India extends IT outsourcing boom

passingby

India extends IT outsourcing boom

India controls 44% of the global offshore outsourcing market
Exports of Indian software and services have grown by more than a third in the past year, with further rapid expansion predicted for the coming year.

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for all of us IT people out there in the west.... doesn't it make you want scream and cry?????

crvlvr

The story that I would like to see in the mainstream media is why companies choose to out-source. The Indian companies cannot force them to. Most of the companies based in the US or any other country have instead made these decision for mainly two reasons:

1. To improve their bottom line (read larger executive bonuses due to lower costs)
2. They are unable to find qualified people in their own country.

Although "lower cost" (#1) is thrown out as the main reason, many executives are beginning to admit that #2 is tehe real reason. Thomas Friedman, a New York columnist has written a number of columns on #2. Here is one of them that talks about the falling education system in the US -- New Dawn in the East, but US still Asleep.

To summarize (from another column),

" I just interviewed Craig Barrett, the chief executive of Intel, which has invested millions of dollars in trying to improve the way science is taught in US schools.

Barrett said Intel can be a successful company without ever hiring another American. That is not its desire or intention, he said, but the fact is that it can now hire the best brain talent ‘‘wherever it resides.’’ If you look at where Intel is making its new engineering investments today, he said, it is in China, India, Russia, Poland. While cutting-edge talent is still being grown in America, he added, it’s not enough for Intel’s needs, and not enough is being done in US public schools. "

xealot

It doesn't make me scream or cry as an IT tech ... it makes me think "Maybe I can go to India and get a job there" ... very tempting

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sshekhar

I have been in software apps for sometime. I work for an American corporation at a very expensive rate. I used to think that out-sourcing was all about the bottom line, until I got a chance to work with some of these companies based in India. The last thing I expected was quality from these guys. What scares me is that these guys can provide quality that I cannot begin to imagine from people here in the US?

I had to do some integration testing of my code with these guys and they would stay in their India offices till 2 am their time and make sure everything worked before they left for home. And they would be back at 9 am their time!! It was incredible. My project manager on the other hand (educated at a top 10 US university with several years at a good consulting firm) was full of shit. He was lying through his teeth to the clients and making us all look bad. Another thing I saw with these outsourcer companies are that they are really good project managers (hard task masters and no compromise in quality). I guess thats because these guys have to prove something to their clients in US.

I am pretty sure there are quite a bit of worthless companies in India, but some of these guys are incredibly good. Their work ethics in particular is commendable.

Nick-H

Personaly I don't think working until 2.00am (except in emergency) is commendable.

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DoDi

I work in IT at a company that is outsourcing a lot of work to India and at the same time slashing it's employees with hefty layoffs. It's been quite stressful for many people and needless to say moral has suffered quite a bit.

Personally I remember working on projects with demanding managers, long hours, late nights, weekends (once I went to work on a Friday morning and didn't return home until Monday... and all that time was spent awake working).

We were energized, enthused, and excited. We did tremendous work, brought in new technologies and revolutionary designs. Implemented killer apps.

This motivation has sadly evaporated. The architecture, design opportunities, and new systems development has been (or is being) outsourced. What is left is to baby sit legacy systems. No wonder the companies contracted to do the new systems development (some in India, others are domestic 'consultant' companies) have the motivation and work ethic.... they have the 'sexy' work that programmers go into the business to do. It has always been the case, whether new development is internal or outsourced, it inspires hard work from the very joy of doing it.

Bottom line is that non-debatable budget advantages and 'scalability' considerations are driving the outsourcing trend. There is also some short-sightedness on the part of upper management, and somewhat repulsively enthusiastic a** kissing on the part of lower level management to please thier gungho executives and embrace the outsourcing mantra, and the ever present love of the latest fad (some of you may remember having your personality diagrammed in those wierd and expensive seminars and who can forget the bloody years of the methodology wars....).

In moderation outsourcing can make sense. But unfortunately IT management never does things in moderation, they will now again as always drink the favorite koolaid flavor of the month by the barrel until the next silver bullet appears.

I would also like to add a bit about Thomas Friedman who I find very entertaining to read. I love his stories and antedotes, as well as his simple view of the universe. I would only suggest that you also check his record for being right.... it's pretty dismal. For instance in the Lexus and the Olive Tree his top three examples of the success of globalization whom he recommended to us throughout the book were 1) Bill Clinton 2) Enron and 3) Argentina.

Don't believe everything you read.

Personally I'm ready to retire so it's ok for me, but I feel sorry for the IT workers who aren't.

DoDi

This is a very good topic... thanks to passingby for posting it.

I have a followup question to those of you who work in IT outside of India. Have you noticed anti-Indian resentments around you, and how does it affect you (assuming that you as an IM'er are a bit obsessed and in love with India). It makes me quite uncomfortable seeing India getting linked and therefore blamed with the whole outsourcing phenomena and the negative feelings I hear sometimes expressed towards India. I love and respect both my co-workers and India, so I feel somewhat caught in-between.

pkalra

I work with a big IT giant downunder and we are sending lot of work to India because of various reasons !!!

I've seen people complaining about the whole thing because I think they fear for their job, and YES anti-Indian sentiments are increasing and you can feel it regulerly now.

I've seen some middle management level people going out of their way to stop the work going to India , by any means they can !!

adihere

Top management usually pushes for outsourcing while middle management try to delay things ,i find this very quite common during the transition phase.

tough part is friends become foes overnight

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Anders

I'm not in IT as such, I work in wireless telecom. The outsourcing I have seen have gone to Eastern europe and China, very little to India and what has been outsourced is old stuff.

Digital Drifter

this too will pass; it's a race to the bottom; a walmart one to boot.

rikko

I am in a telecom co in UK. Having been involved in outsourcing since the mid-90s, the indian companies have improved and evolved a lot. As a manager based in US/EU it requires a lot more effort to make sure that things flow thru smmothly and things do not fall thru the cracks. I have noticed that there is no direct discrimination but when issues arise the outsource co gets the blame more often than not. As a manager, managing engineers in India I spend a fair bit of effort to make sure that issues get tracked and analysed for the next time when "blamestorming" happens.
On the positive side I get to go to Chennai, once in a while.

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agni5454

15 hour work day? are they mad? (US norm: 8 hour work day)

So you are saying that they do close to 2 years of work for 1 year of work in US?

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passingby

my theory on outsourcing is... the management... they are all big time idiots!
what they don't realize is that all those goodies they implement in India, which led to thousands of unemployed people in the west, not that many people will have the money to buy them in the west.

since the outsourcing in IT created big time recession in the western world, nobody is willing to pay money to buy new products in the west. I am talking about the regular employed users, who once upon a time had money to buy new cars, cell phones, IT products, etc.

so outsourcing to India, did nothing but boost up Indian economy and led to recession in the Western world. which by all means, Indians are happy about.

and who is responsible for this? the big heads, the governments who allowed this to happen.
what they don't realize is that in the end they lose big, since nobody can buy those goodies produced in India or China, either than Indians or Chinese people, but that means that they will have to sell their products at a lower price and they won't make much profit.


and yes, This article does make me want to scream and cry....

Nick-H

Mad? probably not, young, ambitious and, above all, pressured by the environment I should think. There's a lot of long-hours working done in UK too: I thought we got it from America, maybe I'm wrong.

My view is people should have a life, that way we will work better.

Yes, as an IT manager I have worked around the clock to recover systems ready for work the next day, but to do so on routine or production work is just daft.