Why outsourcing to India for savings often fails. Not nasty to them!

[MJI]

I wish companies would stop doing this as it is a long term failure.

 

Firstly when you offer redundancies your most skilled workers will accept and walk into another job leaving you with your second and third string workers, the long experience sys ops are sitting comfortably in a new job.

 

Secondly, who works in these discount Indian places?

 

The people just out of university and people who have not been able to move on. Most decent Indian staff will soon move on to better places and earn more money, sometimes working for Western companies where financials were not the overriding decision, but time zones, or simply due to competent staff. This means that often the outsourcing operations are using poorly trained or inexperienced staff.

 

Then they may end up owning companies and getting business by being good and no more expensive, or just a little cheaper, like our outsourced programmer, we use a pretty good Indian programmer who did work experience with us a few years ago, he is doing very well over there, pretty competent and works hard. He is inexpensive but not cheap. I like him and find he does good work.

 

Finally where do you find the best Indian staff?

 

Working near you, they are all in the west, in America and Europe, working for western wages. Don't knock the Indian worker but knock the idea of cost saving by outsourcing.

[Xerces Fobe2]

I wish companies would stop doing this as it is a long term failure.

 

Firstly when you offer redundancies your most skilled workers will accept and walk into another job leaving you with your second and third string workers, the long experience sys ops are sitting comfortably in a new job.

 

Secondly, who works in these discount Indian places?

 

The people just out of university and people who have not been able to move on. Most decent Indian staff will soon move on to better places and earn more money, sometimes working for Western companies where financials were not the overriding decision, but time zones, or simply due to competent staff. This means that often the outsourcing operations are using poorly trained or inexperienced staff.

 

Then they may end up owning companies and getting business by being good and no more expensive, or just a little cheaper, like our outsourced programmer, we use a pretty good Indian programmer who did work experience with us a few years ago, he is doing very well over there, pretty competent and works hard. He is inexpensive but not cheap. I like him and find he does good work.

 

Finally where do you find the best Indian staff?

 

Working near you, they are all in the west, in America and Europe, working for western wages. Don't knock the Indian worker but knock the idea of cost saving by outsourcing.

 

And then they get replaced by cheaper lower skilled staff from Eastern Europe who work for an offshore company which pays no tax

 

XF

[Robert]

One of my previous jobs was outsourced.  Not to India, but another company just down the road - they came in, made an offer, and undercut us by a small amount.

 

The bean counters decided that it was a good idea, and we were all made redundant.  That was when the new company put the prices up, and refused to do any further customising for our customers.  The long and short of it was that our years of experience counted for nothing, and all that mattered was the bottom line.

 

Interestingly enough, six months after we all left, we were invited back for a "reunion" and as good as offered our jobs back.  Trouble was, most of the good Engineers had been snapped up and had established themselves in new jobs - as had I. 

 

It was a extremely worrying time for my family and I - which I hope I never have to go through again.

[chris p bacon]

Our son works for one of the Financial institutions and was involved in going to India (Pune) to train the new staff, he really enjoyed his time there but said that senior management had made a major mistake in offshoring, All the employees were graduates who were being paid less than here but because of differences in culture when 10 were made redundant here 15-16 had to be employed there.

The workforce is very transient and one Financial institution from the UK found that if you don't keep to your promises on pay and conditions then the entire workforce upped and left and went to another employer over a weekend.

Another of the cultural differences that should be noted ,is that every day the employees are searched upon entering and leaving the buildings with phones and paper confiscated, sadly information can be sold to the highest bidder !

A few years on and our son is still in the same work although it was brought out/transferred rather than offshored so he know works or another, they have been bringing work back to the UK as it didn't work and there were no savings.

He still keeps in touch with some in India through farcebook I understand.

[DDolfelin]

I'm keeping out of this - other than to mention that I have great difficulty understanding speech when coupled with a strong (to me) accent.

Be it from Mumbai or Glasgow - it presents me with problems.

[Pete 75C]

I'm keeping out of this - other than to mention that I have great difficulty understanding speech when coupled with a strong (to me) accent.

Be it from Mumbai or Glasgow - it presents me with problems.

 

Ah, me too... The call centre issue is for me, personally, the worst side-effect of outsourcing. If companies want to outsource, then in reality there's not a lot you or I can do about it, apart from hope they realise the error of their ways and bring it back home... I read the following examples of responses to call centre cold-calling a while back. Funny, but I still find it easier just to hang up...

 

1. Be even friendlier than the cold-caller. This counter-intuitive ploy wrongfoots the caller and enables you to occupy the moral high ground. Greet them effusively, say how nice it is to get their call, ask where they are calling from, what sort of day they have had, etc. Then, when you have softened them up, change tack. “Listen, mate, I hope you are not trying to sell me something, are you? Don’t you hate those creeps who try to flog you something over the telephone?!” It is extraordinary how quickly they beat a retreat.

 

2. Ask cold-callers for their home number. I have tried this several times and the results have been gratifying. Having met chumminess with chumminess, and given the impression that there is nothing I want more than cut-price kitchen cabinets from Croatia, I ask the caller if they can give me their home number so that we can continue our discussion on a future occasion. Invariably, they refuse – which gives me the perfect cue to harangue them for ringing my home number.

 

3. Engage them in polite academic discussion. I find this an effective way of dealing with those smarmy types who begin their sales pitch with the dreaded words: “This is just a courtesy call.” Rather than just ranting at this travesty of the English language, I ask them what exactly they understand by the word “courtesy” – and whether they regard getting someone out of the bath to discuss mobile phone charges as exemplifying the quality.

 

4. Refer them to non-existent legislation that they may be breaking. Crude, but effective. Nothing disconcerts a cold-caller more than an authoritative voice warning them that they are in breach of section 117 of the Telecommunications (Miscellaneous Provisions) Act 2007.

 

5. Ask their age. When they respond with puzzlement, I tell them that age explains why I object to cold-calling so much. I then tell them, quite truthfully, that I have watched my 91-year-old mother get out of her armchair and hobble across the room to field an inane phone call from a complete stranger, and I have raged at that stranger as I am now raging at them. They usually get the message.

[Gruffalo]

Indirectly related, I had a call from a holiday company yesterday expounding the virtues of a holiday cruise. I asked the caller how much time he had spent at sea and was told "2 day" to which I responded that I had spent 15 years at sea. Still persisting, he said that "things had changed since then" to which my response was to ask on what grounds he was making the comparison? Clearly someone who knew very little and was reading from a script!

 

Life in a call centre must be grim, be that in Mumbai or Moss-side! Perhaps it is an age thing but I immediately get tense when a caller is difficult to understand as I recognise that they are doing a job that could be done in the UK at less cost to our society.

[uax6]

The ones that get my goat are those doing 'consumer surveys' they always call at about 11am (Nice when you are on nights!) and whenever I have asked them to emove my number they never do. They call roughly every 2 weeks....

 

Call centres <are> grim, I'm fortunate in that I have only worked in them to provide telephones, and not having been chained to the desks. I think I would go mad!

 

Andy G

[MJI]

What brought this up is that my energy supplier is offshoring some jobs and I am expecting another disaster.

[chris p bacon]

What brought this up is that my energy supplier is offshoring some jobs and I am expecting another disaster.

That is usually more to do with the management at this end rather than offshore.

 

If the money is put into training staff (wherever they are) then things work, sadly senior management see offshoring as a way of cutting all costs including training.

 

Vote with your feet and wallet.

[edcayton]

I've said this before, but it is SOOO much easier to leave the answering machine on. Everyone who knows me either leaves a message or calls the mobile; genuine callers will leave a message which means that I can call them at a time that suits me-meaning I can prepare paperwork etc.

 

Ed

[Claude_Dreyfus]

As with all things; it is done in the name of 'value for money'. A company I used to work for outsourced its entire IT development to India; the CIO telling us that 'they had forgotten more about IT development than we will ever know'. It transpired they had forgotten a lot!

 

From a work ethic point of view, you cannot fault these teams, and yes, it is much cheaper to employ a developer in Bangalore than London; however companies think they are being very clever in pricing according to the various overheads - such as wages - but almost always forgetting that in places such as India inflation has been hurtling along in double-digits over the last few years, particularly wage inflation. They also forget that to manage a team of developers in the UK you need a manager. To manage an outsourcd team of developers, you need a manager; and a relationship manager; and a vendor manager; a handover manager; etc. etc.

 

As the costs go up, so will the price passed onto the customer.

 

Also, you are limited to where you can go if India become too expensive. The Phillippines is one option, and Malaysia is another - both have a decent standard of education and more importantly (for International Companies) a large percentage of English speakers. China has long worried companies as there seems to be no such thing as intellectual ownership rights or copyright. 

 

Eastern Europe is becoming increasingly popular, but as these countries start moving onto the Euro, so perceived savings will also start to reduce.

 

Another reason for outsourcing is more logistical - i.e. a global company creating operational hubs. These often - but not always - have a different objective, and have a reasonably good track record of success - a number of insurance companies I know operate big operations hubs in Malaysia and have had some very encouraging results,

 

I think the bottom line here is that not all outsourcing is bad. Outsourcing where the sole purposes is cost reduction is fraught with danger.

[C&WR]

I have had foreign call-centre workers hang up on me, tell my I'm lying about paying a bill when I have the receipt in my hand and the bank transaction showing on my screen and best of all an Indian trying to sell me loft insulation (in a house not my own) who started screaming at me that it was my duty to listen to him as the message was coming from the UK Government.  I also object violently to people who won't speak to me "for identification reasons" until I give my first name and then insist on using it at every possible opportunity.

 

Current pet hate is, though, and this is not restricted to callers from abroad, the habit of misapplying various bits of legislation during phone calls.  Classic one is relating to a recent bit of work I've had to have done on a minibus belonging to work.  Invariably  I would receive a telephone call asking to speak to me by name.   When I confirmed it was me they would then say, "for data protection reasons can you confirm the registration number of the vehicle and date of the incident?"  

 

Now not trying to be funny here, but I have no idea who the caller is and yet they have rung me on my direct line and expect me to pass data protection?  Also I am not quite so sure what is so protected about a vehicle bodyshop arranging return of our bus, it's not exactly transferring money about or discussing personal staff details as often I have to do.  However if I don't play the game I won't get the service.

 

I do, however, ask sweetly, "and which precise section of the Data Protection Act is this?  As the Data Controller for my organisation I'm not sure what could be applicable... Oh, you don't know...  Could it be that it is your organisation's policy which means I have to answer your questions, not the law..."

 

And breathe!

[leopardml2341]

As with all things; it is done in the name of 'value for money'. A company I used to work for outsourced its entire IT development to India; the CIO telling us that 'they had forgotten more about IT development than we will ever know'. It transpired they had forgotten a lot!

 

From a work ethic point of view, you cannot fault these teams, and yes, it is much cheaper to employ a developer in Bangalore than London; however companies think they are being very clever in pricing according to the various overheads - such as wages - but almost always forgetting that in places such as India inflation has been hurtling along in double-digits over the last few years, particularly wage inflation. They also forget that to manage a team of developers in the UK you need a manager. To manage an outsourcd team of developers, you need a manager; and a relationship manager; and a vendor manager; a handover manager; etc. etc.

 

 

Quote truncated.

 

But it's this bit:-

 

To manage an outsourcd team of developers, you need a manager; and a relationship manager; and a vendor manager; a handover manager; etc. etc.

 

that's key.

 

Recently I've suffered unacceptable delays to engineering deliverables because of the re-work that's been needed, trouble is the 'bean counters' don't factor this into the initial budget. Perhaps if they did they would realise that 'cheap ain't best' and that cost and time overruns are more damaging to repeated business with their end customer than a quick quid in the pocket for the supplier.

[Claude_Dreyfus]

Callers that contact me unsolicited and request I provide name, address etc. for data protection purposes get hung up on.

 

OT: DPP is now used and abused so widely, you never really know what is true or not. It is the same with the Sarbanes Oxley act. I once had a previous company's 'help'desk insist on manager's approval to recover a lost password. When I asked why, Sarbanes was glibly trotted out as if that would act as a scare tactic to make me scurry off to my boss for approval. Funnily enough, the relevent part of the of Sarbanes act could not be identified when challenged.

[Claude_Dreyfus]

Quote truncated.

 

But it's this bit:-

 

To manage an outsourcd team of developers, you need a manager; and a relationship manager; and a vendor manager; a handover manager; etc. etc.

 

that's key.

 

Recently I've suffered unacceptable delays to engineering deliverables because of the re-work that's been needed, trouble is the 'bean counters' don't factor this into the initial budget. Perhaps if they did they would realise that 'cheap ain't best' and that cost and time overruns are more damaging to repeated business with their end customer than a quick quid in the pocket for the supplier.

 

Indeed. It also requires a massive culture change in the exisiting company. Another aspect of outsourcing requires every single eventuality to be documented - more Business and System analysts required as well - and agreed. In my experince, there is no such thing as an Agile methodology when using this model. You have to assume they know absolutely nothing - and I really mean nothing at all. For me that is counterintuitive. These guys are development 'experts' (I am talking about two of the really big outsourcing companies now), and should not need lots of time-consuming to-ing and fro-ing to get the message across.

 

Requirements documents were getting so big - even for small changes - that the business were complaining. It took time for the BA team to get used to this new 'improved' way of working. Swpt away was the bad old world, where the developers were not only familiar with the systems, but also the business users - and more importantly how they used the system.

 

All these additional steps - the time taken to formulate new ways of working etc. - also impacts on the effectiveness of this outsouring model.

[Bon Accord]

My profession (Merchant Navy) was one of the very first to be 'outsourced', many decades ago. My current employer is actually my seventh, I left employment with the previous six not through choice, but in each case because I was replaced by someone willing to accept much reduced wages/longer working hours/less leave, a combination of or indeed all three. My 'replacement' has invariably been from eastern Europe, the subcontinent or the Philippines. In a couple of cases that meant redundancy and actual money, but most have been along the lines of "we don't need you anymore, thanks very much" and that was that.

It would seem history is about to repeat itself for the umpteenth time this coming April, but this time I will be due a redundancy payout - then on to my next employer!

Most people in the cosseted world of the public and pseudo private sector really don't appreciate just how lucky they are.

[Horsetan]

I've said this before, but it is SOOO much easier to leave the answering machine on. .....

Why bother? I have a fax machine. It's always on.

 

The other alternative is to convert your landline number to a premium-rate one - that way you get to make a bit of spare cash.

[C&WR]

I like your style, Horsetan. I may divert my direct line to a premium rate call centre to annoy the cold callers...

[APOLLO]

One of my daughters came home from school with a cheap small plastic "guitar" that played the most annoying electronic out of tune "music" that you have ever heard. Great, keep it at the side of the phone, and when Mr Pud Pud calls, I immediately "put them on hold, as I'm receiving a large number of calls" and stick the thing next to the speaker.

 

They usually hang up after 10 seconds, & if they don't, I do !!

 

Brit15

[Bill]

Be patient with the poor cold caller..

For tis a human at the other end,

Working hard to make it pay

By driving you right round the bend...

 

Its not their words they have to speak

They're written for them by a sneak

Then be not offended by their person

To what controls them put your curse on.

 

So try to brighten up their day,

With some warmth and cheeriness.

And politely send them on their way

With neither in distress!

[pH]

One of my uncles was a somewhat 'contrary' man. Once he had retired, an entertainment was to see how long he could keep a telephone salesperson on the line. The only rule of the game was that he couldn't be the person to hang up.

[RJS1977]

Not all outsourcing is done to save money. Earlier in the year an Access database a friend had been developing for 2 1/2 years was "outsourced" to a well-known IT company because the supplier were "experts" and supposedly knew more than he did (in some respects that was right in that the new suppliers were programming experts whereas my friend was self-taught, but on the other hand my friend knew both the database and the data it held very well whereas the suppliers were starting from scratch). So now any changes to that database now need a Request for Change and an Impact Assessment and someone has to pay the supplier a considerable sum per day to do the work. What do the supplier do? Ring my friend up and ask him how to do it!

[MJI]

Not all outsourcing is done to save money. Earlier in the year an Access database a friend had been developing for 2 1/2 years was "outsourced" to a well-known IT company because the supplier were "experts" and supposedly knew more than he did (in some respects that was right in that the new suppliers were programming experts whereas my friend was self-taught, but on the other hand my friend knew both the database and the data it held very well whereas the suppliers were starting from scratch). So now any changes to that database now need a Request for Change and an Impact Assessment and someone has to pay the supplier a considerable sum per day to do the work. What do the supplier do? Ring my friend up and ask him how to do it!

 

This would have been my fear but luckily a small company with 2 and a half programming staff and our Indian friend for the shape editor, a couple pof support and a sales person. The boss is similarly worried about hostile takeovers, so has engineered a safe port for all rights to the software.

 

I think I will be there until retirement but I will need to move the system to a more mainstream language for the next iteration.

[pH]

So now any changes to that database now need a Request for Change and an Impact Assessment and someone has to pay the supplier a considerable sum per day to do the work. What do the supplier do? Ring my friend up and ask him how to do it!

 

Been on the wrong end of that arrangement - I was the 'friend'! Amongst other things, I had to teach a two-day course on part of our system that they were maintaining to five or six of the supplier's staff, while my company was being charged for their time.