[HN Gopher] Offshoring roulette: lessons from outsourcing (2016) ___________________________________________________________________ Offshoring roulette: lessons from outsourcing (2016) Author : throwaway3157 Score : 107 points Date : 2020-02-24 17:49 UTC (5 hours ago) (HTM) web link (www.troyhunt.com) (TXT) w3m dump (www.troyhunt.com) | gentleman11 wrote: | Lets assume that the situation changes over the next 15 years and | these outsourcing places get really legitimately good at making | software. | | What can we, the highly paid locals, can do to justify our high | salaries at that hypothetical future point? | | (playing starcraft taught me a tremendous amount of respect for | East Asian creativity and work ethic) | inertiatic wrote: | Most of the tech behemoths already have offices around the | world. | | Maybe these offices are just following the great standards set | by the people working at the HQ. | | Even then, there are a bunch of companies that have their | engineering based in other countries. | | I personally worked for a few companies that are major player | in their fields (although not unicorns) that have offices here | in the Greece. | | Most of these companies have one thing in common, the | leadership, everyone at the C level, work and live in the US. | In fact, the companies I worked for had HQs in the SV. | | I don't think SV has a significantly better talent pool. My | anecdote is that my local team has had more than a couple | laughs looking at code written by our SV-based colleagues. | | But I think that building your business there certainly gives | you a huge advantage. | | Your engineering doesn't need to be there. | bilbo0s wrote: | > _Your engineering doesn 't need to be there._ | | and I'm fair certain engineering won't be there in the | future. Probably not even in the US. Just the research-y type | stuff might stay here longer to be close to the universities. | But assuming the market is left to its own development, | ginormous US based engineering teams will likely go the way | of the Dodo bird in the future. | inertiatic wrote: | I don't know if I can make an informed prediction, but even | if I could I don't think I would be that extreme. | | I would expect salaries to fall but I wouldn't expect | software development to move entirely. It should make sense | for a lot of companies to pay a premium to keep their | workforce closer to their leadership. | user5994461 wrote: | What do you mean by highly paid locals? With the exception of | the Silicon Valley or NYC bubble, developers in big cities in | developed countries are approaching US and European salaries | and they are increasing quickly. | | Well, truth be told they're already surpassed us. If you want | cheaper, you might as well go to Spain or Italy or even France. | bilbo0s wrote: | That's not really true man. I've worked with devs from | Argentina and Ghana, and let's just say we were all surprised | at how much the managers at my company were paying to those | consulting firms. Think devs getting USD350 to USD1500 per | month while I knew for a fact that USD50 to USD225 per hour | was being paid out. | | I think a lot of devs in the West would be almost shocked at | the amount of money devs make in other places. | cosmodisk wrote: | What differentiates US (most big software names come from | there) from the rest of the world is their ability to sell. | There are already enough countries on this planet that can | produce high quality software that could be sold as hot | buns.What most of those countries don't have is the huge VC | industry+ tons of people who know how and who to sell be it B2B | or B2C. This, however is changing slowly and you can expect | much more level field over the next 10-15 years. | PeterisP wrote: | The value that the role produces, and the growing demand for | even more software. Currently the companies can make a profit | paying the current high salaries and selling products, and they | need more developers - so one can expect that as the price | difference erodes, it will mostly be by the salaries of the | Asian developers being brought up to current first world | levels, not the first world salaries (for software - less so | for some other jobs) being brought down to the global average. | SamuelAdams wrote: | Since no one answered your question the best thing to do is | become very good at working with end users. BA work isn't the | same as software development but it is harder to outsource. You | usually need someone on site who can effectively communicate | with project stakeholders to capture requirements and write | them down in a way that developers at these shops can pick them | up and run with. That is a much needed skill, I've seen many | BA's make 100k+ at non FAANG companies in cities where the | median household income is 45k. | starky wrote: | My experience with working with Asia off-shoring is with physical | products, so this was interesting to see the software perspective | where there are multiple programmers working on something in | parallel, whereas my experience is more serial with the (English | speaking) sales contact communicating with the various | engineering teams as the project gets passed along. | | Definitely agree with the can-do attitude of China. Sometimes I'm | pleasantly surprised, other times a vendor thinks they are doing | us good and screw us over by completing work before we have | agreed to it. This is mostly a temporary issue until you build a | relationship with the vendor (in China, relationship is | everything) and know each other's expectations. | | While I've never worked with an Indian vendor directly, it is | interesting to hear about how people there have very narrow | knowledge bases. This is something I've noticed with people I've | interviewed that are recent immigrants, they know their area, but | when asked about the rest of what we would be asking them to do | they have zero clue. This is also (lesser so) a case with recent | Chinese immigrants. Not great when we are essentially hiring a | mechanical equivalent of a full stack engineer. | anthony_barker wrote: | He misses some stuff. | | 1) 4 hours of time overlap rule - you need to have overlap of 4 | hours between teams | | 2) Requirements need to be much tighter with outsourcing. Often | you need a full BA whereas with some devs you can work without a | formal spec but some wireframes etc | SamuelAdams wrote: | No, Troy specifically mentions differing requirements depending | on the country that the ousource firm is located in. | | >Another pattern I found time and time again when outsourcing | to India was that they'd want really detailed documentation. | This is always going to be a contentious issue and there are | many different views of how much should be done under what | circumstances. But more so in India than the other two | locations I'll talk about shortly, detail was important to | them. There were many occasions where we would make assumptions | that a feature requirement clearly implied certain things only | to later discover they was deemed "out of scope". Now that can | happen in any project in any part of the world, but it was | extremely prevalent in India. | | > On the plus side for China though, one of their strengths | (particularly over India) was the ability to get down to work | with minimal documentation. | Ididntdothis wrote: | I really don't understand why US companies are outsourcing to | India. The time difference alone pretty much sets you up for fail | unless people want to be working at midnight all the time. I find | it much easier to work with Costa Rica it South America where you | can quickly make calls during the day. Especially with | outsourcing you need to do a lot of handholding to get things | going so you need good direct communication. | | The whole idea of sending a big pile of requirements and then | getting something useful back simply doesn't work. You need | direct communication without middlemen. | lowercased wrote: | worked at a place in the south (think Georgia) that opened an | Indian office. about ~40 devs in the US office, they brought | in.. 5? to the Indian office. It was primarily for the time | difference, and their primary role was to triage and research | issues during the 'off hours'. Anything they couldn't figure | out bubbled up to the US, usually after several hours of | initial research. It wasn't a horrible approach, and I think it | worked OK because it was intentional. | thrower123 wrote: | I do a lot of work with a few of the big outfits, as we often get | pulled in to help setup a software product that they resell to | Fortune 500 companies as part of their package contracts. | | I have never seen a case where they actually add value; it would | always be much easier if we could just get directly connected | with the end-customer. | discreteevent wrote: | On India: I worked on a project outsourced to one of the big | companies. A senior engineer there said that when people | offshore, the person making the decision is a bean counter. So | they only look at price. They take the cheapest and they get what | they pay for. | | But if they would pay twice that (still at most half their normal | cost) using a smaller higher quality company they could get a | much better job done. | dreamcompiler wrote: | Cost can be reported as a simple scalar. Quality cannot. This | is why at most companies, cost counts far more than quality. | macjohnmcc wrote: | The company I formerly worked for outsourced to India and we | found a lot of accounting irregularities where we were be | charged twice for the unnamed senior developers and later find | out that it's the same person and that that person was not even | spending 100% of their time working on our project. It wasn't a | complete loss as some people really did a fantastic job but | overall I'd never recommend it to others. | zozbot234 wrote: | > But if they would pay twice that (still at most half their | normal cost) using a smaller higher quality company they could | get a much better job done. | | The whole problem is nobody can hope to spot the real "smaller, | higher-quality companies" in that chaotic, offshoring-driven | environment. Race-to-the-bottom is the equilibrium outcome. | bradknowles wrote: | I remember being brought in to operationalize the first version | of Norton Anti-Virus for Internet E-mail Gateways (NAVIEG) that | would run on Solaris (this was in 1996). It was outsourced to | an Indian company because no one in Symantec understood the | first thing about programming on Unix. Turns out that the guys | in India didn't understand programming on Unix, either. | | The Indian developers basically just transliterated the Windows | code to Unix, and got it to compile. Then they shipped it. | That's when the real problems started, and I was brought in. | | Now, I've never claimed to be a developer. At the time, I was a | consultant and Unix sysadmin, but the concept of "DevOps" had | yet to be born. | | What I could tell them was that, in 1996, basing your Unix | implementation on Solaris 2.5 (not even Solaris 2.5.1) was a | bad idea, because there was a whole host of things wrong with | that ancient version of Solaris, and if they wanted to be on | that platform then they needed to be on a much more modern | version. | | Secondly, threading on Unix at that time was ... problematic | ... and that was true even on the most modern versions of Unix | that were available at the time. Multi-process programming | worked well, however. On Windows, the reverse was apparently | true. So, naturally the outsourcing developers used threading, | and they used threading on an ancient version of Unix that had | about the worst possible implementation of threading. Oy. | | Of course, learning these things at this stage didn't help | Symantec. They had already outsourced their aircraft and gotten | an Albatross back in return. | | I did help them develop a testing regime that could relatively | accurately simulate a real-world distribution of mail message | sizes and types, with a real-world distribution of supposedly | infected messages, and then beat the holy living crap out of | the server trying to push that volume through as quickly as | possible. | | And I did get called back to teach a class on Unix to the lead | QA team in Denver, so that they could try to support NAVIEG on | Solaris 2.5. | | But so far as I know, the consulting company I worked for never | got called back to help them actually fix their design problems | with the code, and I think that project probably died a pretty | quick and vicious death. | | Also, so far as I know, no one at Symantec ever again tried to | develop or support any code that would run on any flavor of | Unix or Unix-like OS. | mathattack wrote: | Sometimes the math is "We can do it twice in India and still | save 50%" | | Anyone who has worked with the big vendors knows that the | correlation between quality and price is very loose. The lowest | cost provider is rarely great, but the high cost provider can | also be selling you a lot of juniors. | raincom wrote: | Exactly this. Usually, they have a couple of guys who are | really good in that team, along with lots of juniors who are | there for billable hours. | cosmodisk wrote: | That's pretty much the model amongs most vendors. Just so | recently we were implementing a new system. Our account is | small,so obviously we don't get the level of people some | big corp would do. A junior,yet capable, consultant was | working on the majority of the project. However as soon as | we started having some more serious technical issues, it | was like 'emm, I'm not sure'. Then we end up on a | conference call, 8 people in total. Bloody hell,I thought | I'll pull all my hair at the end of the call. Absolutely no | value or capabilities to explain how we get out of this | situation. Eventually, after our CEO suggested we drop this | thing all together, we did get some senior person involved. | Honestly, if I'd ever had a business,I'd hire on spot.The | ability to talk to different business people in a way they | could understand, technical knowledge and business acumen | was fantastic. Shame all companies only have one or two of | these people... | ta1234567890 wrote: | Sounds exactly like law firms. | mc32 wrote: | They demo the skilled people and once they have the account | they turn it over to the juniors... | | But that probably works in most cases/places anyway. | makr17 wrote: | Yeah, but so does every US-based consulting outfit I've | ever seen... IBM, Oracle, Accenture. The knowledgable | Senior Dev answering your questions during the bid goes | away _quickly_ once you sign. They're off to convince the | next sucker... | bradknowles wrote: | That's why you write the contract to the outsourcing | company so that you lock in those experienced people for | an extended period of time -- like years. | | But then the price mysteriously increases to the point | where you might as well have hired them on-shore and | you're not saving any money. | | So, do you want to save money by offshoring everything, | or do you want to get good people to actually do the real | work that needs to be done? | detaro wrote: | > _Anyone who has worked with the big vendors knows_ | | Probably why parent mentioned finding a smaller company. I | don't know about the Indian outsourcing market specifically, | but in many sectors it seems a few mid-sized companies are | the best for this sort of thing. | | Which also means you need to find the right one for your | problem, your purchasing department won't be set up with | them, and you won't be able to just order as much capacity as | you want, so getting there is hard. | cosmodisk wrote: | https://www.google.com/amp/s/www.techspot.com/amp/news/79848. | .. | markkanof wrote: | This isn't exclusively an Indian outsourcing issue. I used to | do work for a small US based contracting company. At the time | I was mid to senior with about 10 years experience. On all | projects they would present me to the client as the level of | developer that would work on their project, but would then | also assign a few just out of bootcamp devs to work on the | project and we were all billed out at the same high rate. | iamsb wrote: | It is quite interesting to re-read this after the zoom ipo. Zoom | built a huge team in China, effectively outsourcing most of the | development to lower cost countries, that gave them leverage in | terms of being able to deploy capital more efficiently. | | There are certainly ways to work around most of the problems the | author outlines. They are definitely real problems, same as | spending 5x for onshore resources. Ideally you should build | onshore teams, if you can spend the money. But if you can not, | then do not get discouraged by these problems. Employee churns | are not that difficult to mitigate, just matter contracting | properly with the employees and providing enough consideration in | the contracts. | throwawayesteu wrote: | How to do the outsourcing business if you want to provide premium | service? Even if the field requires specialization, say machine | learning / data engineering, it's hard to justify the price that | is 40% more than average for the area (say Eastern Europe). | Example: I work for a company that does ML/DE services, and I | believe that everyone in the company (we're small company in | Eastern Europe) tries their best to do the great job and do what | is best for our clients; plus seniority and talent is way above | average for the market (mostly due to specialization). But we're | still having hard time increasing our hourly rate. | | What is something that we can do that would say "these people are | worth it, let's go with them even though they are more | expensive"? | cosmodisk wrote: | Higher prices!= higher quality. Here's how your post reads: we | have senior devs+ we try charge 40% more,yet clients don't buy | in. You know what? Every shop in town has senior devs and most | of them are passionate. Depending on which Eastern European | country you are based in, even the entire team full of PhDs in | ML with 10 years experience may not sound that extraordinary. | You need to find the reason why you are ACTUALLY better than | your competition.Do you have tons of white papers or cases | studies on your website that clearly show how and why you are | solving these problems? What are you doing differently compared | to the guys from the shop across the road? You need to be very | very comfortable with saying " fuck yes, we are 40,50 maybe | even 100% more expensive than any other company you'll be | speaking, but here's 25 reasons why you search for ML experts | stops here". These things are learnable, however if there's no | strong sales culture in the business,I'd advice to start | looking for someone who could deliver these messages to your | prospects.My experience: work for a company that operates in a | low entry, saturated market and sells services almost 3 times | the average price in the country. | shruubi wrote: | I just came out of being forced into running an offshore team | from the Phillipines for roughly six-ish months, my experience | was that they were very affable with good english skills and | worked hard, there was a noticeable problem with technical skill | which caused a number of bugs to occur to the point where I would | just spend the time fixing them myself than throw them back at | the team where they would cause more problems. | | The biggest problem however, was that no matter how many times I | asked or provided documentation/feedback, they would ignore | established coding standards and established processes and just | do things their way, and when I would ask about this, I would | just get shrugs. | | Finally, we got saddled with a "Project Manager", which I put in | quotes as their contribution to the process was giving daily | excuses as to not turn up to our daily progress calls, and the | ones he did turn up to, he would visibly fall asleep. When I | eventually pulled him up on this his response was that "he wasn't | directly paid for but an included part of the cost so you can't | complain about what you get." | | Admittedly all of the above is rather negative, but I think this | highlights the "get what you pay for" aspect of offshore | outsourcing. | cbg0 wrote: | I work remotely from Europe for a North American company, so | here's my two cents on this topic: | | Having cost as the reason for going with remote devs is a very | bad idea in my opinion, and it should only be seen as an added | benefit. You don't want to hire cheap devs because they usually | suck, and great developers will cost you quite a bit regardless | of where they live. | | While it may be difficult to compete with the huge corporations | in places like SF, NYC, Seattle, where these competing | corporations offer huge salaries, great benefits and have brand | recognition, there's quite a lot of value to be had with setting | up shop somewhere remote, where there's lower competition and | where you can offer above average salaries to attract top talent | in the area. Ultimately, every company says that they only hire | the best, but unless you're paying top dollar in your area, | you're most likely not hiring only the best. | | I believe that most good developers will want to be part of a | stable company that is actually building amazing things, instead | of being part of an outsourcing company where they get passed | around from project to project, and their resume will perpetually | read "Software Engineer at Outsourcing Company Ltd." - most would | trade that in a heartbeat for one of the FAANG companies. | | If you want to have the best kind of success with remote devs, | don't outsource, invest a bit more and set up an actual office | and hire the people directly, people that want to have a career | with your company, and not a contract for an unknown period of | time, which they likely won't be able to put on their resume. | numbsafari wrote: | I think this is a really valuable perspective. Would be curious | to hear from more folks on "the other side" about their | experiences. I've often considered doing the expat thing and | trying to work in or setup such a shop. | british_india wrote: | Exhibit A for the dangers of outsourcing software development: | Boeing's offshoring of the 737 MAX software. | PragmaticPulp wrote: | Hiring good offshore developers directly as remote employees is a | much better option, in my experience. | | It requires more up front work to identify, hire, and retain the | remote employees, but you need far fewer developers when you can | appeal to the best developers who know what they're doing. | | This doesn't work if your company has any attachment to | headcount, though. It can be a tough sell to hire 3 remote | employees for the price of a cheap team of 10 from an outsourcing | firm if your company only looks at the numbers. | MarkMc wrote: | > It can be a tough sell to hire 3 remote employees for the | price of a cheap team of 10 from an outsourcing firm if your | company only looks at the numbers. | | Can you expand on this? I would have thought it was cheaper to | hire the remote employees directly than hire the outsourcing | company... | chii wrote: | The premise is that an excellent developer can command a high | price, whether remote or not. Some developers place a premium | in remote friendliness, and thus allow a slightly lower | salary for it, but only up to some amount. | ska wrote: | I suspect the argument is that workers are just not fungible, | but the outsourcing approach sort of assumes they are. | cosmodisk wrote: | Pretty much my experience re Indian outsourcing. What I used to | find most annoying is that 'manager' mentality: I appreciate a | lot of people like to boss people around and,as the author | states, it's kind of safer (and better paid) step on a corporate | ladder, but boy some of them are useless.. You talk to the guy, | he agrees to pretty much anything,even If I'd ask to build a lift | to mars.Then eventually he comes back with dev's questions.I | provide very detail and explicit info on what I need(For anyone | who has any knowledge in the tech they used it would almost be | like asking to write a couple of loops).Again lots of | yes,yes,yes.Then silence and again even more questions. Manager's | function is absolutely useless in this case. Also, if the churn | rate is low, the companies usually have very capable people who | tend to know their shit. | crystaldev wrote: | It's probably because engineers are not good at dealing with | customers. | | Edit: Apparently nobody gets this reference anymore, and I'm | old. | bradknowles wrote: | No, we're not. | | And don't you even THINK of stealing my red stapler. ;) | alatkins wrote: | Take my upvote fellow oldie. Office Space can't be mandatory | school curriculum any more :-) | inkeddeveloper wrote: | I'm a people person, damnit! | specialp wrote: | I think too they tend to give you their worst teams to start to | see if they can get it done. We had a team from India yes, yes, | yes us all the time, and then ask loads of questions 36 hours | later that showed they had no idea of what was going on and had | no hope of delivering. It would continue like this as it seemed | like they always wanted to have the ball in your court and wait | on you. The day + latency was killing us too and eventually we | were a week from deadline and I thought they'd never get it | done. | | Then they must have brought in the SEAL team six of Indian devs | and just got it done with no further questions asked. I was | really surprised. | reaperducer wrote: | There just seem to be some cultures where saying "no" is | difficult or taboo. | | I've never worked with Indians, but I've had it happen to me | with people in both Thailand and Austria. The Austrian one was | particularly bad because it involved the movement of people and | physical goods. Everything was "yes, yes, yes" until the day of | execution, when it was radio silence. | dfcowell wrote: | I can highly recommend "The Culture Map" which I'm about half | way through right now. Really helped me wrap my head around | this, and other cross-cultural communication pitfalls. | admn2 wrote: | I heard Argentina as a popular place for "near-shoring", which | likely wasn't very popular when this was written 3 years ago. | Anyone here been using Argentinian tech talent? | numbsafari wrote: | When I worked as a consultant, mostly remote, working from | Argentina was awesome. Buenos Aires is a great city, and the | time difference is perfect for the lifestyle, as you are | generally slightly ahead of the US, so you can play late and | sleep in a bit while still getting a normal business hours day | in. | blaser-waffle wrote: | My org has a lot of talent in LATAM. Argentina is onerous due | to the ever changing financial situation (taxes, regs, | currency, etc.). We do have a few bodies down there, though, | and general consensus is they're competent. | | Chile and Mexico are generally more stable, and both the | Chilean and Mexicans I've worked with remotely have been solid. | We had a technical (data center) team in Mexico that only had 1 | English speaker but still got stuff done quickly and timely. | | Also heard good things about the Zona America in Uruguay. No | direct experience with it, however. Part of me thinks about | sneaking away down there for a few years... | jermaustin1 wrote: | I've worked with a number of Argentinian developers through | using Avanade and Accenture on projects. The developers were | great, even spoke decent English, but since it was through | Avanade or Accenture, after 3 years of the managerial- | interference, overhead, cost overruns, and contract disputes | with what is considered in-scope/out-of-scope, the projects | were eventually canceled. Had we just been able to hire the | developers on an hourly basis, everyone would have been | happy... well except the sales managers, delivery managers, | development managers, and project managers. | | That said, I didn't care for the way that our company was | billed $75-150/hr for a developer that makes $350-1200/mo, and | that the developers made so little when their managers were | billing so high. | | Early in my career, I was livid when I found out that my time | was billed to the client 3x what I made, so I cant imagine how | demoralizing it would be knowing you are paid 20x less than you | are billed out. | cosmodisk wrote: | This, sometimes has very interesting consequences. A friend | worked for a company that basically moved parts of | sales/customer service to a Northen African country.They | hired people on a few hundred dollars a month(if that much) | to sell high ticket hotel bookings sometimes going for | thousands/day.The team struggled to comprehend that anyone | could get a room that costs 10 times more their monthly | wage.This highly affected their ability to service/sell. | Eventually the entire thing got canned and moved to Europe. | Ididntdothis wrote: | Pen testers. They were very good and the time zone makes things | much easier compared to India. | powvans wrote: | I'm based in the US and worked with a remote team in Argentina | from 2013 to 2015. They were fantastic. Most of the team was | based out of the company's office in Cordoba, but we also had | some remote devs who lived in Buenos Aires rotate into the | team. The offshore firm took great care to make sure that | everyone on the team was well trained on the specifics of our | project and general development processes. | | Last I heard they were purchased by Mercado Libre in what I'd | assume was an acquihire. | rossdavidh wrote: | I worked very briefly at a place (which was run poorly, btw, | which is why I left), that used Argentinian devs for some of | the work. The devs seemed good, and the similarity in time- | zones compared to U.S. helped a lot with communication and | coordination. | | I did hear, however, some discussion in the office that there | was a strong suspicion that the Argentinians were working on | other customers' projects during the time they were supposedly | 100% on our project. | dang wrote: | Discussed at the time: | https://news.ycombinator.com/item?id=12923925 | AnimalMuppet wrote: | The worst I've ever seen: Not only did the contractor deliver a | buggy, half-finished product, he also used our printer to print | out an offer to a competitor to sell them our source code! ___________________________________________________________________ (page generated 2020-02-24 23:00 UTC)