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The Future of Outsourcing in India 274

Posted by Zonk from the i-would-personally-rather-keep-the-jobs-here dept.
aaditeshwar writes "Economist has an article on the current and projected state of outsourcing IT and other business processes to India. The biggest problem seems to be that the talent pool of skilled workers will not able to keep up. Currently there are about 700,000 people working in IT and outsourcing, which is likely to grow up to 2.3 million by 2010, but only 1.05 million new graduates will qualify from local colleges in the next 5 years leading to a shortfall of 500,000 workers! All this despite the fact that almost 2.5 million students graduate in India each year." From the article: "In IT the growth in Indian exports is expected to come both from the software market, and from 'traditional IT outsourcing'--such as the remote management of whole systems, a market now dominated by the big global IT consultancies. This is expected to rise from 8% of Indian sales now to about 30% in 2010, while software-development's share will fall from 55% to 39%. In business-process-offshoring, the big industries will remain banking and insurance. But rapid expansion is also expected in other areas, like legal services."
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The Future of Outsourcing in India More

The Future of Outsourcing in India

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  • Eastern Europe? (Score:5, Interesting)

    by TubeSteak ( 669689 ) on Saturday December 17, 2005 @08:42PM (#14282068) Journal
    Eastern Europe has a lot of IT/programmer types.

    Since some of them aren't employed, they're part of the burgeoning spam/trojan/virus/worm market that has been growing over there. Organized crime too.

    Once the Companies have run out of Indian workers to shift jobs to, they'll move to Eastern Europe sooner or later.

    And by Eastern Europe I mean former Soviet Block countries & their neighbors.

    • Re:Eastern Europe? (Score:2, Interesting)

      by Anonymous Coward
      I got DDoSed by a Latvian botnet run by this kid named "Areems" from Talsi, Latvia.

      I tracked him down and he is now an exchange student in Auburn, NY.
    • The problem is that India and China have the numbers. Once these places are tapped out because of increasing internal demand the cost advantages are going to dry up and then we will *really* hear the whining from business who don't want to pay a real salary to their technical professionals.

      • Once these places are tapped out because of increasing internal demand the cost advantages are going to dry up and then we will *really* hear the whining from business who don't want to pay a real salary to their technical professionals.

        Or they might stop whining altogether. At that point, they might just realize that there isn't any large source of cheap labor they could get at if only they could convince the gov't/some other group to let them go after them. No convincing could make people appear fro

      • Re:Eastern Europe? (Score:2, Interesting)

        by mildgift ( 855983 )
        I was under the impression that the US had pretty much tapped India for all its talent years ago. We were getting to the more 'normal' workers.

        Face it. Programming has gotten only so much easier. The demand for software increases. As more software is produced, it acts less like a machine, and more like 'media'. That predicts high demand for programmers for a long time. The pay won't be as high, but the demand will be there.
    • I understand there are other countries that are catching up as well in the area of skilled IT workers and solid educational facilities to prepare budding technologists for the market. Infrastructure is almost there, although cell phone capabilities aren't quite on par with the rest of the world. There are also some rolling power outage issues as well in the western corner of the country. But, it's only a matter of time before the salary dfiferential makes outsourcing to this country attractive.

      They seem

    • Re:Eastern Europe? (Score:2, Insightful)

      by JanneM ( 7445 )
      Eastern Europe has a lot of IT/programmer types.

      Yes, and they are riding the outsourcing wave as well (and good for them!). But they are focusing regionally - the eastern European states are mostly getting work from west European companies, and the Baltic states are working with Scandinavian companies. Skype was started by a couple of Swedes and has/had a lot of their developemnt in Estonia, for example.

      I don't think there is that a large surplus pool left over for, say, American or Japanese companies when
    • And by Eastern Europe I mean former Soviet Block countries & their neighbors.

      Translation:

      In Soviet Russia Companies Outsource YOU!

  • Why lump " IT and outsourcing" together? (Score:4, Interesting)

    by NotQuiteReal ( 608241 ) on Saturday December 17, 2005 @08:42PM (#14282069) Journal
    700,000 people working in IT and outsourcing

    It is ALL outsourcing. Why separate IT from, say back-office banking, insurance and other tasks...

    Heh, or are they trying to distinguish "IT" from trivial paper-pushing.

  • Next Target (Score:4, Insightful)

    by Tiberius_Fel ( 770739 ) <fel AT empirereborn DOT net> on Saturday December 17, 2005 @08:48PM (#14282093)
    When they run out of people to hire in India, or when workers in India are expensive relative to workers in some other country, they'll move on to that other country - it's pretty much as simple as that. The quest for the most effective labour for the lowest price will never end.

    • Re:Next Target (Score:2, Informative)

      by blue1 ( 878449 )
      An friend in India was telling me about how his company outsources Software Engineering jobs to the Philippines. Maybe that's where this will go next.

    • Re:Next Target (Score:3, Insightful)

      by Dr. Spork ( 142693 )
      Sorry to remind you that this will at some point end because there are only so many people in the world, and the population is expected to stabilize soon. Once globalization is through with Africa, there will be no other place to go. And what comes after that? Dunno, maybe the People's Revolution? Big world war? But something is gonna happen. This sort of "water flowing downhill" approach (which is the basis of the global economy) can take you far, but not farther than the valley.
      • Big world war?

        More likely less wage disparity between countries.

        • Re: (Score:3, Insightful)

          by account_deleted ( 4530225 )
          Comment removed based on user account deletion
          • The upshot of increased freedom of trade, is increased wealth overall. ... As their middle class expands, so does their ability to buy goods from the USA and Europe.

            It all depends of freedom.

            Everyone in the USA and Europe already buy all their stuff from China. Unless you count a second rate OS and other increasingly made abroad IP, I'm not sure what there is to buy from US anymore. I wish it were different. IP is a tenuous export at best, but it's a bogus one when it's based on imported research.

            All

            • Comment removed based on user account deletion
            • The problem with all systems like what China has is that distortions of the free market system due to excessive buraucracies always lead to a collapse of the monetary system. There are signs of this in China already with huge amounts of dead loans. IMHO there will be a huge banking collapse in the next 10-20 years leading to a big change in the government.

              It is only a matter of time and how hard it will hit the rest of the world economies.

              When it is over China will finally be a free nation.

          • Re:Next Target (Score:4, Insightful)

            by stinerman ( 812158 ) on Sunday December 18, 2005 @12:25AM (#14282929)
            The upshot of increased freedom of trade, is increased wealth overall.

            Up to a certain extent. First, many countries we outsource to have little to no labor laws. Workers are forbidden to collectively bargain with their employers, which gives employers the upper hand in dealing with "problem" employees who say that working 80 hrs/wk for $.50/hr just isn't cutting it.

            Second, with increased wealth comes increased demand for energy, as energy consumption directly correlates with wealth. Everyone always likes to say that globalization and freer markets will allow people in all corners of the world to have the same quality of life as Americans. As of now, we don't have enough energy to allow everyone to live like those of us in 1st world countries. Hell, we can't even find a way to feed everyone, much less generate electricity for everyone. Of course, one would hope we can find a way to meet the world's increasing energy needs, but oil production is nearing its peak, and we've not found any viable alternative. Even if nuclear fusion came on-line tomorrow, the fact that Wal-Mart sells $10 t-shirts is because of suppressed wages in the countries that make them. To put it another way, how much more do you think your new P4 processor would cost if it was fabricated in the USA?
          • This is why I cannot understand the reason why Socialists oppose Globalization. It comes closer to achieving their goals of worldwide economic equality than anything else. I suppose they oppose Globalization because corporations benefit from it. Guess they care more about hurting corporations than helping people.
    • There actually aren't that many other poor places they can go. Not in terms of number of people, anyway. India and China are about 1/3 of the world population,and 1/2 of the poor world. Once they have joined the rich world, there's only so many poor nations left.

      This doesn't mean that the quest for the most effective labour for the lowest price will end, of course. It just means that that lowest price will rise.
    • The quest for the most effective labour for the lowest price will never end.

      Not till it gets to, say, Somalia.
    • One day, three consultants, each one from WIPRO, INFOSYS and IBM, went out for a walk.

      They were old buddies from Engg college, and they were together for a college reunion..

      For no apparent reason, they went into this zoo and passed a monkey.

      Being in the same business and from the same college, there was a little bit of a peer competition going on between themselves - they couldn't resist testing themselves against each other -

      especially the Infosys guy said to the others: "Why

  • their market is red-hot (Score:5, Interesting)

    by BigGerman ( 541312 ) on Saturday December 17, 2005 @08:50PM (#14282097)
    I recently interviewed several people in India for senior (US equivalent of 100K+) position with outsourcing department of big big US company. Those people were ok but they were JUNIOR (in experience, soft skills, everything). However, overseas headhunter warned the company that even these people will not be available for long and it is almost impossible to find more.

    In my opinion (14 years of consulting), the India craze did cause a significant dip in rates for US people but even couple years ago we already were scratching the bottom of the barrel. I think the shortage of programmers is a global thing and caused by primitive immature tools and processes and outsourcing is not a magic bullet. My typical client cannot coordinate people across the room let alone across the ocean.

    • From the parent poster and TFA, it would appear that India will not be able to keep up with the demand for IT workers. The prevalent theory about agrarian societies driving demand for larger families (as opposed to middle class tradesmen) would appear to be contrary to the best interests of India. Perhaps the next generation of Indians that have grabbed the IT "brass ring" will produce larger families, if only to help their country meet demand for IT workers.

    • Re:their market is red-hot (Score:2, Interesting)

      by Anonymous Coward
      It's interesting that you said this. Iam part of senior management at a firm here in India. One of the first things that I look for in a resume while recruiting for senior positions is how long they stayed at any one place. Half the people I interview will show a long list of short term assignments with companies. I am left wondering whether they have been able to learn anything. An even larger part of the people who come in recommended are usually there because he or she is related in some way or are good

  • I long for the day (Score:4, Funny)

    by Anonymous Coward on Saturday December 17, 2005 @08:50PM (#14282100)
    that they start outsourcing journalism to india

  • Lot of assumptions in prediction of "short fall" (Score:5, Interesting)

    by sisukapalli1 ( 471175 ) on Saturday December 17, 2005 @08:50PM (#14282101)
    As far as I know (from cousins, friends, and general chat from India), there is still a strong demand for the outsourced jobs. Almost tens of resumes per open position, so the prediction of "short fall" looks to be based on shaky ground. There are so many factors involved: there is a large pool of current workers, not all positions require an "IT" degree, and that many jobs may not be created (may move to other countries, or be simply automated).

    The unemployment rate in India is still staggeringly high, and the couple of million jobs that *might* be created will be quickly gobbled up.

    I suspect that the industry agenda is to continue to have a huge surplus of applicants (or even increase the applicants to positions ratio), so that they can put a downward pressure on the salaries. I'd call it Walmart-ization of the IT (and non-IT) outsourced industry.

    S
    • I want to say this will be the case, but it's worth noting that computers just aren't affordable for the average person. The average salary is about 15-25% of an American equivalent in the IT world, and that's astronomically high for India. That may or may not get you a car.

      My point is it's not like the US where someone can sit at home, get a computer, and learn computer skills quickly. Someone in India has to take the time to learn computer skills somewhere. I'm not sure where the qualified applicants

    • Re:Lot of assumptions in prediction of "short fall (Score:5, Insightful)

      by RevMike ( 632002 ) <revMike@@@gmail...com> on Saturday December 17, 2005 @09:28PM (#14282254) Journal
      As far as I know (from cousins, friends, and general chat from India), there is still a strong demand for the outsourced jobs. Almost tens of resumes per open position, so the prediction of "short fall" looks to be based on shaky ground.

      I go through at least 40 or 50 resumes in the US (Metro NYC area) to find one person worth hiring. And these are resumes that have been supposedly pre-screened by headhunters. Resume counts mean nothing if those tens of resumes represent poorly skilled people.

    • The law of supply and demand requires that demand will always rise to the point that supply is incapable of meeting that demand to such a degree that prices rise to the maximum that the market will bear at that time. If supply exceeds that value, you will get undercutting, which will lead to an artificial inflation of demand until undercutting is no longer feasible.

      In other words, a shortfall is not a product of a particular society or of outsourcing, it is a simple product of economic forces. Or, at least,

      • Re:Supply and demand (Score:3, Interesting)

        by TheSync ( 5291 )
        The instability largely comes from political corruption, monopolies of any kind, insufficient worker protections, price gouging, accounting fraud and other such elements, where the normal feedback mechanisms cannot work or are even actively prevented from working.

        The most screwed-up economies are the ones that are the most regulated. India's economy before 1980 was very regulated and very screwed up. It would take a year to get a permit to import a computer, thanks to trade protectionism. Now India's eco

  • Meanwhile, Bill Gates (Score:5, Interesting)

    by Travoltus ( 110240 ) on Saturday December 17, 2005 @09:01PM (#14282144) Journal
    complains about the lack of programmer graduates from the US.

    Does anyone wonder why few Americans want to take up programming any more as a career? There's no jobs for them - the corporations crying about a lack of programmers refuse to look to the US to hire any.

    And when BPO hits the banking sector, you can kiss the security of your identity goodbye.
    • I don't know who modded this parent upto a 4 Interesting,but this is really stupid. Sorry!

      "There's no jobs for them"

      You mean there's no job for "scripters/programmers in Java/Perl/VB.NET (for fun)/gamers/hackers/*nix lovers etc" who don't have the fundamentals of computer SCIENCE right. Programming is NOT computer science. Bill Gates wants more computer SCIENCE graduates. Not programmers!

      You think just because you can program you have an edge?! I can guarantee you IQ for a programmer isn't necessar
  • Here is the problem. All the "big" companies are stating that there is an "IT shortage" for workers. There isn't. What there IS a shortage of are "dirt cheap" IT workers in the USA. Really, think about it, the companies mis-quote left and right the number of graduates from the US and compair them against numbers from India and even China. Numbers that just simply do not corolate to each other. Compairing "degrees" from 4 year accredited colleges/universities against 2 year trade schools. Is there a portion
    • That crash will never happen because labor isn't "just another commodity to be traded". Labor is millions of people with lives, hopes, dreams, possessions, rights, bodies, souls and aspirations. Many of these hopes, dreams and aspirations involve a decently-paying job and do not involve moving to India just to go to college on the cheap. Therefore, these people will continue to pay for high-cost edumacations (how much do they really teach people in IT and CS programs, nowadays?), and the schools which pr
      • Its nothing compared to the 19th century when workers worked 90 hours a week and still needed 4 roomates to share a 1 bedroom apartment due to the low pay.

        But of course they did not rebel in the US. If other countries rebel then the companies will move everything to the US or be %100 based in India and they can save even MORE money.

    • A funny thing happens when you PHBs the very same question about the economics of X:

      If X = "oil" or some other physical commodity: There will never be a shortage of oil because the price will simply rise to meet demand; the market balances itself.

      If X = "programmers" or some other laborer: There is a huge shortage of programmers because we don't want the price of programmers to rise until the market balances itself.

    • Its stabilizing. I for one would be happy to work for $25k a year doing jr programing and administration work and many senior level unix admins are happily working in Canada for the US equiliviant of 34k a year. Its the new standard and only a little more than an Indian.

  • One would hope (Score:2, Interesting)

    by astyanax ( 8365 )
    ...that current outsourcing trends slow enough due to a competent IT worker shortage in India (for what piddling amounts the US companies are currently willing to shell out for outsourced positions anyway), such that the US labor costs can drop slowly. This would allow existing US IT workers can continue to find *some* work and do nice things like FEED THEIR FAMILIES until the global economies even out. This will likely take years though, so I'm not holding my breath.

    At the megacorp where I worked we trie
    • that current outsourcing trends slow enough due to a competent IT worker shortage in India

      You may not realise how right you are. I've been doing some variety or other of work between the western world, India, and China since 1998. I hate to say it, but it is true: the good engineers from India and China move to the West where they get paid a lot more, live a hell of a lot better lifestyle, don't have to bride government officials to get a drivers license, and generally chase the "dream." The ones that can

  • Im a programmer... (Score:3, Funny)

    by Anonymous Coward on Saturday December 17, 2005 @09:06PM (#14282166)
    And I've recently decided that my management was too expensive so Ive outsourced it to India.

  • All this despite the fact that almost 2.5 million students graduate in India each year.

    This leads me to one thing I've been very curious about. How are companies checking the credentials of people overseas? I know there are quite a few people (some I've had to deal with), that I can't beleive they got any more than a 'boot camp' type training. With all the movement between companies over there, I can see how people would get lost in the shuffle and keep working.

    It's not quantity of IT workers I see as t

    • Re:Education? (Score:4, Insightful)

      by kanad ( 541484 ) on Saturday December 17, 2005 @10:30PM (#14282465)
      I was an IT worker in India. I am Indian. Indian IT companies recrit all sorts of engineer i.e civil, mechanical, electrical, chemical etc apart from comp sci. Since most engineering students have atleast a common denominator of traits like analysis, rigourous coursework, maths etc. the IT companies know that they can train them in sofwtware with relative ease. Of course the CS grads get the more better technlogy to start with (says database. java etc) while the non - CS ones may have more maintenance, mainframe, testing kind of job to begin with. Most IT companies take grads and subject them to 1-3 months intensive introductory software training courses just like a mini college course. Check for example the infosys global education centre [rediff.com] Also large Indian companies are in turn opening offices in China [infosys.com], Hungary [prdomain.com] etc to outsource the outsourcing.
  • ...if you're an Indian and you graduate and go into IT, you won't have trouble finding a job in India.
    • Ha! I love it. All of these American slashdotters hating on the fact that IT is booming in India (at the expense of the USA)! The funny thing is most /.ers have socialistic democrat leanings and are always pining away about how we should help the less priviledged in the world. Then when a lesser country finds a niche and starts competing with the evil USA they don't like it.

      See people, a person can help themself if they will only learn the wonderful concept called Capitalism. There's no need for the governm

  • A slightly different angle (Score:4, Interesting)

    by djupedal ( 584558 ) on Saturday December 17, 2005 @09:25PM (#14282249)
    We're in the process of hiring 100 Engineers from both India and Pakistan, with the plan being to bring them into Mainland China to work in the telecom industry.

    During our recruiting so far, we're seeing a yield of approx. 5% after all interviews and testing, but that is prior to them coming into the PRC. We've gone thru nearly 4,000 candidates since Sept.

    For the record, I'd source domestically, but mgmnt. wants to curry favor with the home countries, so the burden to fit them in is on me. At least the bonus program is in my favor :)

  • Depends (Score:3, Interesting)

    by BrookHarty ( 9119 ) on Saturday December 17, 2005 @09:40PM (#14282296) Journal
    I dont trust these numbers, IT numbers leave out IS and other comp-sci, engineering people who also do the same programming, dba, systems/network engineering.

    I think a few things will happen.

    Government will have to figure out how to tax those people, the outsource loophole, the company doesnt have to pay insurance, workers comp or benefits. The biggest problem is we outsource work for one of the high end middleclass sectors and drop the pay in 1/2 to 1/3 when the cost of living stays the same in the US. While those people offshore dont pay local taxes. When enough people start feeling the money crunch, expect some laws passed.

    Software programming will be cheap, you can buy custom software quickly. I know some web developers who work with a couple outsource groups who just send the specs, and the company sends the completed software. While its not perfect, its cheaper and only takes 20-30 days. Good enough for first generation software.

    And last, there will be some scandles about IP issues and copyrights.

    • The biggest problem is we outsource work for one of the high end middleclass sectors

      And so they are not high end middle class any more. Problem solved.

      Government will have to figure out how to tax those people, the outsource loophole, the company doesnt have to pay insurance, workers comp or benefits.

      I think you don't understand who tells the government what to do.

    • Want to end outsourcing? Tax the business hiring outsourced labor the amount each and every worker would make if they were in the US. If there's no cost benefit in outsourcing, they won't do it.

    • Re:Depends (Score:2, Insightful)

      by JanneM ( 7445 )
      Government will have to figure out how to tax those people, the outsource loophole, the company doesnt have to pay insurance, workers comp or benefits.

      They do pay the taxes, insurance and other benefits in the country they outsource to. And with a very hot labour market over many years, and the countries growing wealthier, those costs are increasing and faster than in the stable industrialized countries the companies are based in.

      In any case, all todays large companies are largely borderless. Most do not ha
      • In any case, all todays large companies are largely borderless. Most do not have a plurality of activity in any one country, and frequently their larges market is not in the same area their head office happens to reside. Outsourcing is not only to get cheaper development - it is also about having a prescence in very fast-growing markets.

        Some aspects of companies are borderless, like support. But then if companies want to do business in the US, we can always put tariffs on them for playing foul.

        Last I checke

        • Re:Depends (Score:2, Insightful)

          by silverbyte ( 213973 )
          People who come to the US to study, get advanced degrees and stay back in the US to work as highly skilled and specialised engineers/doctors/scientists.

          The ones who work in the BPO sector or the IT sector are basic code monkeys.

          Those who do make it into all those MS/Ph.D programmes are genuinely skilled - cutting them out will only ensure that R&D programmes experience a shortfall. And that one-advance-in-AI-to-make-outsourcing-redundant, that becomes so much further off.

    • Re:Depends (Score:2, Insightful)

      by AgentPops ( 748435 )
      I agree with all of this. Many things will have to be sorted at these many levels of the social machine. Also to be considered is the cultural barriers posed with dealing business with in the context of an Indian mindset. Their fatalistic disposition can leave many of the more conscientious feeling at a loss for how to hope for the future in a joint venture. Even my limited experience with doing business within the Indian infrastuture leaves much to be desired in regard to honesty and integrity. The cu
  • Is this concept so foreign to them now? These are US companies.. how about hiring US employees? Why does everything have to be freakin' outsourced?

    There's plenty of geek talent in the US for the hiring. I wish these companies would hire in the US and help the US economy instead of throwing the money overseas.

    Arrrgh.

    -Z
    • Why does everything have to be freakin' outsourced?

      Because it's cheaper, maybe?

      There's plenty of geek talent in the US for the hiring.

      Will you work for $5K per year, no holidays, no vacations, on a 60 hours per week schedule?

    • In many cases, these companies aren't US companies anymore; they're multinationals, who happen to be headquartered in the US. Hippies used to talk about wanting a "world without borders", and in the end, they got it. Pity it's the version thought up finance guys who can afford to live in gated communites, while the peace, security, and community stability version (doesn't contribute to next quarter's numbers, so who needs it?) remains the province of folk songs.

      (and yes, I believe in the whole free-mar

    • Disclaimer: I hate this situation with a passion. I've trained the outsourcer that replaced my friends, stuck on conference calls with people that have no interest in the product, just getting more business.

      BUT

      From a money-only view, the US manager's job is only to cut costs. It's where their bonuses come from.

      Therefore, they COULD hire from the home country, and be expensive. OR they could get an outsourcer to do it, and get a huge bonus. AND if you're smart, you hire a middle-of-the-road outsourcer th
  • Every outsourcing story I've heard has ended in disaster, overrun budgets, wasting thousands of dollars sending employees to India for months at a time, and unmaintainable code ... all the while not being cheap enough to justify any of it.

  • cost vs benefit (Score:4, Interesting)

    by AgentPhunk ( 571249 ) on Saturday December 17, 2005 @10:36PM (#14282487)
    I'm the network engineer for a company considering setting up an engineering / design shop in India. I just got pricing for a DS3 Internet circuit there. HOLY SPANDEX, BATMAN!

    A straight E1 circuit (2Mbps) to the Internet is about $4000/month, and about $3000 to install. (All prices in US dollars) Not cheap, but not bad.

    A 2xE1 (4Mbps) jumps to over $10,000 per month.

    Once you hit DS-3 which is scalable in the sense that once you have the circuit installed ($17,000 one-time fee), you can go from 0-3 Mbps to start all the way up to 45Mbps, your rates go from $16,000/month for the 3Mbps up to over $80,000 PER MONTH for the 45Mbps.

    Depending on what you're doing there, the straight E1 isn't that bad, but you really can't pump that much data through it. The ds3 prices are through the roof. Plus, I've been told that the infrastructure there is so bad that shit fails /constantly/, so you'd better plan on two of everthing for redundancy.

    Now if you're truly outsourcing all of this and therefore feel that you don't eed to worry about the sunk costs, fine, but when you pick the cheapest-of-the cheap bid, that most likely means that they have a crappy DSL out to the 'net that goes down at least once a week for 24 hours at a stretch. "sorry, couldn't {manage your network | take your callcenter calls | upload those CAD files you REALLY REALLY needed by 8AM the next morning} because our local loop was down because some dude running a backhoe trying to upgrade our highway system just yanked our a thousand strands of fiber."

    Oh yeah, there's also the problem that India gov't managed-monolopy telcomm says that you can't terminate out-of-country VoIP calls into the Indian PSTN. So now you need either two phones on every desk, or softphones, or ??. Again, two infrastructures for them to manage. (If, of course, they feel that their wageslaves^H^H^H^H^H employees need to be able to call locally while at work.)

    My guess is that as these hidden 'costs' start to surface, and as the cost of labor increases in India, people will start to move on to the next cheap area. Lather, rinse, repeat, wait a few years, and everything balances out (or so the economists in the group would say??)

    • I was just in a meeting where we were told that India wasn't going to stay competitive cost-wise.

      So, we need to find companies to outsource to in countries that won't have a lot of competition.

      They didn't mention telecom costs. In India, everybody wants the stuff, so they can charge what they want. But if you go where there are no companies to compete with, you bring new jobs, the government will pay for your telecom.

    • Re:cost vs benefit (Score:3, Insightful)

      by TheSync ( 5291 )
      And you are experiencing "reformed" India. It was much worse before 1980, in the days of the "Permit Raj" [slashdot.org].


  • It's a different angle on the same old labor shortage song and dance. As another poster pointed out, if India can't supply the labor, another country will and they'll do it cheaper. There's still a vast supply of labor in the world.

  • U folks have talked about so much(little) stuff.. (Score:5, Interesting)

    by FeralTitan ( 904608 ) on Saturday December 17, 2005 @11:24PM (#14282676)
    and here are my thoughts
    • 1.Education in India is not 2 year boot camps it is usually 4 years for an education in IT. Also, the reason most of these folks are better than there US counterparts is because the Indian Education System is very difficult.Also, some of the worlds best technical institutes are in India. Ever heard of 'Asok' in Dilbert strips, he was from Indian Inst. of Tech. and he could blow up your head by just concentrating ;)
    • 2.There are really 2 kinds of outsourcing, IT and ITES (or BPO) IT outsourcing is about programming and is called so because it was the first wave well before BPO. When the BPO wave came they decided to call it BPO so that one could differentiate between the two, so folks like you and me could talk about it intelligently.
    • 3.If you cant find people in India, its your head-hunter who is usually to blame. Also, this whole exercise is more complicated than you might at first imagine. For example most Indians don't like to relocate to a different city - they prefer staying with thier families and usually their parents are old and need care.Also, like someone mentioned it is very easy to retrain programmers on other languages etc.
    • 4.This whole discussion is dominated by 'IT' the 2.5 million folks who graduate arent all IT and a lot more than IT is getting outsourced to India now.Trust me it will suprise you what new work is getting outsourced, everything from lawyers to doctors to mathematicians and tutors and ...
    • 5.One of the basic reasons that a US programmer is expensive is because the education is expensive. Why do you want to make knowledge so expensive and inaccesible? Shouldnt education be cheap - bad US govt. policies? Arent you te folks who invented all this free knowledge thingy? Open source and Wikipedia and what not? Well, some advice make it cheap to get trained in the US and do it fast.
    • 6.Employees are not slave drivers in India - most companies have decent office culture and practices.Very uninformed opinnion!
    • 7.I believe that once Asia and Africa are done with, the work will go back to the US - it will be the developing country then. In the next century Asia will completely outrun the US in every walk of life.
    • 8.Someone mentioned that every outsourcing story they heard was a disaster - obviously they havent a clue! :)

    Anyway what do you folks say? ------- Apologies for typos and bad formatting - NO TIME.
    • Most of what you say is true.

      I've worked with indian programmers and they are decent to good.

      Couple points.
      1) Yes the indian system is so hard that many commit suicide. The japanese used to do this to, once their standard of living came up they got lazy like americans and said, Why are we sacrificing our children to advance- we have advanced far enough.
      2) Yes the indian system is hard, so we are seeing the best and brightest- there are only so many best and brightest- as a result wage increases of 18% were

  • Remember Japan (Score:3, Interesting)

    by Saint Stephen ( 19450 ) on Saturday December 17, 2005 @11:40PM (#14282747) Homepage Journal
    I would opine about how India and China are going to become giant behemoths and own everything but I remember Japan. Remember movies about Japan in the 80s? Then remember the Japanese recession?

    China and India are different. I'm just talking about India here.

    Let's be brutally honest: we only outsource to India the dumb shit of life. They are like the Migrant Mexican workers, picking our vegetables or mowing or lawns or making the beds in the hotels: it's just some dumb shit we don't want to do. Calling to dink around with your account or reschedule your flight is just some other dumb shit we don't want to do, so we give it to cheapies cause, you know, what the fuck.

    So, if I was India, I would be extremely scared, because one significant advance in artificial intelligence means everything in India gets re-outsourced to robots. Let's face it, there's nothing an Indian can do that you can't do yourself on a website, barring mere technical limitations.

    Dig it?

  • universal (Score:3, Insightful)

    by tomstdenis ( 446163 ) <tomstdenis@gma[ ]com ['il.' in gap]> on Sunday December 18, 2005 @12:09AM (#14282858) Homepage
    No matter where you come from, where you were educated, if you don't have the two brain cells rubbin together to form innovative solutions to REAL problems people have, you won't get/hold a solid job.

    Simple as that.

    I don't care how many degrees from whatever school you have. If you can't see past the quick buck to real problems and their solutions you're just a tool in my eyes. People look down on Indians and Chinese because they're a dime a dozen [literally and figuratively] but what makes you think your neighbours in your comp.sci classes are any more competent to do productive work?

    I'm all for making money but only off things of value. Otherwise you waste a lot of time trying to sell [re: market] things of substantially lower value [re: intel processors] just to make sure you can stay in business [re: partner with Dell].

    Tom

    • Re:universal (Score:4, Interesting)

      by RembrandtX ( 240864 ) on Sunday December 18, 2005 @03:03AM (#14283477) Homepage Journal
      having, in the past, worked with indian call centers, [IE flying to india, and training staff to answer the phones for a previous employer.] The reason I consider Indians a dime a dozen is because they were.

      Literally, we had 10 staffing agencies give us over 10k people to screen. The requirements were as follows :

      Must speak english fluently,
      Must have a degree in computer science,
      Must have call center experience.

      out of the 10k that showed up .. EVERY SINGLE ONE had certificates that said they met all three requirements. [IE Language skill schools certification, degrees, resumes listing years of call center work.] Around the 700th interview, we figured out something was wierd ... the people who had passed english fluency exams, couldn't answer simple questions asked them in english, like 'how old are you' or 'what is your name'. The people with degrees in computer science, had trouble turning on the test PC we had set up, the ones that could turn it on, had problems opening up ACT, or answering a list of simple technical questions we had: [how can you tell if a cat-5 netword card is working, how do you start up a web browser, how do you ping another computer] let ALONE any programming questions. The ones that had call center experience, were having problems transfering a call to another phone, putting people on hold, and dialing another country.

      All in all .. we were mystified, but skeptically drudged through more interviews, somewhere around the 1200 mark, I personally got a guy who spoke decent queens english, was technically compatent, but had only 1 call center job. I asked him, politely, to tell me why i should hire him over the 1200 people i had spoken to so far. His answer was simple :

      'I am actually fluent in english, and I really have my degree - I may only have 1 call center listed on my resume, but I actually worked there - and you can call this number [which was in the UK] to verify that I was employed.' He then went on to tell me that he was SURE that lots of people had impressive references, and said they had degrees etc, but that in India - there was a whole black market of places that would sell you certification for whatever you needed to get a job.

      out of the 10k people they sent us, we barely got 50 .. thats FIFTY .. people who could pass all the tests. [we had been expecting to get 1k easily]

      My personal favorite was a guy who MUST have been 80, who repeated 'Yes, I am perfectly fluent in English.' over and over, no matter what we asked him. [Including when we told him he could leave the interviewing room.]

      The impression we got from the people we hired, was that we were paying very well for a call center, and that many people figured that we would be hiring like any other call center - basically, anyone that breathed. So they just did what they always do, get papers that could be attached to a form that is sent to the US showing they were qualified, and apply for the job.

      Apparantly MOST US and British companies don't actually do what we did. They just hire a local guy to staff their centers for them. Who normally train folks to just read a set of scripts. Anyone will do. [Normally this fellow will take bribes from people desperate for work - to give them the priveledge of working.]

      So when you ask what makes me (personally) think that a guy in a US college class would be more productive, My answer is that at least I have a very high certainty that he really is trained in what his degree is in, and if I am skeptical, I can verify the college is accredited, and call them to check his facts. I can call his previous employers, and although leagally they can't tell me if he was a crappy worker, they can at least verify that he DID work there, and the dates he worked there, how much notice he gave, and what his salary range was.

      He may not work as hard, as some guy in india who REALLY needs the $2 a day, and he may not be as cheap .. but at least I know he speaks english, really has his degree, and could actually DO the job.
  • all the $10K/year, no-benefits programming jobs any country could every want and then some!
  • In another news item, the Economist reports that in 2050, there will be 8 billion Indian IT workers employed.

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