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Rory on Outsourcing

Rory on Outsourcing

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There is a a great Roryrant on last night's West Wing episode involving outsourcing which is already stirring up controversy within hours of its posting. 

Some viewpoints put the crosshairs on the slackers, citing some kind of industrial Darwinism theory. Right now, it is the slackers that go back to flipping burgers.  How long will it be before you are telling Sam Gentile and Ted Neward that you want a combo 3 with extra pickles?  The episode threw around some amazing numbers, on the order of 3.3 MILLION lost programmer jobs over 10 years.  Hopefully some of that was artistic license and shock value from the writers. But 3.3 million surpasses the number of Excel macro writers by far and dips quite heavily into the line of business Morts and well into the pool of Elvii (plural of Elvis?) as well.

I disagree that the overall job mortality rate could really be that vast.  Part of the reality is that major technology corporations aren't going to outsource development of their major products... you don't outsource your own intellectual property lest you create your own competitor who can produce goods cheaper than you. Microsoft is not going to outsource all of its development.  The fact is that you don't pay multiple millions for a guy like Anders just for grins, and you don't hire away a large portion of DevelopMentor if you are purely focused on bottom line numbers.  Quality will count over quantity, and there will remain a need for companies to leverage expertise instead of simply producing.

That's the rosy view.

The pessimistic view sees even a slight dip as a precursor to something horrible and permanent.  A combination of history and hysteria scares us into thinking that butterflies can affect weather patterns. Outsourcing is happening and will continue to happen.  Companies will always seek means to create products cheaper, and consumers will continually look to the market to increase competition while reducing cost, sometimes at the expense of quality. Yet this does not mean that jobs are necessarily lost, they are just realigned into different sectors. Maybe flipping burgers isn't in store for over 3 million currently employed developers... someone has to deliver all those androgenous clothes to The Gap.

How can we expect to keep “the high-end architecture jobs“ when we can't even agree on what architecture means?  We toss around vague terms like SOA almost in an attempt to justify the complexities of software development while the platform vendors all show the flat simplicity of their solutions. All the while I write this (and you all read this), someone in Bangalore was just paid $2.50 for surfing the Internet while you just got paid $25.00... you both did the same thing and provided the same value to your company.

SteveV's comments to Rory's rant reminded me of part of the West Wing episode, spoken by Leo:

"Those 'Made in the USA' labels you see on clothes?  I heard that even those are made in Mexico now."

  • I've read in numerous finance magazines (Fast Company, Money, Business 2.0, etc.) that outsourcing is not to blame for the sluggish job growth here in the states. Rather, it's high productivity, which has been increasing still at record high rates, especially in the information/computer/telcom fields. The more efficient a company is, the less employees they need to make the same $$$.

    One article compared the US to England, where annual productivity is several percentage points lower than in the US. (Like 1.2% vs. 4.8%, or something in that ballpark.) The point is, Britain has low unemployment (especially by European standards), but this will catch up to them in the end.

    The point is, the US may be in for a bit of a bumpy ride (by our standards, which are very, very high), but in the end we'll make out. Why? #1: We have high productivity; #2: We're still a place where the best and brightest in other nations come to; #3: We still have the most disproportionate share of the world's guns and butter.
  • Brr... I do not understand "cost vs. quality" trend.
    Usually you can hire the same technical level of people and the same level of management in cheap country like an India, Russia or Ukraine.

    But sometimes you can get weak technical level or weak management. The same can happen even in case if you will work in USA. In USA this is rare - as weak company always die, but in India one project can feed company for a years.

    The whole new concept of outsourcing will be to find correct team and possibly reduce risk by using duplicate efforts. This is the future. My personal opinion. I'm not a God ;o)
  • Hi Kirk,

    I actually had this debate last week with a co-worker. She said that "all companies are like that" but I disagree.

    How would you rate Microsoft? From the outside it looks like there is very little slacking going on, and I'll bet it has something to do with good wages and a fair work environment.

    Where good wages <> high priced slackers
  • P.S.

    I don't know Sam and Ted personally, but I dought they'll ever have to be flipping burgers for a living.
  • Peter,

    I tend to agree with you, but given their technical track record I'd bet they would be the best freakin' burgers you ever had ;)


    I don't have any hard numbers to back me up (maybe I should run for office), but I would think the outsourcing trend would be more apparent in companies that don't make shrink wrapped software and platforms. The banks, insurance companies and widget makers of the world are the ones likely to minimize the cost of building their internal software systems by outsourcing because they don't look at it as their highest value activity. They just want something that allows them to pay fewer people to inventory, sell and ship their widgets. If they can pay less for that custom system, then they are going to seriously consider that option - regardless of the possible long term consequenses.

    I agree that the super smart people that Microsoft and Oracle hire don't have too much to worry about from outsourcing; but we average, hard working coders toiling away for the widget makers of the world are shaking in our boots.
  • AT - It is not necessarily "cost versus quality". The fact is that you don't outsource your key competencies or you risk creating a new competitor and handing your competencies to them with your payment for invoices. This is management 101. Sure, there are plenty of great programmers around the world, I never said there weren't. Microsoft hasn't demonstrated a propensity to handing off large portions of Windows code to an outside company to create for them: they employ programmers in-house, and largely on the Redmond campus.

    Peter - I don't program for Microsoft, I am a Developer Evangelist, but I have not met a person at Microsoft yet that I would consider a slacker. To the contrary, there is a corporate pride and culture that drives people to keep up with the rest, to drive to succeed. Maybe that is part of the notoriously difficult hiring process, maybe that is just part of forming teams with the absolute most qualified people available. I have worked in quite a few companies who simply put warm bodies in chairs and called them programmers, and the majority of employees at those companies did not exhibit any of the same qualities. I do know Sam and Ted, and I doubt they will flip burgers either... that was written for shock value and exaggeration.

    Joe - I agree, and pointed this out in the post. Microsoft, Oracle, Sun, and other software development shops are not likely to outsource core components of their competency, although each will certainly outsource parts of nonessential and support functions. It is the line of business application developer who is at risk.
  • I don't know if it's just me but it's not "outsourcing" that makes me concerned but rather "offshoring". You argue on the point that no sane company will outsource their core competency lest you create your own competitor but if you're "offshoring" - this is your branch in a forein contry AFAIC -, you don't have to worry about losing IP. Who says Microsoft can't move their Redmond based dev shop to India tomorrow? It will still be Microsoft but Windows will now simply be made in India. Am I missing something here? I hope so. 'Cause I'm certainly quaking in my boots. I better brush up on my burger-filpping skills :P
  • There are all sorts of problems with our industry, and although this doesn't reflect every company the following is certainly the majority.

    First of all, most companies don't seek experts, they seek inexpensive labor. Second, most projects are not well thought out, they are 30,000 feet overviews of what the businesses need. Furthermore, many businesses set unrealistic timeframes due to the numerous times they have been burnt in the past. Finally, quality is a summation of applied skill, project definition, timeframe and project focus.

    Every developer, especially early on in their career, should be paired with a senior developer to learn a specific trade or skill. This occurs in almost every profession but IT. Doctors, lawyers, plumbers, police officers, electricians, etc. Furthermore, this rediculous mentality of requesting each applicant know 10 languages proficiently is absurd. How many doctors do you know that practice more than two disciplines? How about a lawyer that practices criminal law and corporate law both? Sure they may exist but is it common? Programmers should be specialists not generalists, we must get out of this mentality if our profession is to mature.

    How many projects have you been on where you walked in and the requirements for the application were a summary paragraph explaining what the application needed to do? Worse yet, I have been in some where the management starts off by saying... "I envision..." and nothing is on paper. A 30,000 foot overview is great for them, but a lot can go terribly wrong between 30,000 feet and the ground and it normally does. A lack of planning and forethought is the #1 failure for most applications.

    Is it me or do the timeframes just keep getting shorter? You we have all heard the horror stories and many of us have lived them. But shorter timeframes do not benefit anyone and usually make matters worse. Presuming everyone received well thought out and detailed specifications the timeframes might be realistic, but lets face it, that just very rarely happens.

    Finally, for companies to get ROI and a solid product that can contribute to the organization they must work harder to correct problems that lead to the end result. They must take blame for and learn from past mistakes rather than say there aren't enough skilled workers here. People aren't born doctors, lawyers nor programmers, they are nurtured and trained... the ones that can't hack it go on to do other things. The ones that remain want to learn and contribute to their profession... Isn't it our responsibility to see that they have all the opportunity to succeed?

    Think of it this way, call an architect and tell them you want a house. It needs to have 12 rooms, two-stories, a basement and a pool. See if they come up with the same design you have in mind.

    My $.02...
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