Why I Outsource Offshore

When the planes hit the World Trade Center, I was sitting in my cozy sunroom home office. Living in Fairfax County Virginia, we actually heard the plane that hit the Pentagon fly very low overhead. We knew something else was going to get hit. Then we actually heard and felt the explosion. The next minute my son and I were outside in the street looking up into the sky. We didn’t know what to expect.

I didn’t know that my life had radically changed that day; I knew the country had, that was quite apparent. But the downward spiral I was about to take wasn’t going to be pretty.

I remember telling my sons pre 9/11 about the phone calls I would get from headhunters, at least once a day. I would tell my kids’ that was real job security, having skills that were readily needed in the marketplace. I actually made $16,000 in about a day, tracking down a bug in a major government computer system. I remember working on another system on my laptop aboard a cruise ship in the Caribbean (the cruise ships had just gotten email capabilities, and my client had no idea where I was, and didn’t care). Talk about working from home! We all probably all have many great memories of the good times.

The week after 9/11, nobody returned my phone calls. I had a couple of contracts with a very large city government. We couldn’t even get into the building. Of course I later found out that the city was much more interested in detecting anthrax and acquiring and placing cement barriers than the work I was doing for them, tracking the maintenance of the cities trees and processing abandon vehicles left on the city streets. I was instantly unemployed. It was the end of an era.

It was time to send out some resumes, nothing, time to get out the Rolodex and tap into my “old boy network”, nothing. A month goes by, then two. I remember going to the local shoe retailer, because they had a sign posted looking for a store manager. I showed the current manager my resume, and he told me not to bother applying, they knew I would be gone the instant I got another tech job. Time to send out thousands of resumes, all over the world, nothing. Several months pass. I tap into my homes equity to pay the mortgage, sort of like chewing your own arm off. All my friends are doing likewise. We talk with each other, it deadens the boredom and pain, misery loves company.

Ok, so I am going to re-tool, so I buy some on-line coursework to learn Oracle 9i. I start digging in 8 hours a day, going through the coursework; I hate every second of it.

I actually started reading articles about offshore outsourcing here on freerepublic.com. I was upset by this as most people were. I had lost my wife by then, and it is apparent that the house that I had planned to play with my grandkids in will be gone soon also. I am at my low point.

Just through dumb luck, a complete stranger calls me up one day, and tells me he ran into my resume, and was impressed with my background. He tells me that over the last year, he has cobbled together a team of programmers in Moscow that can write computer systems in just about any language. He tells me they are quite good, and I believe him because I have worked with Russian programmers before. The he told me one thing that would change my career goals forever. The Russians will write computer systems, Including Oracle systems for as little as $15 per hour. In other words, I am beating my brains out to learn a computer database system that can be done elsewhere in the world for about the same price as is paid to a cahier at the local grocery store. This changes everything. I rewrite my rather lengthy resume.

I cobble together a list of email addresses of headhunters and other companies from several job boards. The title I put on my resume is “Offshore Outsourcing Project Manager”. In my resume under the skills section I put the rather lengthy list of technical skills the Russians posses. The list includes just about every major computer system I have ever come across. It is the ultimate resume. I mail out a few hundred. I don’t have to wait for long.

The next day, the phone rings. Another telemarketing call, I am thinking. The man on the other end of the line tells me he is looking at my resume. He starts explaining a project he needs accomplished, actually two projects. I have no idea what he is talking about. And I can tell he is getting frustrated. He tells me that he is going to email me his address, and I should show up the next day at 1 PM. I am excited yet confused. I don’t sleep well that night.

I am ushered into a boardroom a little after one the next day. I didn’t eat lunch, partially because I really don’t have much money, and I am a little dizzy (lost 30 pounds through the last 12 months). They start explaining the projects to me, three guys, a marker board and me for 3 hours. The last hour I am just sitting there with my mouth hanging open. I am starting to get what they want, two computer systems for arguably the largest retail chain in the world. They are massive undertakings using cutting edge technology, and it is obvious it will take dozens of programmers and other specialists (maybe more). Then they tell me how much they want to pay for all of this, and it isn’t much. But it beats the heck out of what I made in the last 6 months, which was nothing. At this point I am only thinking that I want to just get something going, anything. I just want something to do, any form of cash flow, to make some contacts and get the hell out of my house once in a while.

I instant messaged the Russians the next morning. They couldn’t believe whom the project was for or the massive scope of the undertaking. I had my Visio thing going most of the night, and I had some pretty dead on flow charts of what was explained to me, which I emailed to them. They started sending over some very impressive examples of XML scripts based on my previous nights work and the hours of conversations we had. The client liked it all. They were impressed. I could not believe what I was getting into.

We all signed the clients NDA’s, and wrangled over some small details in our various contracts. We put together a scope of work, and set a timeline with invoiceable milestones in MS Project (the Russians are very good at this also). My project leads wife had a baby, and we all send each other pictures of our kids. Weeks pass in preparation. I am starting to get to know these guys, and they work together as a precise seamless team (woman are not allowed in there office building). They work late into the night (5 PM EST is 1 AM Moscow time). The client is happy, we are busy and I can’t provide any further details for legal reasons. Suffice it to say your mother/sister/wife will probably use this system at a store near you within the next few months. And I get to point to it and say, “I did that”. I didn’t make much money off of it, but it sure beat sitting at home all day playing computer games.

They don’t speak English, but they read and write it well. In the late 80s the Russian defense industries essentially imploded, and a lot of very intelligent people were left jobless (sounds familiar). It was at about this time the Internet came into its own (well email initially). They started getting possession of US computer systems documentation. Many of them learned English by mastering these systems. It took them several years to do this. Thousands of hours of hard work and study. They are very good technical writers and write proposals and documentation like no others that I have seen. They are very productive, and are slowly getting rich (by there standards). I have never met any of them personally, but look forward to doing so someday. I do enjoy working with them. They are slowly becoming good friends.

Am I taking jobs from Americans, yes, do I feel bad about this, yes, do I have any other choice other than waiting tables, no.

Honestly, I think modern businessmen have no more foresight than farmers in the dustbowl, destroying the land to raise a single season's crop, without even a thought to the topsoil blowing away - so long as they make their quarterly target revenues, raise the dividend 1/4 of a cent, and move the hotplate under someone else's butt for a week or two.

I have some close insight to that which you speak. I can tell you these guys DO NOT think one moment beyond reporting the next quarters EPS numbers. They don't think next year, five years from now.

I see nothing wrong with this. If folks want to be dinosaurs, and grumble about the good old days as they lose all they've worked for ... so be it.

Belief in God, (Judeo Christian God), responding to change with undaunting courage, taking risk, is what has made America great. Today all you hear is moaning and groaning. yes, it's hard. But throughout history change has come along. At one time newspapers were type set, now that is automated and people adjusted or witthered away financially for not reinventing themselves. The same is true of technology today. Change is here to stay.

BTW offshore project managers will soon go by the wayside as well. The sucessful people will then reinvent themselves again. Losers won't. Losers will still be talking rather than doing.

I see nothing wrong with this. If folks want to be dinosaurs, and grumble about the good old days as they lose all they've worked for ... so be it.

BTW offshore project managers will soon go by the wayside as well. The sucessful people will then reinvent themselves again. Losers won't. Losers will still be talking rather than doing.

I'm not slinging anything, honest...

American consumers do in fact benefit from "offshoring" if it means they can buy things that they could not otherwise afford and wouldn't otherwise buy. Bought an American made TV lately? How come?

Comparative Advantage is a sometime cruel but inescapable economic priciple. If raw logs can be *shipped* to Japan, made into lumber, and the lumber made into furniture, and the furniture *shipped* back to the U.S. and that furniture is still cheaper for the same quality as something made here... who's fault is that? It is certainly not the fault of the consumer that needs a chair.

As I said privately, the cream will always rise to the top. It's just the way it is. If you took 50 people and gave them a large amount of money (you decide what's large) and checked back on them years from now, guess what - those doing well BEFORE being given the large amout of money will be doing even better. The ones not well off will still be in the same boat.

If the man selling gas at $3.40 was my brother and the man selling at $1.30 was out to take my house and my job, his house and his job, and all my friends' jobs, then yes, I'd buy from the $3.40 man, if quality was otherwise equal.

Cool. I wash cars for $1,000 apiece, brother. Come on over! :-) Just think what it'll do for the economy...

In theory everything can be made cheaper overseas and all services can be performed cheaper overseas. If we ship all the manufacturing AND the services what is left to generate wealth here? That worked great for manufacturing but now we are moving intellectual capital. Reducing buying power domestically to the point people stop buying seems foolish to me.

No consumers = no demand

No I haven't bought a TV in a long time, I did just replace a DVD player and the new one is just as much a piece of sh** as the first.

There are many of us who are unemployed because of things like this. It's not funny. Learning how to do more than 5X the normal technical skills of our previous generations of engineers, only to see those skills become meaningless??

It is not funny at all, and Pat Bechannon has nothing to do with it.

I can put up a sign in my yard that says I'll wash people's cars for $1,000 a car. Sure, they'll ignore me and go elsewhere for a car wash. Should I get in their face about not "supporting" the local neighborhood?

Quote of the night.

Well, Race, my friend. You need to become more competetive. Open a business. Learn to sleep on dirt floors and eat daily rations of white rice in the corporate dorm. Understand that if you clock in two minutes late, you will be docked half a days pay. A total of 27 cents.

It's a global world, Race, surely you must understand this.

The myth here is that you actually "exported" any jobs at all. Those jobs didn't exist until this client found that they could get the software for a price that worked for them. Had they only had the choice of contracting with a U.S. software firm, they would not have moved on the project. The jobs wouldn't have existed anyway. The real choice they had was to either hire you and your team, or not do the project at all.

No, they already made the choice to create the new software because they thought it would increase their revenue somehow.

Their choice WAS to hire Americans or foreigners. And they chose to outsource offshore, and keep Americans unemployed.

It will be even less funny when corporations move to other fields like accounting, legal services, etc. Ol' FoxPro's skill sets are significantly less than most of the high end engineers I work with (XML, Oracle = no brainer). I worked with a Russian engineer and he couldn't code his way out of a box, we offshored to India and it failed miserably.

The people with hot technical skill sets cannot be replaced and if they do get replaced the joke will be on the outsourcer (until India/China/etc catches up). As for the accountants and paralegals of the world, well they are screwed once the focus moves to them.

The core of what is driving this is that an offshore dollar is worth at least 50% more than an onshore dollar when yo compare local tax and regulatory burdens that our offshore competition has to bear. Russia has a 13% flat tax rate on idividual income and virtually no regulatory infrastructure for local businesses and customers to support. The reality is that, especially when local exchange rates are factored in, the dollar probably goes even more than twice as far overseas as domestically.

In theory everything can be made cheaper overseas and all services can be performed cheaper overseas. If we ship all the manufacturing AND the services what is left to generate wealth here?

BINGO. It's taking a while, but people are finally catching on.

It is important that we as Americans find something that we can do that provides enough value for the price that consumers are willing to pay us to do it instead of someone else. That is EXACTLY the nature of the problem. I happen to be a believer in Americans. I'm pretty sure we can kick the world's collective butts. We just keep trying to compete on the wrong things.

Kind of wierd reading your diatribe and especially the comments talking about cheaper is better and the various rationalizations about how you aren't taking away jobs from Americans.

It is everyone's responsibility to buy American. Those theoreticians who believe they are buying the same quality stuff at cheaper prices are fooling themselves. Also some TV's are made (and many assembled) in the USA. Most theoreticians are too busy theorizing to look for one.

As for your plan to save your butt, congratulations. I hope it keeps going so you never have to look for a job again because there won't be any thanks to people like you.

Quote of the night.

American society doesnt extend into Russia, communist China or India.

The reality is that, especially when local exchange rates are factored in, the dollar probably goes even more than twice as far overseas as domestically

How do you get the dollar to go farther here? It seems that if foreign labor is so cheap, and we import so much of their stuff, our prices should go down.

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