joanna bujes wrote:
More interesting is the thesis that outsourcing is profitable for hi-tech companies. I wonder how they figure out that profit. The very large hi tech company I work for has outsourced a number of projects to India and China. I know first hand that the results of this off-shoring were nothing short of disastrous. Because of communication problems and inept management, the work done offshore had to be done over, about three times so far. This not only cost more time-wise and money-wise, but in the meantime, my company shipped products that looked like they were done in somebody's garage (while charging "enterprise" prices) and, I suspect, considerably tarnished their reputation and credibility.
This line is now emerging in the biz press. I saw something from one of the brand-name consultants the other day saying that 2004 will be the year of "reality-check" or some such for the whole trend. The savings turn out to be far smaller than the raw wage gap makes them appear.
i am not an expert on the matter, so this is just my opinion: i believe the above effect is temporary. programming is not difficult and it is well suited for outsourcing. those going through outsourcing disaster will learn from their mistakes... already, i know of many fellow indians in the US who are getting into the very lucrative career path of acting as a sort of outsourcing liaison, leveraging their knowledge of both worlds.
joanna, i actually greatly admire your company. they were internet pioneers and the geek in me looks up to their innovative work. but they were charging enterprice prices for badly put together products long before there was any outsourcing.
my guess is that when you add up the numbers, outsourcing will still be cheaper. i just read an article (i believe in business week) in which a programmer, who was earning $200,000 (!!!) a year, was complaining about the loss of her job and questioning what was wrong with america, etc. $200,000/year??? i could probably count on my fingers the number of programmers who deserve that kind of pay!
--ravi
