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Study: Outsourcing Boom Is Over

eweek.com — The leveling off is due in part to experienced customers becoming more savvy and more picky about the work they hand to outsourcing providers. The reticence on the part of some customers is due to disappointment with the performance of their outsourcing providers, the study found.

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  • jo42, on 10/12/2007, -32/+9Outsourcing: Another failed PHB brain f*rt by corporate America...

    IMO, YMMV, YADA, YADA, YADA
    • CharlesDarwin, on 10/12/2007, -41/+6"Study: Outsourcing Boom Is Over"

      Does that mean Bush got impeached?
    • pedmond, on 10/12/2007, -15/+8Does that babble mean ANYTHING? How about a meaningful opinion?
    • CharlesDarwin, on 10/12/2007, -2/+6We gave away all the jobs already. There's simply nothing left to outsource! ;)
    • ytrabbit, on 10/12/2007, -0/+1Did anyone here RTFA. It's about outsourcing inside the USA, not to foreign companies. Asian outsourcing is going strong.
  • CorpT, on 10/12/2007, -16/+28Too bad we didn't get some government intervention to protect us. That would have worked so much better than the free market.
    • pedmond, on 10/12/2007, -23/+6And why is that? Because communism is better than capitalism, I suppose?
    • CorpT, on 10/12/2007, -5/+19http://en.wikipedia.org/wiki/Sarcasm
    • elephantdog, on 10/12/2007, -8/+5I can sense the sarcasm, but unless these other countries have similar labor standards we shouldn't be trading with them at all. People are so cheap they'll buy themselves into slavery if left to the free market; look at credit cards.
    • nudedave, on 10/12/2007, -3/+6What government? What country?

      Outsourcing just proves that our governing bodies are corporations and not elected Representatives. And them waffling on using our sourcing is again proof, as they will go where ever they can maximize profit, no matter the consiquence.
    • texpundit, on 10/12/2007, -1/+5What the article fails to mention is the fact that out of all the jobs that were outsourced in the US, only roughly 2% of those were outsourced overseas. The vast majority were outsourced to companies down the street, on the other side of town or in another state.

      But ya gotta love media hype and idiot politicians for making something sound like the Apocalypse. *sheesh*
    • LiterateWolf, on 10/12/2007, -3/+2"And why is that? Because communism is better than capitalism, I suppose?"

      Better to use common sense and empirical data than Ayn Rand novels for economic policies.
    • jrod2008, on 10/12/2007, -0/+0Social Darwinism: dumbfucs(sic) in capitalism stay poor, capable people get rich.
    • jrod2008, on 10/12/2007, -0/+0All you people stating with authority, "5.15 would make you rich in India" it doesn't work like that. There is a concept called "real income" which is basically what you can get for your money. 5.15 in ruble is based on the international exchange rates, so $5.15 in rubles is $5.15 in American goods, but if one were to spend that same amount in India, one could probably buy much more. So it isn't a valid comparison. Geez, I'm only half through AP Macroeconomics.
  • edenlover, on 10/12/2007, -6/+37It took a study to figure that if you pay someone $200 instead of $4000 a month for the same job you will get less quality work done?
    • mapkinase, on 10/12/2007, -5/+7The study is not about whether outsourcing makes sense or not, it is just statistics of outsourcing.
    • hchaudh1, on 10/12/2007, -19/+8I don't agree with your logic. In America, even burger flippers make a decent living, but that does not make them cooks.
      I was watching Tony Bourdain's trip to India and he was eating meals for about 10-20 cents. If you take the cost of living into account, even $200 might not seem so little. That is considering, anyone does actually work for $200 in the software business.
    • balls187, on 10/12/2007, -5/+32No one flipping burgers for minimum wage makes a decent living.

      They may live better than people in poor countries, but it certainly isn't a decent living. Try living off of $5.15 an hour and see how well you can live.

      Most Fastfood jobs offer no benefits, and no real long term skill training.

      Of course you can say "well go back to school and get a better job." but that's much easier said than done.
    • fyre2012, on 10/12/2007, -16/+4@balls187
      You're forgetting about the rest of the world, like so many folks tend to do

      $5.15 is a rich man's salery in many places on Earth, and education is non-existant in many of these places.

    • joerao, on 10/12/2007, -2/+12...and Tony Bourdain probably got the ***** from eating a 10c meal. Regardless of how the quality of the cooking is, there are long term consequences of cutting costs....
    • balls187, on 10/12/2007, -5/+11I thought I address other countries by writing "They may live better than people in poor countries..."

      I understand that US citizens are better off than many people in the world, but that doesn't mean they make a decent living at $5.15 an hour.

      Trivializing the poor in the US by comparing them to the poor in India, by saying "Oh look they don't have it so bad." Is like trivilizing the victims of 9/11 by comparing them to those who died in holocaust saying "Oh they didn't have it bad."

      If you think they do make a decent living, I invite you to try living for 6 months on minimum wage.
    • ocsurfreport, on 10/12/2007, -4/+9@fyre2012

      ----You're forgetting about the rest of the world, like so many folks tend to do

      $5.15 is a rich man's salery in many places on Earth, and education is non-existant in many of these places.----


      WTF? So because 5.15 an hour is a rich man’s salary in many places on earth, that makes it ok here? I got an idea, why don’t these people working for $5.15 an hour take a private plane back and forth to those other places on earth, and reap the rewards of $5.15 an hour, the logic is that the private plane in those countries would be about $1.00 to fly here, because after all $5.15 an hour is a rich man salary.
      And WTF with this education of other countries have to do with here? We are like number 30 in the world in education check out 20/20 Stupid in America
      http://youtube.com/watch?v=pfRUMmTs0ZA
      I did not want to believe it, but after your post it must be true.
    • jasnmb, on 10/12/2007, -10/+3balls187 said "Of course you can say "well go back to school and get a better job." but that's much easier said than done."

      Come on now, between grants and student loans just about anyone should be able to go to college.
    • balls187, on 10/12/2007, -7/+16@jasnb "Come on now, between grants and student loans just about anyone should be able to go to college."

      1) I didn't know that college grants and student loans will help pay rent, and take care of your children.
      2) Have you tried working fulltime and going to school full time?
      3) How about taking care of a child while attending school.

      I'm not saying it's not possible, but it's not as easy as you think.

      Of course you can make an argument by saying "well you should have made better choices in your life..." Thats all well and good, but I believe that in this day and age, and in a country as rich as america especially, even if we make poor choices, they shouldn't dictate the rest of our lives by making it nearly impossible to move out of poverty.
    • jjmicmic, on 10/12/2007, -7/+2>>balls187
      Of course you can say "well go back to school and get a better job." but that's much easier said than done.

      Guess 187 balls isn't enough for you...
    • hchaudh1, on 10/12/2007, -1/+4OK, I concede. I gave a poor analogy. But I was pissed off at getting negative Diggs for what I think are perfectly logical comments.

      But my point is, outsourcing is a reality which we have to face. No amount of burying your head in the sand, flag waving or protectionism will make it go away. Corporations, yes even American corporations are not looking out for anyone except their own stock prices.

      You think the situation is bad now. Just wait a few more years when countries like India and China will be wealthier and consuming more resources like oil, metals etc. Then the fights will enter the big leagues. We just have to recognize this fact and prepare to meet this challenge.
    • hchaudh1, on 10/12/2007, -1/+4@balls
      This is exactly what I don't like This sense of entitlement is very bad. Personal responsibilty has to kick in somewhere.
    • jasnmb, on 10/12/2007, -1/+11@balls187

      I completed college while working full time. No I didn't have kids at the time, but yes it was still hard.

      I was just trying to make the point that being poor shouldn't really be an excuse for not going to college.
    • popfrogs, on 10/12/2007, -3/+3@hchaudh:

      Yeah, and that 20 cent meal comes with handfuls of rat turds at no extra charge! What a bargain, I'm moving there tomorrow!
    • evolseven, on 10/12/2007, -1/+61) I didn't know that college grants and student loans will help pay rent, and take care of your children.
      2) Have you tried working full-time and going to school full time?
      3) How about taking care of a child while attending school.

      1-They will to some limited expense, especially if you look at community colleges and the like.
      2-using on-line courses it is definitely possible, I am currently employed at a 40+ hour a week job and I go to school half time, but I enroll in all 4 semesters a year, spring,fall, summer I,II so in effect i get full time.
      3-I would say on-line courses are your best bet, and they are widely available from accredited schools.

      And yes your choices are your own fault, but by arguing that its impossible to do these things, when it is very possible you are diffusing your responsibility for the situation, which in my opinion is one of the biggest problems with this country, no one wants to be responsible for anything.
    • mrgreen4242, on 10/12/2007, -1/+2"Come on now, between grants and student loans just about anyone should be able to go to college."

      It's certainly possible, but by no means an easy task. As a returning part time student who works full time I can definately attest to that. I'm lucky and have a marjetable skillset even without a degree (database and general IT skills) so I make an OK living, but it's literally about a third of what I would be paid if I had a degree.

      I'm plugging away at it, but it's a long, slow road when you are on a part time path. Even the 4 or more commonly now 5 years it takes to get a degree going full time is a pretty long commitment, when you start looking at half time and less it becomes a decade long ordeal. I'm about half done, and won't finish for another 4+ years.

      No ones fault but my own, and I take the blame for not getting done sooner, but don't dismiss the level of difficulty in going back to school.
    • h0kiez, on 10/12/2007, -1/+4Maybe I'm naive, but I think that the vast majority of people seriously impoverished in the US have done a pretty good job of earning their position. I know of very few (if any) people that work hard, make good choices, legitimately try their best and have a hard time getting by. The sad truth is that a certain percentage of people will ALWAYS make bad choices no matter how much others or the government is there to prop them up. Feeding more and more money to these people (often to be spent on drugs, alcohol, cigs or other vices) is not the answer. Not everyone can be saved.
    • SystemHasFailed, on 10/12/2007, -2/+2@mrgreen
      "Come on now, between grants and student loans just about anyone should be able to go to college."

      "It's certainly possible, but by no means an easy task."

      It's not supposed to be easy. Nothing worth having in life is. If you think otherwise you have an entitlement attitude that needs to be calibrated.
    • tiraid, on 10/12/2007, -1/+3@balls187

      You are looking for freedom from responsibility. Doesn't exist. If there is anything the American tax payer does not have an obligation to subsidize, it is irresponsible behavior. That goes for the "big evil corporations" as well. This type of thinking infuriates me. You want charity? Fine, look for a charity. The government is not here to provide you with freedom from you own actions.
    • balls187, on 10/12/2007, -2/+6"It's not supposed to be easy. Nothing worth having in life is. If you think otherwise you have an entitlement attitude that needs to be calibrated."

      Hogwash. I knew PLENTY of people in college who got by because their parents were rich alumni and donated big-bucks to the school. They were then given posh jobs with thier parents law-firms upon graduation.

      "This is exactly what I don't like This sense of entitlement is very bad. Personal responsibilty has to kick in somewhere."

      You don't think people should have access to affordable healthcare? You don't think that people should be able to make a living on the income they recieve for working hard?

      People are so quick to shoult "personal responsibility" but thats not a solution to anything. Yes people make bad choices, and yes they should have been more responsibile. After that, then what? No, people shouldn't be given anything on a silver platter, but I don't think that making one bad decision in your life should totally bone you over for the rest of your life.

      And for the "I did it so can you, comments" Yeah I know. My old man came here with $100 bucks to his name, rose up and became a successful person living the american dream. I know it's possible, especially in america, but that doesn't mean the system is perfect.
    • balls187, on 10/12/2007, -1/+4@tirade

      "You are looking for freedom from responsibility. Doesn't exist. If there is anything the American tax payer does not have an obligation to subsidize, it is irresponsible behavior."

      No I'm not.

      I'm just saying that after you take responsibility for your actions, it shouldn't be pulling teeth to get back on the right track.

      I made all the right decisions in my life, didn't do drugs, didnt get a girl pregnant, went to a damn good school, got a damn good job, but that doesn't mean I don't have compassion for other people who aren't as fortunate as I am.
    • Zipko, on 10/12/2007, -2/+1@h0kiez - You're not looking at the whole picture when considering why people are impoverished. Even the ones that appear to have made poor decisions may not have really made those choices.

      Both heredity and environment play a role when it comes to education. People may who make seemingly bad choices such as turning to drugs or crime may live in an environment where they arn't even aware that better choices exist. Children growing up in inner city schools aren't taught much in the way of career development.

      The other factor that I saw a lot more in my town was people simply not being smart enough for college, even a CC. A friend of mine in high school is now working in a factory because a reading disability prevented him from passing the English courses he needed to move on to higher education. The school system never diagnosed the problem and allowed him to fail. For another example, try teaching a 40 year old basic Algebra. For some people it's just imposible to keep up with coursework, even if they make all the right decisions and keep working hard they can't get the education required to get out of minimum wage jobs.
    • babakshirazi, on 10/12/2007, -0/+2
      Join the military, get college money as well as attend college while your in. Any poor, able-bodied person in the US can do that. If they take advantage of it, they can do as good as anyone. (if they don't get shot while they're in)

    • Narrator, on 10/12/2007, -0/+2There's a secret to living on $5.15 an hour: You can't do it alone. People think that it's their right to live without roommates and/or not with their parents. In many parts of the world where there isn't as much of a generation gap and such a strong need for privacy people share living expenses and chores and can thus live much more cheaply.
    • EatenByAGrue, on 10/12/2007, -0/+3Another thing people seem to forget is that the U.S. is terribly expensive to live in. And to operate a business from. Let me explain:

      First, I can live very well on $US20,000/year in India, but would be below the poverty level in the States.

      Second, because I was born in, grew up in, and work in the States, my employer gets saddled with extra expenses (directly or indirectly). These include social security taxes (most employees only pay half of what the government gets... your employer pays the other half out of their pocket), environment protections (employers in the States don't have the right to pollute like some other countries allow, buildings must conform to certain fire and earthquake codes, etc., all of which gives foreigners an advantage in cheaper utilities, rent, etc.), more rigid accounting standards (Enron excluded, of course), partial contributions to health coverage (they can't get you to do work if you're out sick all the time, and U.S. healthcare is very pricey), to name just a handful. Sometimes, they even have to pay time-and-a-half for work over 40-hours. These all add up in employee-related expenses that don't happen in an offshore location.

      My point is that American workers have huge disadvantages when competing with offshored competitors. Are Americans more lazy or more incompetent? Sometimes, but not always. But, all other things being equal, it's impossible for an American to compete with someone in India, China, or many other countries that don't require all the taxes and regulation that the U.S. government requires. Either American companies should be restricted in their use of offshored employees, or American employees should be given a more fair playfield to compete in.
    • tiraid, on 10/12/2007, -3/+2@balls187

      "compassion", you call it. How is it compassion? It is a zero sum. It's redistribution of wealth. You think you can arbitrarily decide to take from someone to give to someone else, because you feel sorry for them. Who do you think you are? You must be smarter than the people you are taking from, because they couldn't possibly handle their own money responsibly... I just can't even begin to fathom the nerve of thinking you are needed to help other people spend their cash "the right way!"

      Why is it that the government should be deciding this? I feel sorry for people who think the government is their only choice. It's like deciding the family budget will be kept by the crack addict uncle. What? Social security is gone? But how can that be? The national debt is how high? Do people really have no other choice but the government?

      Really, what is the fear of privatized charity? (Not a rhetorical question)
    • SystemHasFailed, on 10/12/2007, -1/+1@balls187

      "I made all the right decisions in my life, didn't do drugs, didnt get a girl pregnant, went to a damn good school, got a damn good job, but that doesn't mean I don't have compassion for other people who aren't as fortunate as I am."

      Fortune?? There's NO such thing as fortune - other than making a fortune via hard work. You aren't "fortunate". You worked hard and were rewarded for that work with success. Do dope, don't go to college, and screw off in your youth and you end up reaping the rewards of that. If you want to call that "being less fortunate...", OK.. I call it what it is.. Being lazy and getting what you deserve from life - a big fat lot of nothing.

      THIS is what I'm referring to by and "entitlement attitude".. You weren't lucky or "entitled" to success.. you worked for it. Those who do not work for success are not entitled to success. And yes.. that includes benefits packages, retirement, etc.

      Some form of basic health care? That already exists. At least it certainly does in the state I live in via the Welfare offices - in fact I know familes you use it. The same heath care I get but for free? Screw that.. you want a benefits package, get a degree or go into the armed forces.

    • balls187, on 10/12/2007, -1/+1@tirade:

      ""compassion", you call it. How is it compassion?"

      My compassion is that I understand how difficult it is for someone who is poor to get out of welfare, and would like to see a solution to the problem.

      "It's redistribution of wealth. You think you can arbitrarily decide to take from someone to give to someone else, because you feel sorry for them. Who do you think you are?..."

      You're arguments are strawman.

      I claimed that the working poor can't make a living wage. I said also implied that I think people should be entitled to healthcare. Then I said that I believe that making "bad" decisions shouldn't prevent you from getting back on the right track.

      Not once did I talk about redistribution of wealth, or arbitrarily deciding whose money is taken.

      Please write Bill O'Reilly and ask him for a better rebuttal to my claim. I will resummarize it because you obviously didn't get it the first time.

      People making minimum wage are not making a decent living. I also believe that making a "bad" decision shouldn't make it orders of magnitude more difficult to make a decent living.

      For your faulty logic, I award you no points, and may god have mercy on your soul.
    • balls187, on 10/12/2007, -1/+2@systemhasfailed

      Absolutely I was fortunate. Here is why.

      First I was born an American. All of my relatives are poor. Had I not been born an American, and instead born where my parents were born, I would have likely stayed poor the rest of my life.

      I also had parents (while they were ***** parents) emphasized getting a college degree. Many many kids today don't believe that college is an option because their parents don't make it an option.

      It's easy to say "look I did it, why can't you" but until you've been in someone else's shoes you have no idea how difficult it can be.

      Yes there is some social welfare programs out there, and for lack of a better system they do provide some coverage, but I don't think it's to the level of care that every human being on the planet should be entitled to.

      My brother has 3 kids all from different mothers, and he makes his living doing odd jobs. He's on welfare, and I've seen how difficult it is for them. He made some bad choices in his life, and now his kids are paying for it. He probably can't afford to send them to college, and isn't really pushing the idea onto them. They will likely end up being in poverty. My neices and nephews are no where nearly as fortunate as I was.
    • tiraid, on 10/12/2007, -1/+0balls187

      "I claimed that the working poor can't make a living wage. I said also implied that I think people should be entitled to healthcare. Then I said that I believe that making "bad" decisions shouldn't prevent you from getting back on the right track."

      Now that is just stupid. People "entitled" to healthcare is not redistribution of wealth? Who pays for it? Doctors out of their own pockets? Should the government just print more money? Ah, what the hell, lets just raid the tax coffers! You do know who's money is in the tax coffers, right? You do know that we do not have a flat tax in this country... I assume you know... But, you are a socialist; I get that. You probably think that's fair. You probably think that everything just kind of belongs to the people anyway.

      You might be right. I may not have any idea what you are talking about. I just assumed you wanted to help people by throwing money at them. And even if that is what you wanted to do, maybe you were refering to your own money.
    • SystemHasFailed, on 10/12/2007, -0/+0@balls187

      So you were born an American? Gene Simmons wasn't.. and he's one of the wealthiest people in his industry now.

      My UNCLE was an immigrant from Greece during WW II.. He's one of the biggest land owners in the Central California area.

      How did they do this? Two words: HARD WORK.

      "It's easy to say "look I did it, why can't you" but until you've been in someone else's shoes you have no idea how difficult it can be."

      Sorry.. preaching to the wrong group. I didn't come from Money. I had relatives that had it, but it was *their* money.. Not mine. All I know is this. Want to succeed? Two words: HARD WORK.

      I'm done having this discussion.. I just can't believe you don't see what's has obvious as the nose on your face.
  • techbum, on 10/12/2007, -6/+10The outsourcing thing was driven by the budget weenies. Unfortunately, most IT and business operations folks failed to react effectively to the push for lower costs, at all costs. Cheaper is not usually better......
    • mrgreen4242, on 10/12/2007, -0/+2I read that a lot of these entry level jobs that are outsourced to India have massive complexes built where the company provides as part of your compensation (or at least at a vey good rate) your living quarters along with cafeteria privledges. The dormatories/apartments are either walking distance to the office buildings or trains/buses are provided by the company. In the same complex there is retail and other office space available for lease to business who want to provide services to the people who live/work there. Bars, barbers, video rental, even doctors and dentists. They get a captive audience, the company running the whole show gets a nice return on their investment.

      The worker gets paid a lower actual salary, but is provided a very nice package of other benefits. There are places in the US where land and labor are cheap enough to build complexes like these. Perhaps not as inexpensively as in India, but certainly a far lower cost than putting an operation in NYC or some other existing metropolis. I'm thinking areas like Iowa or the Dakotas or Montana where land is cheap, and the additional local cost of living is low, including taxes.

      Sure, you're not going to attract as many experienced, older professionals with families to that sort of facility, but you don't need to for things like call centers. A few thousand peons and a small percentage of managers and higher level technical people (who could be at a seperate facility anyways) would do the trick. State and local governments would probably be happy to provide significant tax breaks to defray the building costs, the number of jobs created by such a project would be huge. Not only are there the actual workers, but the support services like building maintainence in the dorms, bus drivers, cafeteria workers, the small business opened up the leased space all would make some serious tax revenue for the state.

      Anyways, that got kinda long, but the point is that rather than outsourcing and risking poor quality the backlash from customers companies need to think more efficiently and "insource" with newer, better busienss models.
    • popfrogs, on 10/12/2007, -0/+2@mrgreen:

      Good comment. China has much the same operating style for alot of factories. I used to work for a major manufacturer of commercial A/C units and they had a Chinese guy come over from Guangxou (sp) and check out the US operations. He just couldn't get over how big everything was here. Huge warehouse, huge building, huge people. I kept telling him he didn't need to wear a paper mask when he walked around outside.

      He explained that in China, much of the farming community is turning to the larger cities (like Guangxou) for employment opportunities. The company buses the guys in at the start of the week and they live in dormitories on-site complete with 3 meals a day. On Friday evening they're all taken home and the following Monday they're back at work. It seems like a good system even if you're not getting paid alot. It's like being in the military only you don't have to worry about an IED going off on the drive home.
  • buss, on 10/12/2007, -6/+16Oh no, the secret is out! I stayed in computer science/computer engineering because everyone else left! Don't come back now, or the high demand and pay will disappear before I graduate!
    • sycorob24, on 10/12/2007, -4/+11I remember hearing awhile back that the ideal time to start studying for a particular field is when the field is oversaturated and people are leaving it, like you did. These things seem to go in cycles, right around 4 - 5 years long... I almost missed it. IT was hot when I started school, and right after I graduated in 2000 it all blew up.

      As for outsourcing - it's still going to happen. It was a brand new field, and India, China, etc didn't quite have their game together. Yes, you CAN expect to get to get the same quality of work for $200 a month, because the dude you're paying $200 has his freaking Doctorate in CS and really really wants that job. The reason that it hasn't worked so far is that managing a project remotely is hard on it's own, and gets really hard when you throw in a different time zone and a different culture. But American companies will absolutely figure out how to deal with this, I promise you, and outsourving will continue.
  • Trixrox, on 10/12/2007, -12/+10America is all about cheap. Exploited the slaves, exploited the child labor, and now they outsource. If they can save a penny or two, America will do it. I'd pay a little more just so I know my fellow americans have a job.
    • nj10ii, on 10/12/2007, -4/+6If you would be willing to pay more, Obviously then you don't shop at Walmart then?
    • qwickone, on 10/12/2007, -1/+5Now don't take this as me condoning slavery or child labor, but all that is a result of the capitalist economy. Can you expect anything less when everything is for the bottom line? Outsourcing has a long way to go in terms of making the consumers happy, but it's promising. And while it's true it's making the US's slice of the pie a little smaller, the pie itself is getting bigger (by growing the economies of India, Singapore, etc.), which in the end, comes back around to us. A smaller slice of a bigger pie will still be more pie for everyone, and really, who can argue with pie?
    • popfrogs, on 10/12/2007, -1/+6While alot of your worldwide brethren will take an opportunity to mod you up for slamming America and American corporations for exploiting cheap labor, take a look at the REST of the planet. If your neighbor will mow your yard for $5 and a company wants $20, you'll go with the $5 every time. It's just simple economics and has nothing to do with any country or it's perceived policies.
    • drakethegreat, on 10/12/2007, -2/+2Well there are countries that still practice slavery and child labor, we don't. I think that should at least say that we have improved ourselves beyond other nations... Apparently the will of the people has the ability to overcome the bottom line, it just happens very rarely.
    • h0kiez, on 10/12/2007, -1/+6America is all about cheap...and I don't see anything wrong with it. If somone in China makes my shoes for $10 a week, that's fine with me as long as he isn't being forced to do it. Sweatshops and slave labor are one thing, but simple low wages are another. I have to assume that he's making my shoes because it's the best job he could find, thus I'm going him a favor by allowing him to make $10 a week.
  • DumbCommonHerd, on 10/12/2007, -5/+24I HATE it when I call customer service and I get someone on the other end, obviously from India or some other country with a poor understanding of english attempting to talk with me. This makes me think the company cares little about customer service and everything about it's own bottom line. therefore I will usually choose to do budsiness elsewhere from then on.
    • asurroca, on 10/12/2007, -2/+8Spot on! I refuse to talk to people speaking in broken English out of call centers in foreign countries. I presume a growing number of Americans think the same way... it's just not fair to the consumer. And once companies start realizing that the customer service complaints aren't worth the savings (believe me, it will take A LOT to outweigh the savings though) then that will be the end of outsourcing.
    • tackle, on 10/12/2007, -1/+4[Quote]I HATE it when I call customer service and I get someone on the other end, obviously from India or some other country with a poor understanding of english attempting to talk with me[/Quote]

      You realize that one of the reasons why services and goods are getting cheaper and more affordable is because the customer service is being outsourced to a cheaper place. If you move it to somewhere like US, the added cost will only be passed on to the customers. This doesnt mean that the companies care about the customers. You can say that companies care about customers when they try to cut down the price of their service/goods which makes it easier for middle class families to afford the service or product.

      Who knows??. Maybe, if the customer service is moved to US, you might not even be able to afford that service/product that you are whining about.

      Also, its not like people that you talk to from India have a "poor understanding of english". It is your accent that they'll find difficult to understand. Saying people from India have a "poor understanding of english" is like saying "I cant understand their accent so I have a poor understanding of english".
    • mancat, on 10/12/2007, -0/+2Services and products get cheaper, yes. Unfortunately, as a result, there are less domestic employment opportunities, and domestic employees are expected to be paid less in order to allow corporations to save costs and keep their profit margins comparable with their competitors who have chosen to outsource the equivalent positions in their workforce.

      In the end, services and products are relatively the same cost to the consumer, who is now making less money than they otherwise would have if all jobs were kept domestic, and there was an incentive to provide competitive salaries. To the consumer who has lost his job to outsourcing, the services and products are now either more expensive than before, or are now too expensive to even afford at all.
  • scards, on 10/12/2007, -4/+12At Penn State's College of IST Future Forum, I attended a forum on future trends in IT Consulting. This was one of the topics the heads and representatives of companies like IBM had said. They've found that moving jobs away from the US was actually HURTING their productivity. There's a growing trend around the industry to bring those jobs back into the states.

    Good news for IT professionals.
    • buk110, on 10/12/2007, -3/+8I hate to break it to you Scards but IST at Penn State was a joke and a waste of 4 years. My only advice to you is if you're a freshman or a sophmore to go into the Software Development and Design option like I did. Or you will be like the guys I graduated with in Integration. Working for 30 thousand dollars a year, living at home with their parents, and wondering why they just paid for 4 years of Penn State Education.

      Oh and those numbers they gave you, they fooled me too. Those graduates making 50k + are the ones working in the D.C metro area. I had a job offer from BAE for 52 - thousand and a signing bonus. But the cost of living in McLean V.A would have crippled me.

      My advice to you, keep readnig sites like digg and slashdot. Study a lot outside of the class room, get involved with everything you can, and don't go integration.

      PSU Kardi
      Class of '06
    • vanik, on 10/12/2007, -0/+2I don't know what kind of gold plated dinnerwear you usually eat off of, but the DC Metro area isn't that expensive. At least if you think McLean is any more expensive than the rest of the world.. you have some research to do.

      Penn State IST is far from a joke - take it from a graduate of the aforementioned option and doing much better than the people you described.
    • buk110, on 10/12/2007, -0/+1Well, I graduate from Penn State in '06 and decided to stay in State College because I could make 51K here, and well the price of living in State College is a hell of a lot cheaper than living in DC.

      I have no crime, my rent out at toftrees is reasonable, I can afford a nice car, and pay off my student loans. I'm just going off of statistics from people that were in my graduating class. People that were making far less. The price of living in DC was a lot higher, the price I would have paid for a 1 bedroom studio gets me a 2 bedroom with all utilities. The difference in car insurance and the travel time to work is amazing.

      I'm just going off of experiences...
  • NSMike, on 10/12/2007, -5/+21Umm... Duh?

    Third World Country + Poorly Trained Techs + Barely capable English Speakers + Lost American Jobs = Pissed off American customers.

    • SpannerX, on 10/12/2007, -5/+8Plus even less people to buy new products since they lost their jobs or are under employed.
    • hchaudh1, on 10/12/2007, -6/+4"Third World Country + Poorly Trained Techs + Barely capable English Speakers + Lost American Jobs = Pissed off American customers."

      I assume you just got back from hoisting the red, white and blue in your yard, or taking a break from Lou Dobbs.

      FYI, projects are outsourced to Ireland, France, Singapore, India etc. Not exactly third world countries.
      Poorly trained techs: I recently saw a documentary on IIT (Indian Institute of Technology), you might want to Google for it. Especially interesting is just the tough process just to get into a good school.

      Barely capable english speakers. I am not knocking anything here, but I would imagine heavy TX drawls and CT, NJ nasaly twangs just to be as incomprehensible. My point is, people speak differently, get used to it.
      Lost jobs. Any chance these jobs were lost due to the bust of the late 90's.

      Also, last time I checked the sales of Walmart, people did not seem especially pissed off about the prices. Face it, if you don't see it, its not bad mentality is really bad for America. Labor disparity and disconnected workforces are a reality.

      Companies should be learning to use each regions advantages to secure their bottomlines instead of blindly outsourcing everything.

      BTW, kudos to the poster for not RTFA and completely turning the articles context on its head.
    • balls187, on 10/12/2007, -2/+15Right because when you have a competent person from a rich country like america, who speaks english very well, and he comes over and falls asleep on your couch, it's much better.

      Ever been to Bestbuy?

      Give Cingular a call, and talk to some genius in america and see how awesome of a job they do.

      Try calling a customer support line for Newegg or any of the countless other online computer retailers. 9/10 times you get General Tso's on the phone.

      Face it, customer service sucks period. In America, in India, in China. And the only people you can blame are the consumers for being stupid enough to continually spending money on companies that give crappy customer service.

      Thus far only one company has consistently offered top notch customer service and that's been Crutchfield.
    • mandarin, on 10/12/2007, -4/+3Whats a General Tso?
    • NSMike, on 10/12/2007, -2/+5@hchaudh1 -

      "I assume you just got back from hoisting the red, white and blue in your yard, or taking a break from Lou Dobbs."

      Where on EARTH did you pull THAT out of my comment?

      India, believe it or not, is still a largely third world country.

      Speakers of other dialects of English are still, in fact, native English speakers, and are largely MORE understandable than an Indian using it as his second language.

      I'm not sure what your comment about Wal-Mart is supposed to communicate, but I don't shop there. Not because they hurt small business. Not because they're approaching monopolistic behaviors, but because I got sick of every crazy cook from the backwoods that weighs 300 lbs shopping in a flannel shirt wearing pajama bottoms.

      IIT - If it's so hard to get it, chances are the large majority of people working for outsourced companies AREN'T getting in.
    • h0kiez, on 10/12/2007, -0/+3MMMMM......General Tso's....getting very hungry I am.
  • AncientWeird, on 10/12/2007, -9/+4Someone in my family once talked to a Colombian tech support person located in Australia!
  • DaveMN, on 10/12/2007, -5/+7If you RTFA, it is the onshore outsourcing that is in decline, in favor of offshoring, so the digg headline is misleading, and the news is not good:

    From TFA:
    Only 28 percent of buyers terminated at least one offshore deal, but 42 percent of onshore customers had done so. Of those, 53 percent cited poor performance by their onshore provider. In addition, customers also questioned whether they're receiving value from onshore providers, Weakland said. There's negativity building in onshore versus offshore. We see more people terminating onshore deals in order to put things offshore," said Weakland.
    • DaveMN, on 10/12/2007, -3/+6Didn't mean to rag on the submitter- looks like the misleading headline is on the original article.
  • drame, on 10/12/2007, -1/+6Even if outsourcing was still profitable it is only a temporary solution. Eventually outsourced countries will meet the standards in quality of life and expenses we here in the western world have. Although that could be time enough for companies to squeeze the profits they need to develop more profitable ventures / solutions.
    • scards, on 10/12/2007, -3/+7Ahhhhh... I think you're putting too much trust in the governments and corporations in those 'underdeveloped' countries to put the money they're making back into the quality of life there. You think Dell's putting the money they "save" back into the cities in India where their call centers are located to help develop schools and put a Starbucks on every corner? I remain very critical of corporate America.
    • hchaudh1, on 10/12/2007, -2/+2@scards
      I think he meant with improving standards of living in these countries, you get a newer, richer consumer base. Both sides win.
    • popfrogs, on 10/12/2007, -1/+3If your view of the future is that rosy, you should become a politician. The reality as I see it is that not only will first world countries continue to exploit third world labor, but that the first world nations will even take steps to ensure that the cheap labor pool stays available by interfering with foreign governments in various ways.

      India will never grow past the third world; they have neither the resources nor the expertise from the top down to develop their country into something respectable. The rampant overpopulation puts a huge strain on localized resources and high tarriffs on imported goods puts a strain on who can afford imported goods and foods. Add to that the constant brain-drain of educated Indians fleeing the toxic waste zone that is India and enjoying the good life in Western countries and you start to see how bleak the future is for India. The best thing that ever happened to them was the British occupation as it gave them a path to English and the rest of English-speaking europe (before you flame remember that most euro countries teach english as a second language from gradeschool on).

      The situation is much the same with Mexico. Cheap mexican labor allowed to run full speed through border crossings grows the US economy, but the growth isn't sustainable. First generation mexicans will do the ***** work like digging ditches and washing dishes, but second generation mexicans won't settle for that. Being official US citizens, born on US soil, they will want a better life. So, the labor pool has to constantly be refreshed, meanwhile, the US has taken on an estimated 20 million illegals and their new citizen offspring over the last decade. Ultimately the US pays the price for this labor through civil services like free hospital care and other welfare programs that, in some regions, are buckling under the stress of short budgets and just too many mexicans. Some cities and counties have resorted to requiring social security cards that are verified just to get in the door at clinics and hospitals as well as a handful of other official documentation. The worst part is that the money that illegals make isn't even put back into the economy, half of it is sent back home to various south american countries and Mexico. Mexico last year had an unbelievable influx of 12.5 BILLION dollars from illegal workers. Yet still, Mexico remains a third world, dirt poor, uneducated country with a corrupt government to boot. As I've said in the past, throwing money at enormous, deep-rooted problems doesn't make them disappear, in fact it can even broaden them.

      So to sum up, if you're still awake, the third world will remain the third world. Name one independent country that has been promoted from third world to even second or first world in the last 50 years.
    • scards, on 10/12/2007, -1/+2@hchaudh1
      No, I dont think he was talking about that at all.

      "Eventually outsourced countries will meet the standards in quality of life and expenses we here in the western world have"

      That sounds to me like he's expecting the globalization of the world economy to bring those countries up to a level where you can no longer pay people $300 a month and they'll be happy with it. I'm saying that's a pipe dream that really - really - really counts on governments and corporations to be benevolent and look out for its people and employees.

    • popfrogs, on 10/12/2007, -1/+1@scards: It seems our reality-based opinions aren't very popular on Digg today.
    • drame, on 10/12/2007, -1/+1"As I've said in the past, throwing money at enormous, deep-rooted problems doesn't make them disappear, in fact it can even broaden them."

      I agree completely. I don't think throwing underdeveloped countries money ever does help them. I believe private businesses whom have a vested interest in the quality of education/health/life in these countries are far more beneficial (not a solution but far more positive than just money thrown from government to government). My last comment regarding companies using outsourcing can take advantage of it while they can to help themselves.

      I don't think referring to a country as third or first world is an accurate means of measuring the quality of life. The quality of life in these countries is always in my eyes measured in comparison to that of other countries. Although the quality of life in current and past third world countries is still considered to be third world in comparison to America, there are countries like India who's citizens do now experience a greater quality of life in comparison to 50 years ago.
  • Otto, on 10/12/2007, -2/+3Well, that's just great. That just means that all the companies which are perpetually behind the times will now actually start outsourcing. *****.

    Thanks a lot, DiamondCluster, you bastards!
    • chroniccritic, on 10/12/2007, -0/+0popfrogs,
      "The best thing that ever happened to them was the British occupation as it gave them a path to English and the rest of English-speaking europe (before you flame remember that most euro countries teach english as a second language from gradeschool on)."

      really? not according to The Economist which says India's share of world trade fell from 24% to 2% during this period (of english colonization).... and oh! minor detail - similar fall in their GDP..... kinda heavy price to pay for learning a language, you might say!!!




  • geronimo, on 10/12/2007, -1/+7I don't like outsourcing. If you bring people on board you should look at them not as liabilities but as assets who can generate new ideas and help grow the company while you give them ownership. Some bean counters think they can just get some sucker to work for them, not give them ownership, while the guys at the top roll in the dough. They are tired of those smelly programmers in the US getting such high salaries.

    That will work in the short run, but when these people you treat like slaves learn your business then compete against you or they just do a crappy job over time after getting burnt out, the good times will be over. The bean counters underestimate the ability of coders. Coders know your core business inside and out. You are at the end of the day at their mercy, if you don't believe it, then you will eventually be forced to believe this.
  • scsnoballs, on 10/12/2007, -3/+2The boom is over, doesn't mean outsourcing is going to stop.

    Just like a housing boom, house sales slow, but prices stay high.
  • desibabu, on 10/12/2007, -4/+2No digg!

    because

    Day after blasts, markets zoom on IT high (http://timesofindia.indiatimes.com/articleshow/1742505.cms)

    "The software stocks, however, were the stunners with better than expected results from Infosys --a 15 per cent QoQ and 18 per cent QoQ growth in its topline and bottomline respectively. The company also revised upwards its revenue and profit guidance for the fiscal.

    Infosys announced that its revenues were expected to grow by 41 per cent YoY during FY07, EPS was expected to be around Rs 125, growth of just under 43 per cent YoY. For 1QFY07, however, despite the strong sequential growth in topline, Infosys' operating margins declined from 31.7 per cent to 29.5 per cent."
  • OswaldKenobi, on 10/12/2007, -3/+3It's disturbing to me that more onshore outsourcing jobs are being lost in favor of offshore:

    The study found that 47 percent of buyers reported they had prematurely terminated at least one outsourcing relationship in the prior 12 months.
    Only 28 percent of buyers terminated at least one offshore deal, but 42 percent of onshore customers had done so. Of those, 53 percent cited poor performance by their onshore provider.
    "There's negativity building in onshore versus offshore. We see more people terminating onshore deals in order to put things offshore," said Weakland.

  • dupswapdrop, on 10/12/2007, -3/+12The comment I hear from one of my website hosts that I called for help.
    me " why is my website down?"
    them "no speake English call back later"
    click.
    Guess who's not hosting my website anymore?
  • Arch, on 10/12/2007, -7/+6Wait, Microsoft stopped using illegal immigrants to write Windows Vista?
  • slimborama, on 10/12/2007, -4/+5freaking finally... I've *only* had horrible experiences with outsourcing... we always had to rewrite their crap.
    • hchaudh1, on 10/12/2007, -3/+4RTFA
    • tackle, on 10/12/2007, -0/+2well, maybe you had to rewrite their code because you were not smart enough to understand their logic??
  • techbum, on 10/12/2007, -2/+5So, I guess that moving to India to get a job with a US company isn't going to be a viable career path anymore?
  • zbeast, on 10/12/2007, -2/+5Just recently a company that I consulting with had a project destroyed by an Indan software company.
    In order to cover there bad coding they were making system patches that would uninstall.
    Critical windows updates so the software they had written would run.
    There are still others who have had there proprietary software source taken and release as
    products in other country's. I'm laffing big now.
    It's nice to see Apples stopped outsourcing there work. If you move the jobs from over here.
    where are people going to get the money to buy your products here.
  • MasterGrief, on 10/12/2007, -2/+7I recently re-installed windows, and when it told me I had installed it too many times with the same registration ID (all on the same computer, but because of numerous hardware and software failures I kept re-installing) it told me to call tech support. I was re-installing at about two in the morning, Central time, and I called tech support. After going through the automation, I was sent to a fairly pleasant Indian man, presumably in India. He helped me fix everything, was mostly understandable, and seemed to have no trouble understanding what I was saying. Point is, not all outsourced work is bad, just a lot of it is.
    • brufleth, on 10/12/2007, -1/+2Product support is on the line between skilled and unskilled labor. I would probably put it more towards skilled but sometimes that is giving too much credit to organizations that just give out a list of ten problems and how to fix them. If you can retain workers long enough at a support center for them to actaully gain worthwhile experience fixing problems then it won't matter where they are since their product (phone support) is done remotely anyway.
  • snipes, on 10/12/2007, -2/+2That doesn't do much.

    I'm still gonna have to say 'What did you say?' a million times when I call customer service.
  • mecole21, on 10/12/2007, -4/+5Why outsource when u can have illegal immigrants doing it for free...
    • elephantdog, on 10/12/2007, -1/+2You outsource to keep those poor people out of site. Nobody wants a mexican coding during the day and sleeping in the alley at night! Let 'em sleep in India's alleys.

      Btw, the going rate on Chinese programmers is roughly $500/month.
  • brufleth, on 10/12/2007, -1/+2Few things:

    Setting up a labor relationship with a foreign outsourcing firm requires a lot of physical and legal infrastructure. Security, proprietary information agreements, etc all have to be set up. It becomes just about impossible if the work is for the government.

    The outsourcing boom in question is related to skilled labor. Unskilled labor will continue to be outsourced because developed countries want their DVD players, sneakers, and T-shirts for the lowest price available.

    A huge weakness with outsourcing is you do not build a work force with it. Your company makes digital widgets and you then decide to outsource the work programming new widgets. You get a new design and it sells big. Now you want to design another digital widget. You again have to go and outsource. If you are lucky the company you previously outsourced to still exists (even though you stopped paying them for 18 months after the last redesign) and has retained the same people who worked on your previous widget (even though they could leave and get better jobs given their experience which you paid them to get). If instead you suck it up and pay for domestic full time "real" employees you can do a better job retaining them and as they become more proficient at designing digital widgets your company becomes more effective and makes more money. Again this probably wouldn't apply to building the widgets but only for their design.
  • GuyHitByTruck, on 10/12/2007, -0/+3OOH!! OOH!! I know this one!
    "What is '*****'"?
  • omuppi1, on 10/12/2007, -0/+3Outsourcing is different from Offshoring. Please understand the difference. The article very clearly states that more and more companies are preferring offshoring over onshore outsourcing.

    From TFA:

    "Premature contract terminations, particularly with onshore providers, continue to be a prevalent trend, he noted. The study found that 47 percent of buyers reported they had prematurely terminated at least one outsourcing relationship in the prior 12 months.

    Only 28 percent of buyers terminated at least one offshore deal, but 42 percent of onshore customers had done so. Of those, 53 percent cited poor performance by their onshore provider.

    In addition, customers also questioned whether they're receiving value from onshore providers, Weakland said.
    "There's negativity building in onshore versus offshore. We see more people terminating onshore deals in order to put things offshore," said Weakland. "

    • asurroca, on 10/12/2007, -0/+3In other words, companies who outsource are getting better results when they outsource to a foreign country than when they outsource to a company based in the US. To me, the fact that 28% of companies in the study ended their offshore contract tells me that the quality of offshore outsourcing isn't exactly great, just not as bad as the quality of onshore outsourcing.

      I mean, to have to end 1 out of every 4 contracts sounds like pretty dismal performance to me. I wonder what the early contract termination rate was in earlier years. In other words, I get the idea that it is on the rise, and that's why the article claims that the outsourcing boom is over.

  • Audobahn, on 10/12/2007, -3/+2doesnt matter if your job is outsourced...
  • gmerin, on 10/12/2007, -1/+2One industry rag claims outsourcing is over, and the world changes?
    If they had published an article claiming that the state of outsourcing had not changed, would anyone notice? This is another instance of a rag publishing an article in order to raise awareness of the rag. When IBM, Sun, and the majority of the big financial institutions close their Mumbai and Bangalore sites, restoring the 60,000+ jobs they shifted overseas back to the US, then maybe this article might be accurate. Right now, it's no different than a Dvorak article: just hot air (like Dvorak).
  • balls187, on 10/12/2007, -7/+2asdf
  • eadnams, on 10/12/2007, -1/+2Dell has gotten rid of two of its largest outsourced sites, and is getting rid of more of them in the future, yay!
  • v3xt0r, on 10/12/2007, -1/+3globalization is a capitalistic-communist agenda
  • Ribald_Jester, on 10/12/2007, -0/+4outsourcing is overblown. Is some instances it can be helpful - but too often companies go into thinking "big savings" without looking at the big picture. Personally, I think we should outsource all worthless middle managers. That would be fine with me :)
  • Grig, on 10/12/2007, -1/+1From where I sit, the new trend appears to be scrubbing the oursourcing and replacing it with insourced staff in the same (or similar) foreign lands. Big deal.
    • BigPapi, on 10/12/2007, -0/+2seriously, how many VP's does a company need? The last one I worked at had over a hundred.
  • ypee200, on 10/12/2007, -0/+1It just goes to show that the Indian IT Offshoring Industry needs to do a far better selling / marketing job of its value proposition. I found an interesting post on http://sketharaman.com/blog/?p=4. Why does everybody just talk of cost reduction? There's far more than that while offshoring to India e.g. reduction in time-to-market.
    • culbeda, on 10/12/2007, -0/+1My company, (and I have mixed feelings on the matter), a part of our business to a NOC in India primarily for the Time to Market reason and for around-the-clock support. Hopefully it will be a good learning experience and we can use them as a cheap way to get up to speed and build the necessary infrastructure domestically.

      I REALLY hate to see jobs go out of the country but it is INCREDIBLY difficult to argue with providing a full fledged service for less than the necessary tools cost in this country before you even start paying salaries.

      The only good thing is the for every 2 jobs that go over there, it takes one person here to manage them to ensure a quality product / service.
  • balls187, on 10/12/2007, -3/+1Digg Comments - 1
    Balls - 0
  • xwildoutxx, on 10/12/2007, -1/+0outsource the job of the outsourcing companies...we'll have 11yr olds in rice patty fields answer phone calls on skype phones. leave this ***** up to the politicians and enterprise owners.
  • Permanent4, on 10/12/2007, -0/+1No more outsourcing Boom? Does that mean Amanda's coming back?

    *rimshot*
  • dupswapdrop, on 10/12/2007, -0/+2outsource the politicians, then the lawyers.
  • LiterateWolf, on 10/12/2007, -2/+1To save money, companies should outsource jobs held by libertarians. They love outsourcing, offshoring, and layoffs. Get rid of them on th premise that they could buy cheap crap to be happy in life even though they'll work for less money. Everyone wins and Ayn Rand will bless us all.
  • joelsp, on 10/12/2007, -1/+1I love how the "study" says outsourcing is levelling off because customers are not satisfied with the service they receive from outsource centers. Well Duhhhhhhh!!!!
  • Anator, on 11/23/2007, -0/+1comment
  • itassist, on 05/26/2008, -0/+1Most of my friends are working in outsourcing companies. Here's one of them:
    http://www.itassist.ro/
  • satilamofa, on 06/16/2008, -0/+0in the other practices, outsourcing>/a> could give advantages if managing in professional way. The professional way in managing outsourced employee is expensive but company could be more focus on their core business, and more focus on to development employee competencies

  • kimsonsolutions, on 07/11/2008, -0/+1Find out why you should outsource your IT support with this article :
    http://digg.com/business_finance/Why_outsource_you ...
  • kamlavati, on 09/23/2008, -0/+1outsourcing is a good source of providing employment at a much lower cost.
    payroll outsourcing -http://www.acepayxpress.com
  •  

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