Why I Outsource Offshore

Friday, July 18, 2003 | Me

[FoxPro]

Why I Outsource Offshore

Friday, July 18, 2003

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.

A little information on the team:

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.

In conclusion:

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.

Should I mop floors to keep an American in a cubicle, I will let you decide.

[FoxPro]

I'll wager I can do what 3 people from your Russian team can do in the same amount of time,

Hey RockyMtnMan we have already, well, we are actually almost done with it. Do you want me to send you the specs, and do it again? How good is your Java? I have an active NDA on the whole thing, which could cause a problem.

How about the next big project we have, you could try that one out. It entails cutting out and resizing 250,000 digital images. I will send them to you and lets see if you can beat the 100 graphic designers who I am assembling in India. We think it will take them 2 months to plow through them. Wana race?

[RobFromGa]

bump to read later. interesting question raised.

I personally sell European machinery (as well as American machinery) in the USA for (gasp) money.

[RockyMtnMan]

How many people assembled your deliverable and how long did it take? If the metrics are right I might take you up on a redo or I could tell you how long it would have taken me based on my past experiences (good info for you). Although I was looking for a simple sub-task in a larger current project plan that could be measured.

I do have a job of my own so I have to limit my time to the realm of the reasonable. Perhaps your next Java project we can compete. I am a Java expert in many areas, XML, J2EE, etc. NDA's are not a problem, I just have to sign them.

As for your low skilled monkey job, I'll leave that to your Indian branch. I have no problem with unskilled labor going to foreign countries only high paying professional jobs (cutting and pasting is not graphics design).

You don't by chance work with porn sites do you?

[FoxPro]

You don't by chance work with porn sites do you?

Nnnnnooooo....... But if you can get me a job in a porn movie, I will do that for free; I would definitely not outsource that! I have always wanted to perform in a porn movie, and I think I would do very well. In fact every time I have performed using these skills, the results have been quite good. In fact this is one area that I would probably beat the Russians in every time.

Get me into a porn movie and I will let you do all the Java you want.

[RockyMtnMan]

Get me into a porn movie and I will let you do all the Java you want.

LOL! You sound like someone I know that's moving to LA to make it in a band. He knows a few people I'll ask him to set you up. You have to pay me for the Java work though (no porn work though, against my beliefs) ;-)

[mdmathis6]

"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."


After-all as an RN, 16 years in the career dealing with poop, spit and blood, I make around 23/hr not including shift differential.(I started at 8.25/hr). Coders with advanced degrees aren't going to accept 14/hr when they know that a career field such as nursing that is undervalued in society(not in a money sense) is paying starting nurses around 16 to 18/hr. (many RN's have just AAS degrees too, not BSN's)

There have been attempts to bring in nurses from other countries, to in part relieve the nursing shortage for years, but the attrition and burn-out rates are so high,(with the need also for nurses in other countries) the importees hardly make a dent. Also the importees, often have not tested well on the required tests and their language skills are limited. Filopino's have adapted fairly well in the past, though the latest crop haven't been as good.

Nursing is also a field in which nurses tend to "eat their young". The work-place models tend to foster a "pecking order" scenario, coupled with a dominantly female heir-archy which is stuck some-where between the enjoyment of the perks of Chivalry with the so called "empowerment" of modern feminism. Males can survive as nurses better now than before, though I am often bemused at the confusion in the women as to how to treat the males. There is simmering resentment because the male is doing 'woman's work, but they can't admit to it because feminism says there should be no gender based discrimination. The work has changed, it calls for much more analytical thinking and planning(which men do a good job at) for what to do for your patients and less of the mopping of the brow and the holding of the hand(though that is important too).

I don't know about the social world of coding, but it some-times seems more attractive, even at 14/hr then some of the social crap I have to put up with, and that's not from the patients! Just observe what happens on a nursing unit when a nurse announces all the crimes of her current consort and that she plans to leave him. The males have to step very carefully around that afflicted one,transference issues are very common, pro and con. One male may be seen as the white knight and the other the very likeness of the Satanic husband himself. Men get criticized for not "thinking emotionally", but that actually is a very good stregnth as allows him to be "above the fray" in an emergency in a way that woman have trouble understanding.

I would like them try to out-source nursing...what is happening more and more instead, is that nurses are being "credentialed" to do more of what physicians used to do, there-fore reducing the need for higher priced physicians.

[lelio]

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?

You could have written into your contract that your liability limit is the cost of your fee.
However this brings up another point: what happens if those programmers you've hired turn around and use the same code on another project? Now a second company has the first one's IP and might use that to gain access to their system.
Granted that can happen with any programmers you hire.

[BlazingArizona]

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.

Oh, you're infallible then. But my question stands: do the clients believe that? And if you need to insure against E & O, what fraction of your client rate does that work out to?

[FoxPro]

Oh, you're infallible then. But my question stands: do the clients believe that? And if you need to insure against E & O, what fraction of your client rate does that work out to?

No, it really never gets to that if you set your milestones properly. Most development fails because of management arrogance. Project failure is always based on political arrogance, which was always based on outdated American management models. We don’t work that way. We don’t do anything we don’t completely understand. That is not an issue here. We don’t do politics.

[austinTparty]

You obviously don't know Jefferson too well, then.

[riri]

them to you and lets see if you can beat the 100 graphic designers who I am assembling in India. We think it will take them 2 months to plow through them

Can you explain this process further? I am a graphic designer and you have peaked my curiosity.

[FoxPro]

Send an email to jroehl2 @ yahoo.com. (minus spaces). What I have to tell you will blow you away. You wont forget the phone call we will eventually have.

[BackSlidenDemocrat]

Good luck with your new endeavor foxpro! I was fortunate enough to be laid off in the first wave of the IT downsizing/off-shoring phenomenon. Seven months later I took a job for almost 30% less than what I was originally making. It was still decent money, and I feel fortunate to be employed now for the last two years in the IT industry. What would one expect when the value of highly leveraged tech stocks plummeted almost 90% in the Nasdaq. The company’s stock that I work for now was trading over a hundred dollars a share then, and now it bounces between twelve and sixteen dollars a share.

However, I know I am one of hundreds of thousands US wide that are now questioning everything that I have done for the last 15 years due to this offshore phenomenon. It started with the manufacturing industry and has moved into the IT industry. The real question is what will be the next industry to deal with this vortex that is sucking jobs and money out of the US and into somewhere else in the world. Looking at the big picture of this phenomenon shows me an America that is not as rich and wealthy in the middle-class structure in the future. That means that the overall tax revenue base is reduced long term, and with Government spending increasing each year at three to four times the rate of inflation, I see a breaking point that will cause most middle-class Americans to shake in their shoes.

I’m not a doom-and-gloomer, but I know something has to give down the road though, and if most of the unemployed middle-class Americans have to accept 30% to 60 % pay cuts, we have only seen the beginning of the losses to come. The first wave of Baby boomers start retiring in seven years and the Government deficits are now at early 80’s levels. At that time, there was a lot of opportunity springing up from centralized computing systems moving to distributing computing systems. Unfortunately, I don’t see anything like that at this point. I wish we all could become PM’s and have our own little group of mad Russian programmers, but then again, I think you are very fortunate Foxpro. Just don’t be surprised when you bid a big job in the future and are on the line for more code than you can deliver yourself in a lifetime and the Russians are no where to be found. Trust me, they will follow the money, and if someone comes along and gives them a dollar more, you my friend will be scurrying to find new programmers. Don’t fret though there’s a world out there full of them now.

What I see is a world around me where my fellow brothers are now suffering because of this offshore phenomenon. No, I wouldn’t want you to think it is anyone in particulars fault, but just remember this age old truth that has been passed on for thousands of years: Do unto your neighbor that which you wish him to do unto you.

Good luck Foxpro, and let your conscious be your guide.

[austinTparty]

When you have a global economy, you have to have global agencies to govern it. An economy is what a government is based on.

Nope. And nope. Taking the second part first: A government exists to secure our rights. Period. As for the first, all that is necessary for worldwide trade is enforceable contract law and private property protection. You actually need more government interference to REGULATE trade; with free trade (i.e. no tariffs, no quotas) you don't. Regulate trade, regulate everything else... sure.

[BraveMan]

Made right here in America, with highly skilled, highly paid Union labor. Sold all over the world. Battled by tough competitors in the U.S. and abroad; China, India, Germany, Italy, Japan, Australia & Great Britain, to name a few.

Employee owned, in our 135th year. Don't condesend to tell me it can't be done . . .

[Cronos]

Aye, that's the things. Good ole American ingenuity will get us through. getting complacent about being an 'expert' in obsolete technologies and expecting a job for life or being an 'expert' in HTML (I have heard of quite a few folks who term themselves as such, with the same level of knowledge and then gripe about their jobs being lost) is silly and asking for a Japan like recession. We can beat this and not become a commie state with government funded controls under the 'rats.

[William Terrell]

Nope. And nope.

Nope and nope. That is, (first) when you have a global economy, you don't have global agencies to govern it; and, (second) an economy is not what a government is based on?

Taking the second part first: A government exists to secure our rights. Period.

What in the world does the purpose of a government have to do with what enables it?

As for the first, all that is necessary for worldwide trade is enforceable contract law and private property protection. You actually need more government interference to REGULATE trade; with free trade (i.e. no tariffs, no quotas) you don't. Regulate trade, regulate everything else... sure.

Oh? Who enforces that "enforcable contract law and proterty protection"? The regulatory agency of a particular country? Which country?

And here I thought the WTO stood for "World Trade Organization".

[austinTparty]

Essential to capitalism and trade are effective judicial systems in EACH country which are recognized by the others. This does not equal "global agencies". Who enforces? We do not belong to a World Court. Groups such as the WTO are far different from a government with an enforcement branch. Trade agreements are voluntary--the threat of retaliatory trade sanctions is sufficient for agreement.

With free trade even this would not be an issue.

[JoeSchem]

If you need a tech writer who can write in good, everyday english for the non-technical end user, let me know!

[PuNcH]

"I had [once] persuaded myself that a nation distant as we are from the contentions of Europe, avoiding all offences to other powers and not over-hasty in resenting offence from them, doing justice to all, faithfully fulfilling the duties of neutrality, performing all offices of amity and administering to their interests by the benefits of our commerce--that such a nation, I say, might expect to live in peace and consider itself merely as a member of the great family of mankind; that in such case it might devote itself to whatever it could best produce, secure of a peaceable exchange of surplus for what could be more advantageously furnished by others, as takes place between one country and another of France. But experience has shown that continued peace depends not merely on our own justice and prudence but on that of others also; that when forced into war, the interception of exchanges which must be made across a wide ocean becomes a powerful weapon in the hands of an enemy domineering over that element, and to the distresses of war adds the want of all those necessaries for which we have permitted ourselves to be dependent on others, even arms and clothing. This fact, therefore, solves the question by reducing it to its ultimate form, whether profit or preservation is the first interest of a State? We are consequently become manufacturers to a degree incredible to those who do not see it and who only consider the short period of time during which we [had] been driven to them by the suicidal policy of England." --Thomas Jefferson

Jefferson was a strict constructionist towards the constitution btw. That might put a little more context on his quotes.