Indian outsourcers follow a megatrend

If your job can be done over a wire, your career is at risk, says the CEO of Infosys, India's second-largest outsourcer.
The New York Times

The story "Indian outsourcers follow a megatrend" published October 15, 2005 at 7:26 AM is no longer available on CNET News.

Content from The New York Times expires after 7 days.

[nasser0000]

The funny thing is ...

The Indians are now worried about China, since they undercut their prices.

Re: The funny thing is ...

India is not worried about China...If you see the recent news, lot of China s/w companies are visiting bangalore (India welcomes them) to see how s/w jobs are getting executed in INDIA and how the infrastructure should be...<br />Ofcourse as you said...India has not seen the actual effect yet..

[nasser0000]

The funny thing is ...

The Indians are now worried about China, since they undercut their prices.

Re: The funny thing is ...

India is not worried about China...If you see the recent news, lot of China s/w companies are visiting bangalore (India welcomes them) to see how s/w jobs are getting executed in INDIA and how the infrastructure should be...<br />Ofcourse as you said...India has not seen the actual effect yet..

China is lagging india by 10yrs in software

China is lagging India by more than a decade. Software Industry needs proper processes in place and English speaking population. <br />China is defintely improving but it has long way to go in software outsourcing.

Did you say English?

One thing is to speak English, and another one is to communicate --Two different things. <br /><br />Indian's so-called English is only a dialect spoken in India --and among Indians abroad. It's not the English that is spoken in the business world.<br /><br />Any criticism on the Chinese by Indians is null, as far as I'm concerned.

China is lagging india by 10yrs in software

China is lagging India by more than a decade. Software Industry needs proper processes in place and English speaking population. <br />China is defintely improving but it has long way to go in software outsourcing.

Did you say English?

One thing is to speak English, and another one is to communicate --Two different things. <br /><br />Indian's so-called English is only a dialect spoken in India --and among Indians abroad. It's not the English that is spoken in the business world.<br /><br />Any criticism on the Chinese by Indians is null, as far as I'm concerned.

[tsm26]

Ego trip

Maybe it is the culture barrier, but this guy sounds like he thinks he is the greatest thing since sliced bread. One of the biggest egos I have heard in a while. This year I took a consulting job from an Indian company because of three things, distance (time), language, and quality of work. Do people understand that most companies outside of Fortune 500 like to meet face to face even with their programmers? I diagnosed a piece of code in one day that had been plaguing this Indian company for five months, and it was with PostgreSQL which I don't even know. It isn't that I was necessarily better, but I was there and could work through the problem directly and understand his needs. If we were all robots maybe then you could go all Indian. I have had many experiences with this type of thing, and more can be worth it. Technology is about speed, and if you don't care that your business processes can take twice as long then be my guest and go that way. What Americans need to be better at is explaining these things to make stupid CTOs and CEOs understand the benefits and costs with everything. I am a CTO of my own company, and I will not use outsourcing unless I am either doing business in that country, or it is hosting or something mundane like that. Now, so I also don't sound egotistical, I could be wrong, I just have not seen any evidence to corroborate much that he says.

[petermpham2003]

I am not sure technology is about speed ...

... I wish your belief is always true. However, I find business decision making to be on a balance between speed and cost effectiveness. In most cases, people uses technology for cost-saving from expected more efficiency. When the balance shifts to cost-saving, outsourcing will win. That explains why the outsourcing quickly becomes a trend during the past few years of economy downturn, while it did not excel during the Internet booming period (when speed is the key factor to reap the benefit of a crazy stock market).<br /><br />What people dont realize is the hidden cost of outsourcing in term of quality, which leads to the "speed" problem that you mentioned. I am sure this cost will be reduced as outsourcing companies such as Infosys gain more experience along the way as has been proven. In the mean time, they continue to attract attention on low bids. <br /><br />I think his comments are just simply frank and reflect his frustration of constant negative publicity on outsourcing in the US. I feel the same frustration from the Chinese who are also excused of dumping cheap products on the market.<br /><br />This is a challenge that US companies will face in<br />decades to come in the global economy. It is up to us to overcome it through business and technology innovations.<br /><br />BTW, I am neither Indian nor Chinese and also affected by the outsourcing trend in some ways.

Agree

I have to agree with you and with the price of gas these days, most businesses do not want to have to pay for travel expenses! Microsoft must be lovin Netmeeting about now!

I think I understand your point...

So, if I understand what you're saying, you possess the problem-solving skills that you just don't see very often in others, usually from India or China.<br /><br />Well, I have to agree. While some folks (mostly the Indians themselves) point out that education in India is much more rigorous than here in the US, at best, it stresses more learning by rote, more achievement through duplication and emulation, than the ability to problem solve, adapt and fix. <br /><br />So, for those jobs where you need low production costs, true grunt code development, etc., going offshore may not be a problem. But true innovation and, therefore, wealth creation, will remain in the US.

[tsm26]

Ego trip

Maybe it is the culture barrier, but this guy sounds like he thinks he is the greatest thing since sliced bread. One of the biggest egos I have heard in a while. This year I took a consulting job from an Indian company because of three things, distance (time), language, and quality of work. Do people understand that most companies outside of Fortune 500 like to meet face to face even with their programmers? I diagnosed a piece of code in one day that had been plaguing this Indian company for five months, and it was with PostgreSQL which I don't even know. It isn't that I was necessarily better, but I was there and could work through the problem directly and understand his needs. If we were all robots maybe then you could go all Indian. I have had many experiences with this type of thing, and more can be worth it. Technology is about speed, and if you don't care that your business processes can take twice as long then be my guest and go that way. What Americans need to be better at is explaining these things to make stupid CTOs and CEOs understand the benefits and costs with everything. I am a CTO of my own company, and I will not use outsourcing unless I am either doing business in that country, or it is hosting or something mundane like that. Now, so I also don't sound egotistical, I could be wrong, I just have not seen any evidence to corroborate much that he says.

[petermpham2003]

I am not sure technology is about speed ...

... I wish your belief is always true. However, I find business decision making to be on a balance between speed and cost effectiveness. In most cases, people uses technology for cost-saving from expected more efficiency. When the balance shifts to cost-saving, outsourcing will win. That explains why the outsourcing quickly becomes a trend during the past few years of economy downturn, while it did not excel during the Internet booming period (when speed is the key factor to reap the benefit of a crazy stock market).<br /><br />What people dont realize is the hidden cost of outsourcing in term of quality, which leads to the "speed" problem that you mentioned. I am sure this cost will be reduced as outsourcing companies such as Infosys gain more experience along the way as has been proven. In the mean time, they continue to attract attention on low bids. <br /><br />I think his comments are just simply frank and reflect his frustration of constant negative publicity on outsourcing in the US. I feel the same frustration from the Chinese who are also excused of dumping cheap products on the market.<br /><br />This is a challenge that US companies will face in<br />decades to come in the global economy. It is up to us to overcome it through business and technology innovations.<br /><br />BTW, I am neither Indian nor Chinese and also affected by the outsourcing trend in some ways.

Agree

I have to agree with you and with the price of gas these days, most businesses do not want to have to pay for travel expenses! Microsoft must be lovin Netmeeting about now!

I think I understand your point...

So, if I understand what you're saying, you possess the problem-solving skills that you just don't see very often in others, usually from India or China.<br /><br />Well, I have to agree. While some folks (mostly the Indians themselves) point out that education in India is much more rigorous than here in the US, at best, it stresses more learning by rote, more achievement through duplication and emulation, than the ability to problem solve, adapt and fix. <br /><br />So, for those jobs where you need low production costs, true grunt code development, etc., going offshore may not be a problem. But true innovation and, therefore, wealth creation, will remain in the US.

[kartbart]

Keep dreaming and drinking that coolaid

Yeah, China is lagging by 10 years, but their infrastructure is 50 years ahead of India. So they'll catch up in the next 2 to 3 years. And when it hits you, you'll know ... because you won't be ready.

[kartbart]

Keep dreaming and drinking that coolaid

Yeah, China is lagging by 10 years, but their infrastructure is 50 years ahead of India. So they'll catch up in the next 2 to 3 years. And when it hits you, you'll know ... because you won't be ready.

[Earl Benser]

You can outsource the jobs...

... to Mars if you want. But,wherever it is you happen to chose <br />for outsources, if you can't find people who can communicate <br />effectively with your customers, you'll be going dead in the <br />water. And that seems to be the basic problem with outsourcing <br />to any off shore site. The offshore personnel speak a form of <br />English, but they do not speak American, they do not <br />understand the American culture or customs, and they usually <br />have very little idea of what an American customer is saying over <br />the phone or in an email. The offshore personnel try hard, but <br />they just keep missing the critical points when trying to <br />communicate.<br /><br />So, outsourcing is definitely cheap, and the outsourcing <br />companies get exactly what they are paying for.... cheap <br />customer service.... and they also get unhappy customers in the <br />bargain.

[GrandpaN1947]

True but

"American" companies who outsource know all this and they don't care if we(Americans) are unsatisfied. They are saving money and that's all that matters. What do they care if Americans buy their products? They can make more money selling overseas, and that's what they are doing. They are making the products where they will end up selling them.<br /><br />America is a dead country. Our traitorous leaders have outsourced our standard of living. The "American" stock market prices are determined more by what happens overseas than by what happens here in the US. Watch the interest rates go up, watch the housing market crash, watch the stores go out of business after this Christmas bust. In America you either have a high IQ and can serve the super rich in the medical field or you have an average IQ and are serving the rich in a low wage customer service job with crappy medical coverage. <br /><br />It's the "Third World American Economy". Half your wages go towards energy, 30% goes toward health costs, and 20% goes toward everything else, and there's nothing left for economy lifting spending. When the FED raised interest rates in 1997 to "control wages" they put us back ten years. With the Bush support of CAFTA it will put us back another ten years.<br /><br />Voting won't help. The Democrats support the same policies that got us here. Too much naturalization, too much outsourcing, not enough good government. If the private sector doesn't want to build refineries then the government should! Tax cuts for the rich have to stop. We need a third party, one that cares about Americans.

[smcgui5]

Whatever

You outsource the hell out of any job position in the world. It makes no difference to me. However, at least get good telephone and communications equipment. Everytime I have to call Micrsosoft for an issue, I always get some bad static connection with an Indian person on the the other end. It's not the fact that they are Indian, but it'sa the fact that I can't hear a damn word they are saying becuase of the quality of the connection.

[Earl Benser]

You can outsource the jobs...

... to Mars if you want. But,wherever it is you happen to chose <br />for outsources, if you can't find people who can communicate <br />effectively with your customers, you'll be going dead in the <br />water. And that seems to be the basic problem with outsourcing <br />to any off shore site. The offshore personnel speak a form of <br />English, but they do not speak American, they do not <br />understand the American culture or customs, and they usually <br />have very little idea of what an American customer is saying over <br />the phone or in an email. The offshore personnel try hard, but <br />they just keep missing the critical points when trying to <br />communicate.<br /><br />So, outsourcing is definitely cheap, and the outsourcing <br />companies get exactly what they are paying for.... cheap <br />customer service.... and they also get unhappy customers in the <br />bargain.

[GrandpaN1947]

True but

"American" companies who outsource know all this and they don't care if we(Americans) are unsatisfied. They are saving money and that's all that matters. What do they care if Americans buy their products? They can make more money selling overseas, and that's what they are doing. They are making the products where they will end up selling them.<br /><br />America is a dead country. Our traitorous leaders have outsourced our standard of living. The "American" stock market prices are determined more by what happens overseas than by what happens here in the US. Watch the interest rates go up, watch the housing market crash, watch the stores go out of business after this Christmas bust. In America you either have a high IQ and can serve the super rich in the medical field or you have an average IQ and are serving the rich in a low wage customer service job with crappy medical coverage. <br /><br />It's the "Third World American Economy". Half your wages go towards energy, 30% goes toward health costs, and 20% goes toward everything else, and there's nothing left for economy lifting spending. When the FED raised interest rates in 1997 to "control wages" they put us back ten years. With the Bush support of CAFTA it will put us back another ten years.<br /><br />Voting won't help. The Democrats support the same policies that got us here. Too much naturalization, too much outsourcing, not enough good government. If the private sector doesn't want to build refineries then the government should! Tax cuts for the rich have to stop. We need a third party, one that cares about Americans.

[smcgui5]

Whatever

You outsource the hell out of any job position in the world. It makes no difference to me. However, at least get good telephone and communications equipment. Everytime I have to call Micrsosoft for an issue, I always get some bad static connection with an Indian person on the the other end. It's not the fact that they are Indian, but it'sa the fact that I can't hear a damn word they are saying becuase of the quality of the connection.

[gundeephora]

What an idiot you are

Do you need links to American racism?

[gundeephora]

What an idiot you are

Do you need links to American racism?

Down the rabbit hole we tumble!

Cause-Effect.<br /><br />1. Costs go up for American company.<br />2. Company outsources to India<br />3. Job losses of American force drive down demand for American company goods<br />4. Company needs to cut costs even more and rise prices<br />5. Indian jobs are outsourced to China, BTW no one in either country can afford the goods of the company either.<br />6. Company eventually goes bankrupt because no one is left to buy their products.<br />7. Repeat all above.<br /><br />In the end, the Americans and Indians lose but there are a lot of "outsourcing" consultants laughing all the way to the bank!

Down the rabbit hole we tumble!

Cause-Effect.<br /><br />1. Costs go up for American company.<br />2. Company outsources to India<br />3. Job losses of American force drive down demand for American company goods<br />4. Company needs to cut costs even more and rise prices<br />5. Indian jobs are outsourced to China, BTW no one in either country can afford the goods of the company either.<br />6. Company eventually goes bankrupt because no one is left to buy their products.<br />7. Repeat all above.<br /><br />In the end, the Americans and Indians lose but there are a lot of "outsourcing" consultants laughing all the way to the bank!

[gundeephora]

True, but...

I never said they were working under good conditions. Either way China is still the number one manufacturer.

[gundeephora]

True, but...

I never said they were working under good conditions. Either way China is still the number one manufacturer.

More about speed ...

I do agree with you on the significance of speed in a market-driven economy. However, not all business requires speed, e.g. slow pace maintenance, production, customer support, etc. Not to mention, there will be time when the balance will shift, e.g. the last economy downturn forces many US companies to control expenditures for survival. Many planned futuristic projects have been scrapped. <br /><br />At national level, we should have foreseen such things to come and prepare to deal with it to the best benefits of our society. For example, when the Japanese won over the automobile market in the 80s due to their more energy-efficient cars, the US auto companies did not do anything until their bottom line is threaten. Since then, they are just playing catchup. This is due to lack of vision on the part of business leaders. Yet, when business is down, the workers are the ones who pay for it.<br /><br /><br />There are efforts by some companies to develop competitive near-shore outsourcing companies. With a few hundred bucks more, we can have true Americans, who can serve the needs of our economy to save cost. Yet, they come across on the news only once or twice, while the publicity on India outsourcing are all over the place, both positive and negative such as this one. I like to suggest US-based outsourcing companies in the mid-west as an alternative here, but I can hardly recall who they are.<br /><br />These companies should receive more publicity and support for their contribution in keeping jobs in the US.

[ramarnath]

outsourcing :lessons to be learnt

Super expensive consultants caused this to happen in the first place. In the 90s most consultants (IBM/Oracle/Andersen/Deloitte) from fancy nameplate companies charged $200+ an hour for jobs that hardly deserved $75 an hour and they did not add value. I knew an ex-tank driver from Gulfwar at alltel in 1994 with a liberal arts degree working on test data creation charging $125 an hour + expenses. His employer was Andersen consulting.<br /><br />Most of them dined at fine restaurants, flew airlines paying full fare (at the company's cost) and rented every car in the rental lot. Companies in the US failed to keep the costs down. By 2001, these rates came down due to lack of demand (dot com crash) and cost cutting by companies that could not afford to spend $250/hr + expenses.<br /><br />Lesson here being, if you do not focus on efficiency, somebody else will and most companies and individuals are looking for reasonably priced products that have near acceptable quality. Guess why Rolls Royce is not the top selling car in spite of being known for top quality and nameplate. As more companies go in this direction, more outsourcing is going to happen.<br /><br />As long as American consulting companies can put a lid on costs, become more efficient, outsourcing can be slowed down a little bit but resistance is futile. I know someday somebody in Bombay will take my job too, can't do anything about it.

More about speed ...

I do agree with you on the significance of speed in a market-driven economy. However, not all business requires speed, e.g. slow pace maintenance, production, customer support, etc. Not to mention, there will be time when the balance will shift, e.g. the last economy downturn forces many US companies to control expenditures for survival. Many planned futuristic projects have been scrapped. <br /><br />At national level, we should have foreseen such things to come and prepare to deal with it to the best benefits of our society. For example, when the Japanese won over the automobile market in the 80s due to their more energy-efficient cars, the US auto companies did not do anything until their bottom line is threaten. Since then, they are just playing catchup. This is due to lack of vision on the part of business leaders. Yet, when business is down, the workers are the ones who pay for it.<br /><br /><br />There are efforts by some companies to develop competitive near-shore outsourcing companies. With a few hundred bucks more, we can have true Americans, who can serve the needs of our economy to save cost. Yet, they come across on the news only once or twice, while the publicity on India outsourcing are all over the place, both positive and negative such as this one. I like to suggest US-based outsourcing companies in the mid-west as an alternative here, but I can hardly recall who they are.<br /><br />These companies should receive more publicity and support for their contribution in keeping jobs in the US.

[ramarnath]

outsourcing :lessons to be learnt

Super expensive consultants caused this to happen in the first place. In the 90s most consultants (IBM/Oracle/Andersen/Deloitte) from fancy nameplate companies charged $200+ an hour for jobs that hardly deserved $75 an hour and they did not add value. I knew an ex-tank driver from Gulfwar at alltel in 1994 with a liberal arts degree working on test data creation charging $125 an hour + expenses. His employer was Andersen consulting.<br /><br />Most of them dined at fine restaurants, flew airlines paying full fare (at the company's cost) and rented every car in the rental lot. Companies in the US failed to keep the costs down. By 2001, these rates came down due to lack of demand (dot com crash) and cost cutting by companies that could not afford to spend $250/hr + expenses.<br /><br />Lesson here being, if you do not focus on efficiency, somebody else will and most companies and individuals are looking for reasonably priced products that have near acceptable quality. Guess why Rolls Royce is not the top selling car in spite of being known for top quality and nameplate. As more companies go in this direction, more outsourcing is going to happen.<br /><br />As long as American consulting companies can put a lid on costs, become more efficient, outsourcing can be slowed down a little bit but resistance is futile. I know someday somebody in Bombay will take my job too, can't do anything about it.

[Des Alba]

Not Always A Good Experience

I want to add that not all outsourcing is good for the customers. Many of my techs have told me that their experience with outsourced Help Desks were frustrating and not at all helpful. It appears that the people work from a scripted response and are not knowledgeable enough to answer specific technical questions, usually answering inquiries with "did you try this" or "did you try that". My techs do not call the Help Desks until AFTER they have exhausted all local means. There have been some instances where there was a language problem as well - I won't mention any specific manufacturers to save them embarassment.

[Des Alba]

Not Always A Good Experience

I want to add that not all outsourcing is good for the customers. Many of my techs have told me that their experience with outsourced Help Desks were frustrating and not at all helpful. It appears that the people work from a scripted response and are not knowledgeable enough to answer specific technical questions, usually answering inquiries with "did you try this" or "did you try that". My techs do not call the Help Desks until AFTER they have exhausted all local means. There have been some instances where there was a language problem as well - I won't mention any specific manufacturers to save them embarassment.