I read an article the other day about how a company up in Massachusetts is trying to prevent programming jobs from being outsourced to India. Obviously, this made me read the entire article, as it impacts me directly. Or well indirectly. OK, let’s be honest here: anything that stops Apu from getting what could be my job is important to me.
I had been faced with an outsourcing option before. One day, I was in my office and in walks in a new Suit with a plan: “We’re going to outsource this whole coding business to this Indian based company that works 24 hours a day.” The year was 2000, I believe, so it wasn’t commonly known that this could be done, but I had heard of it already. I quickly laid out the flaws of this plan, which was pretty simple: management here couldn’t decide on the color of a clear blue sky, when it came to product designs – how could they pack up a fixed set of requirements and send them across the world to a pack of mercenaries? And what’s worse, when they changed their minds on what they originally wanted (which happened weekly) wouldn’t it end up costing more money than if we keep developers on-site?
I won the argument. We kept our developers. And management thanked me every month, that I fought for my opinion.
But not every company has someone like me working for them – opinionated and willing to fight – so a number of companies have gleefully shipped parts of their business out to New Delhi. Some have learned that it won’t work for everything: Dell brought back some of their customer support to the states because of complaints in quality. I suffered a similar experience with D-Link – it took a full five minutes to get the guy to spell out my last name correctly – but since their products suck, their support options are the least of their troubles.
Enter this company up in MA. CMarket is a start up company that is putting together an auction system for online customers. When Jon Carson started his business, and things started rolling, the investors tried to convince the startup dude to outsource all of the ongoing development to an offshore center. He fought them but agreed that a dev staff can be expensive, so he eventually did something different: he hired people locally at a less than average wage.
This “lower wage” is where he got creative and for this I applaud his efforts, believe it or not. He says that the average salary for a software engineer is $80K; he offered the same job for $50K. His investors told him it would never work; he got buried in resumes from people looking for work. Now he’s got a talented in-house staff and the company is already profitable. How could this be?
I can sum it up for you. First off, I’ll assume that he didn’t go off and spend hundreds of thousands on “top level management”, and that’s a key starting point. It’ll play into later points, trust me. Then there’s the modern developer… I’ve worked in this industry for over a decade now and I can tell you firsthand… there’s nothing more crushing to a Geek than pouring your coding-heart into a project, or company, that collapses despite your best efforts. Many times I’ve helped to turn out some ass kicking technology, only to have marketing and/or sales and/or management fuck it all up, putting me out on the street again. I’ll make it even simpler: I’d rather work at less-than-average pay and for a financially sound company than make hundreds of thousands at a company that will “almost fold every six months”.
And what I mean by financially sound isn’t just about cash flow – it’s about making good and sound decisions about the business. Getting $20K in sales and then spending 99% of it to remodel a conference room is stupid. Blowing half a million dollars a year on a management staff that couldn’t collectively light a match is stupid. Hiring a VP that can’t copy and paste a bit of text in Word and then letting him sue you for three years after he quits is stupid. The only time I’ve ever been pissed about my salary is when I knew someone was making twice as much as me and sucked at his job, which required me to do his job for him, until he got another promotion. That’s the only time, because in my mind, if I have to do both jobs anyway, fire the other guy and gimmie his salary, too. Otherwise, my statement stands: I’d rather make less at a good company than make more at a go nowhere place. I’d love to have lots of cash and work for a great company, but I’m also a realist, and those are my priorities: better company over higher pay.
So, thanks to Jon Carson and his MA-based company – I hope other companies decide to follow your example rather than dumping more of our jobs to software houses overseas.
It’s OK to use slave-wage labor to code. Just don’t let these people work for the same rate in a manufacturing facility. Interesting double-standard.
I agree that there is more to work than the salary, just as there is more to being in business than making profit. Most people have lost sight of this.
Almost every major company I’ve seen can list the same thing in the “what we do” section of their annual report, namely: “we are in business to produce increased shareholder value”.
It is wrong. It sucks.
Well, yes and no. A business’ sole purpose is to make money and if publically trade, to make money for shareholders. I think a lot of people lost sight of this in the late 90’s because we were all employed and enjoying all the “new” perks of engineering tasks. Once managers realized that we weren’t the only coders in the world, we lost our edge in the bartering game, and the game changed. Now we’re coming in at a weeker position and if a company can do better by outsourcing, they will.
The thing that most companies lose site of is that it can cost more to outsource something than it would be to keep a cheaper team on staff and on site. My last annual salary was way the hell over the average – or so I’m told – but I had stayed at a place for years to get it up there… right now, I just wanna work in what I’ve been trained and schooled to do, and that’s no easy thing, it would seem. :)
I think you misunderstand me.
Yes, the reason businesses exist is to make money. However, I take exception to where the line is drawn on how much money.
Profit comes at a cost. Sacrificing things like product quality for increased profit is stupid and short sighted. Outsourcing, while it might look cheaper on the balance sheet, has its own costs associated with it – one being that you no longer have an in-house pool of expertise to use in development of next generation products.
It is a house of cards that will eventually collapse. When it does, the only ones sitting pretty will be the ones who are lining their pockets now at the expense of the companies whose interests they have been given the responsibility to protect.
(I guess I’ll never have what it takes to be a manager in corporate America.)
Ah, I did misunderstand me to some degree, but I thin kwe’re on the same page… and I have seen some articles about “why isn’t the job market recovering, if companies are earning more profits” – there’s the answer right here.
A correction!
I understand the frustrations and anguish of the American worker who was shown the pink slip so that an Indian does the same job for much less. Being an Indian myself, I would have similar feelings if my job got transferred to another country!
But it’s incorrect to assume Indians won’t do the same job as good as, or even better than Americans. I work for GE systems and we don’t work in a call centre! It’s a sophisticated mechanical design work (using CAD/CAM) and our unit has consistently been awarded Sig Sigma quality certification (which is the highest mark of excellence in our product line).
Americans think nothing of US multinationals walking roughshod over other countries in the name of “free trade” and “globalization” but when the shoes is on the other foot, that’s when you can conveniently forget your own principles! I’m sorry you can’t have it both ways.
If you want US economy to continue to grow (which will come at the expense of markets like India, China) you’ll have to make concessions somewhere. As you Americans like to say, “there are no free lunches in this world”.