due by the end of the year. And that has been decided politcally. I don't think I have ever seen a bigger mess than this one.
I worked there briefly as a contractual agent trying to clean up parts of the mess and bring rather basic things like source-control under their attention. All events, persons and organisations in this text are pure fictional and do not adhere to reality. They really don't!
Outsourcing has other benefits for companies (Score:4, Informative)
I recently found out that the following policy has been instituted. If an employee gets an offer from another company at a much higher salary, make no attempt to match the salary, just let him/her go. Hire someone else, if necessary at the higher salary. But do not give a big raise to any existing employee!
Unfortunately, this situation seems to be more and more prevalent, my friends who work in other companies have reported similar policies being instituted. I don't know where all this is going to end up.
Magnus.
Re:Outsourcing has other benefits for companies (Score:2, Insightful)
Somebody at these firms failed micro... (Score:3, Interesting)
To Dell, satisfying a customer can be meassured in terms of future revenue, while a contractor is going to view each call as a cost to be paid out of their contracted fee. Changing the incentive structure would change the results drastically.
Imagine: You get paid some amount of money per week to deal with customers, out of this you must pay for staff and equipment. More time spent on customers means more staff must be hired. What would be the profit maximizing solution? Spend as little time on customers as you can while maintaining sufficient quality that you contract doesn't get canceled. You know there are no substitues for your services, customers MUST come to you unless they wish to incur the cost of a new computer. If you breed an atmosphere where your workers try to minimize the duration of calls, your quality will degrade and people will not purchase that brand in the future.
Now imagine a setup where you get some smaller amount of money, almost enough to keep your doors open, and your customers rate your performance as "poor", "okay", or "good", and you get paid a small bonus for being "okay", and a larger bonus for being "good". Being "poor" most of the time means you go out of business (hopefully for the customers' sake you lose your contract first...) Pass on part of the quality bonus to your employees and they will spend more time, making sure that they get their extra money by being helpful. In order to realize the largest return possible you will invest part of your profits in training and more staff (for a decreased wait-time).
The contracting firm of course needs to ask if they can do it for less money, but cheaper labor means a smaller fixed cost, so it would likely end-up outsourcing to another firm somewhere were wages are lower, say in rural Kentucky or purhaps off-shoring it to somewhere in the British Commonwealth. Basic microeconomic lessons: if your product runs the same software as your competitors, then your cost/quality combination must be more attractive if you wish to capture or retain that marginal customer; time spent on the phone listening to recorded messages tell you how much your business is valued is considered a cost by consumers; and incentives matter.
This story is fairly offensive, (Score:3, Insightful)
A well-run call-center gives good customer service. No more, no less. Bad call-centers exist all around the world. Yes, including the U.S.
Re:This story is fairly offensive, (Score:2)
Last week I called 1and1 internet tech support on a simple request (import a MySQL dump into a database). Now I have no idea if 1and1 outsources to India - maybe she was just chewing tobacco while talking or something - but I couldn't understand what the fuck she was saying more than half the time. It took 30 minutes just to convince he
Wrong reasons (Score:3, Insightful)
There ARE, however, very real hidden costs to outsourcing that make it a difficult prospect at best; poor customer service just isn't one of them.
The worst is managing the relationship of your US staff and the outsourced staff. I have seen numerous examples of subtle or even outright sabotage of the project by the US staff.
One of the most successful outsourcers in the United States has a "core values" program for it's US staff...the ability to maintain political neutrality while acting as a good will ambassador is a key core value.
Western and Hindu culture are very compatible if you take care to manage the intercultural references, whch can cause major difficulties. For example, many Hindus will say "You are correct" to acknowledge they are listening. What they MEAN is "OK" or "Uh huh", but Westerners often take is as arrogance or judgmental.
Worse yet, Westerners take it as meaning that their point is understood, and it's culturally difficult (impolite) to ask for clarification if the other speaker has gone on to a new point. Its is very important to make sure what you think you are saying is actually what they are hearing.
One minor point on an underlying theme of these comments. Believe it or not, institutional economic analysis shows that India isn't a serious problem for US jobs, not like China is, anyhow. The reasons range from cultural differences (India is highly conservative, for the most part) to the fact that the level of convergence is much higher, as well as a much higher integration of Indians into American culture. I suspect the reason India is getting such favorable treatment from Bush is that they are viewed as a "client state" of America, not an independent nation, probably for good reason.
Surveys don't reveal actual actions, just fantasy (Score:2)
When it's "good enough" the execs don't care. (Score:4, Interesting)
Also, those complaining about outsourcing are probably wasting their breath. The next round of outsourcing is going to be targeting all the "innovation" jobs in IT like systems architecture and design that we thought were safe. I'm planning to stay in for the long haul and hope that some of this comes back around. However, we need to adjust our expectations to the new reality. If it's cheaper, it will be done. Unless consumer prices and our rampant spending are adjusted, we have no way to compete with people who will do good enough work for 10% of the price.
The real hidden cost of outsourcing is the loss of a talent pool. If and when I have a kid, I'll encourage it to be smart and study, but I think I'll encourage it to be a lawyer or an MBA. They're not replaceable, and the professions (medical, law, etc.) have a very strong organization that keeps the barrier to entry and salaries high. A good example is pharmacy. Pharmacists don't make their own compounds anymore; they pour tablets from the big bottle to little ones, and get paid very high salaries to do it. All they have to be is careful.
Re:When it's "good enough" the execs don't care. (Score:4, Interesting)
My daughter (currently in High School) was interested in studying Comp Sci in college (like her mom and dad). We talked her out of it. She's also had people (usually current or ex-software developers) come into her school for 'career' days and tell her class that there's no future in IT, it's all going overseas. Interest in IT as a career among her peers is fairly minimal.
Generation Y is not stupid. They see what's happening to their parents and friends of their parents. And they're adjusting accordingly.
Cost isn't a factor in outsourcing decisions (Score:2)
Cost of Outsourcing (Score:2)
Re:Cost of Outsourcing (Score:2)
My gripe is with the idea that rotting out a company's core somehow retains that company's position.
I figure that if I'm buying a product, it might as well just say the company that ACTUALLY made it, and they should get 100% of the revenue.
Many readers of /. would call this 'insourcing'... (Score:2)
Outsourcing (to other countries or just other firms) -- when it comes to highly skilled programming jobs runs into the problems of management and flexibility. You CAN absolutely be successful outsourcing a complex application. You damn well better have a perfect specification with excruciating detail, a timeline that's very quick -- so your market doesn't change mid-process, and a perfect business plan that won't need to change as
Re:12 of the many problems (Score:2)
Dumbass
Re:12 of the many problems with outsourcing to Ind (Score:4, Interesting)
1) After you teach the Indian company how to write good software for your industry, a relative of the owner of the Indian company will go into business in competition with you.
This is true in pretty much any business relationship. Whomever you teach how to do a thing for your profit will try to figure out ways of doing that same thing for their profit.
3) All products require innovation. Indian programmers are not usually innovative; it's not a quality of the Hindu culture.
This is one of those bigotry motivated points.
I know enough Indian people to say this is false. You don't have to believe me though- take a look at the list of Nobel laureates. Just wanted to refute one in case anybody was wondering.
4) No matter what the project plans say, programming requires decision-making that affects the long term health of your product and your company. How often does programming require far-reaching decision-making? Possibly as often as once per hour.
The general point here is completely valid, and people will have to learn how to evaluate companies for their work performance. Switching industries- who would you rather hire to do special effects for your eature film: Zenera (my company) or Industrial Light and Magic ?
Well, ILM has earned their reputation through lots of successful high profile projects. You can look at a ton of their work. You'd be smart to go with ILM unless your project is small and you can afford a risk, then you can risk a small unknown studio like Zenera.
My pricing reflects that- I am much cheaper per man hour than ILM. That's my company giving prospective customers a valid business reason to choose us. It decreases risks in case of failure and costs in case of success.
The same is true in any sort of outsourcing- I talked about reputation, but a management team must examine who they are outsourcing to, and their prior work product, in order for the move to be effective.
5) People in India are amazingly poor for a reason. That reason may (will) affect the work they do for you.
If the parent means to refer to the lack of materialistic motive in their culture, I fail to see the validity of the point.
In general, Indian culture values education. That is valuable- especially in a knowledge industry like programming.
Mostly however I think this "point" is, again, motivated by bigotry.
6) There's a big overhead in crossing cultural boundaries. On the other hand, programmers in the U.S. may spend a lot of time playing video games rather than learning social skills; there is a big barrier between someone with low social skills and the normal world, also.
This sounds like a point, but ends up being a non-issue. Indians, or any other foreign contractors will have to expend their own internal efforts on these issues. Native contractors are likely to use that as leisure time. Both are "wastes" from a productivity standpoint.
(I know there is a point here about leisure time being restorative and allowing people to work more effectively when they are on task- but there are some studies that indicate that what is really needed is time away from the "primary" task, a secondary task is often just as effective as a pure leisure time. Let the shrinks sort it out.)
7) You may not notice the low quality of your product until it is too late. That's why you outsourced, isn't it?: You wanted to avoid giving attention to a critical area.
Anyone who outsources their critical business processes is a fool.
There are valid reasons for outsourcing, most of which boil down to focusing on where your expertise is, and letting other experts do what they are good at for you.
Using Apple as an example, they outsource almost all of their manufacturing and assembly. They focus on design and engineering. (Software and hardware)
Re:12 of the many problems with outsourcing to Ind (Score:3, Informative)
2)OJ Simpson Anyone?
3)Indians can innovate. What do you call creating a business model where most of your work comes from a high living cost country so you can charge high rates but you do it in a low living cost country so your costs are lower. Thats real innovative
4)And the point is? Decisions made by an American programmer are different from decisions m
Re:Pardon me if... (Score:2)
Outsourcing is synonymous with capitalism...when you can't get something done yourself, hire someone who can. That much makes sense. The deviance comes when people assert that you can hire someone to do the job, at a profit, and this is still cheaper than doing it yourself. That doesn't really make sense, that distance=profit. Most of the lessons of 20th Century capita