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.

I hope you are being sarcastic. Look, I don't like H1B, I don't like government policies that lead to jobs leaving our country, but what was FoxPro supposed to do?

That's the main problem I have. He's been painted into a corner where in order to survive (Fox was doing quite nicely for himself before) he has to go outside the US for labor.
You can't get angry at a man finding a way to feed himself in such a desperate time. Would we all rather he just pi** into the wind and become unemployed like everyone else?
The big elephant here that everyone in the administration is trying to avoid looking at is how to make this global economy work for Americans. I don't buy the argument that we're getting cheap shoes and the ChiComs are getting worthless scraps of paper that look like dollars. Real jobs are being exported wholesale to a communist country that would just rather see us wither away and die. Heck, they can always sell their stuff to someone else.
The only solution to this that I can think of is to return to the days before income tax and rely on tarrifs to fund our government. It probably won't be as much income, but then we're spending way too much on things that they shouldn't do.

Actually just wait until he has to compete with IBM's offshoring group.

At that point I would hope that the US government stops all business with IBM. It wouldn't surprise me that they're one of the people behind stopping the "Buy American" plan for our military. Why fund the companies that are selling rope to our hangmans?
I could never understand why companies today outsource their IT needs to IBM, the company that brought you $400/hr consultants that didn't know much more than you already did. Is it really cheaper using them? The only reason I can see it being so is that they can play hardball when someone asks for a raise.

Do you maintain political risk insurance and/or currency convertability insurance?

Have you tried hiring Amnerican programmers for the same rates you pay Russian programmers?

No and no. No US Java programmer is going to work for $14 per hour. And even if they did, they would probally not have a very good attitude about it.

Here's my favorite quote:

"China has the potential to become one of the top offshore markets in five years ’ time, and the attractions of an enormous domestic market (dream on). There are large numbers of skilled, low-cost IT professionals, and government initiatives could have a big impact in areas such as technology education and telecommunications (like Global Crossing). Language and cultural issues will obviously remain substantial."

Sounds like China is ok with giving their citizens a means to compete. I wonder what our government will do to level the playing field.

No and no. No US Java programmer is going to work for $14 per hour. And even if they did, they would probally not have a very good attitude about it.

You're right, I would never work for $14 an hour because I can't support my family at that wage. Thanks for lowering my wages courtesy of Russia. Hopefully you're intelligent enough to know when your "team" is sandbagging otherwise they'll take you for a ride even at $14 an hour.

No US Java programmer is going to work for $14 per hour.

You never know unless you try.

And even if they did, they would probally not have a very good attitude about it.

So you are concerned about attitude. I would suggest that perhaps if you offered the jobs in the USA first you might well be surprised and the economies from using USA programmers wouldmake up for the attitude you presume you will see.

I am really personally glad you are not taking advantage of the government handouts that are available for your operations but then again as a niche operation the recent devaluation of US currency must have had some effect on your costs. Perhaps your attitude on this will change as you see your children living in what is becoming a third world nation.

I wouldn't be able to sleep at night if I did.

That’s a good point, I don’t sleep. I have been a chronic insomniac since early childhood. So that makes me even more lethal, because I can outsource 24/7 and work with them on their schedule.

Actually I do need some sleep after 3 or 4 days, when the buzzing starts and I start losing balance. But even then it takes a good amount of barbiturates or Vodka (never both) to do the trick. Doctors study me now; I am like this cool freak for them to ponder about.

Why in God's name is this so hard to see for some people??

Well, I think because if some people are doing well themselves, they think the whole world is doing well. That's the only way I can explain it. It will be like that until the spinning wheel stops on their number and then it will be up. I'm with ya, man, I know where you're coming from. The only other thing I can add (if I may get religious for a sec) is what Jesus said on the Cross, "forgive them, Father, they do not understand." Keep up the fight, man, we have nothing to lose.

Would you like to make a little bet? Provided the skill sets are similar and we agree to some ground rules. I'll wager I can do what 3 people from your Russian team can do in the same amount of time, at a higher quality level. You get to keep all the work either way and if I win you never talk about offshoring on FR again.

We would need a neutral party to judge the results but I suspect we could find someone.

That's the main problem I have. He's been painted into a corner where in order to survive (Fox was doing quite nicely for himself before) he has to go outside the US for labor. You can't get angry at a man finding a way to feed himself in such a desperate time. Would we all rather he just pi** into the wind and become unemployed like everyone else?
The big elephant here that everyone in the administration is trying to avoid looking at is how to make this global economy work for Americans. I don't buy the argument that we're getting cheap shoes and the ChiComs are getting worthless scraps of paper that look like dollars. Real jobs are being exported wholesale to a communist country that would just rather see us wither away and die. Heck, they can always sell their stuff to someone else.
The only solution to this that I can think of is to return to the days before income tax and rely on tarrifs to fund our government. It probably won't be as much income, but then we're spending way too much on things that they shouldn't do.

Good point. In my last reply to Race Bannon, I'm not jumping on FoxPro at all, he has to survive like we do so I can't blame him as much as the circumstances that he and we are all in. I'm mainly upset at the notion of the free-traders who believe everything is OK and it is not.

I know myself, when I temped to get by, I worked for a software company in the accounting department that brought over H1B's by the boatload from India. Everyone who worked there was H1B except the accounting department. In a big way, I'm thankful for that experience because I was able to see it and experience it first hand of what is really going on. The salaries, yes, the salaries the H1B's made, they ranged from 40K to 115K. Myself, I'm lucky to top 20K with the wind at my back, the sun shining, going downhill, and all 8 cylinders firing. B-P This was in 1996/97. Sometimes you have to go in the Lion's Den to see what is really going on.

The smartest guy in the world was Ed Yourdon on a day in 1992 when he released the book named "Decline and Fall of the American Programmer". He predicted all this outsourcing mess.

The dumbest guy in the world was Ed Yourdon on a day in 1996 when he released the book named "The Rise and Resurrection of the American Programmer".

Outsourcing is an experiment with future results completely unknown. It may be a fad. It may lead to some horror stories down the road about projects gone awry. Legal battles may erupt due to unintended consequences. The government may start taxing outsourced transactions as a way of making up for the loss of income tax.

Don't go all wobbly just yet, folks.

No US Java programmer is going to work for $14 per hour. And even if they did, they would probally not have a very good attitude about it.

This brings up some related questions: if the offshore team fails to perform or includes some horrendous bug that shows up only after delivery, do you, as the broker, assume all liability? And will regular commercial E & O cover you for such things, or do you have to self-insure?

In either case, what percentage of your rate to the client is insurance against these calamities? How is the liability spread in case of foreign events beyond your control, such as nuclear war between India and Pakistan?

This brings up some related questions: if the offshore team fails to perform or includes some horrendous bug that shows up only after delivery,

I would probally move to Moscow. A bottle of good vodka is the equivalent of $2 here.

Actually, in 20 years, I have never worked on a failed computer project, so I am not sure what I would do. It seems like a very remote possibility. Failure is never an option.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.