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January 24, 2007

India software outsourcing: One unhappy customer

Steve Hamm

When you hear complaints about offshoring to India, usually it's about call centers. The hard-to-understand accents, high turnover, etc. make this a tough business to satisfy in. But, from time to time, I hear pointed complaints about India's software programming work. I got one today from Chris Stone, CEO of StreamServe, a US-based enterprise document presentation software company. (And former vice-chairman of Novell) Usually, when I hear negative comments about Indian programming, it's in situations like this: An American firm is trying to manage a small captive shop in India. The top Indian software services outfits say companies would be better off dealing with them because they manage the projects, assure quality, and can scale up and down quickly. That pitch makes sense. But do things really work that way? I'd like to hear from people in corporations who have contracted out relatively small projects to Indian outsourcers. Did you get what you expected?

Here's the e-mail I got from Chris, laying out his reasons for dissatisfaction with his Indian software experience:

We bought a company (name withheld) in order to secure a missing white space solution.

After a year or so we dropped the product. That left us with a number of resources in India to use for other purposes.

We chose to use the developers for other projects and to hire resources for Support in order to cover Asia technical support as well as 24*7 and weekends. In other words, it became our offshore alternative.

We started with some project help in India and then offloaded some product maintenance to them. It looked OK to start with and we gave them 2 bigger projects. What we discovered was the deliverable was a very poor solution. The product deviated from the specification substantially. It looked like it was done by kids....and it was. We had to do an enormous amount of patching as well as realizing that they "borrowed" a substantial amount of code from other sources in India. Even though we were told it was Open source, there was no way to trace the IP, and proper branding.

Both of these projects will have to be rewritten sooner or later.

Later on we started another project. The first and last task was some

platform user interface development. Yet another disaster. It was

late, poor code and had to be re-written. We decided to close up the office and get out. (BTW - take 18 months to close an office down in India).

Some of the problems we encountered:

- Communication. You will never hear about problems until it is too late. It's a cultural thing. They loose face if they let someone know they don't know what they are doing or that the result is below par. The problem is that there is no way you can manage this and you cannot take actions. You end up with either a dropped project or a bad product. You need to have someone you trust on the ground. -Infrastructrure. Our team was in Mumbai. Many in high tech use Bangalore. The Internet and phone connections were awful and dropped four to five times a day.

- Loyalty. We noticed a dramatic change in resources constantly moving. People were always leaving for another 20% salary increase. It's all about cash and who will give you more.

- Micro Management. If you are to avoid some impact on lack of information sharing about any problem you must micro manage the project. Preferably, you need someone there full time, which we couldn't.

- Cost. Well, it looks cheaper on the surface but caveot emptor. In the end, this cost us more and we were throwing money away. Furthermore, t is not that cheap any longer. WE moved our entire offshore model to Ukraine and are extremely pleased.

- Quality. In short, we discovered that the code developed in India was either poor or eventually thrown away. Not very well invested time and money.

It's probably better to use India for QA work rather than Development. Maybe we acquired/hired the wrong resources, or we didn't explain the product well enough, or we weren't as prepared for off shore business as we are today, but after moving the resources to Ukraine, I would not try India again.

03:16 PM

Off-shoring

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Thank you for making these complaints known to the world. I hear horror stories about outsourcing projects gone wild many times. But for some reasons, journalists don't want to write about the subject. But I really doubt whether Ukraine, Russia or China is any better, especially when they grow to be as big as India.

Posted by: Jordan at January 25, 2007 02:32 PM

We recently outsourced a software development project to India. However, in our case we had the offshore team come up with the product design after several conversations. Also, we expected them to follow a process (not documented) to build similar components. In the end, the business knowledge required to create the components were not sufficient, but also there was plain bad programming. Lack of error management, logging, and code formatting to our declared standards. In any case, we found that software testing works extremely well, but software development (with requirments of high domain knowledge) require much much more hand holding.This leads to too many cycles between the offshore and onshore teams, and it leads to too many conversations thru Skype / phone / video. We found it easier to do it at home. However, it was worth a try. Like in finance, no risk / no return.

Posted by: nm at January 25, 2007 04:06 PM

"The top Indian software services outfits say companies would be better off dealing with them because they manage the projects, assure quality, and can scale up and down quickly."

Come on Steve - isnt there something called marketing? :)

The analysis is quite apt and does apply to the vast set of companies other than the big-six. But then the big- INFY, CTSH, TCS, WIT, SAY etc will refrain from touching anything less than $5M unless there is a strategic intent.

The fundamental problem is that India has a large mass of technical and engineering skills. However the vast majority of these lack formal software education. The Big-six offset this by providing an induction training before they are allocated to a project. Their position is slightly better. The smaller shops lack this infrastructure and are encumbered with folks who really spend time picking up skills on the job. Also for the vast majority the goal is to acquire the skill in demand rather than being a passion. This is the principal difference I used to see with software engineers here in the US.

Now on the management. The industry thrives on the low margin masses, which are mainly the fresh or low experienced engineers. Managing them is a challenge. Further it is also a matter of status to move quickly to managing. Thus you find a person with 3-5 years of programming experience now managing a team of 10-20 engineers. First 3-5 years is not even sufficient to master software skills without formal education, then without any training in mangement they are thrust into an environment of managing people in a high-churn low loyalty environment. This is why micro-managing as you pointed out is an issue.

The Indian software industry runs as a software factory and the quality is comparable to the shoddy manufacturing in the incipience of the Chinese manufacturing industry. However, just as that industry has matured - so will the quality in Indian software industry in due course of time.

You will get better pockets software engineers all over - Ukraine, Poland, Ireland, Estonia but the masses are limited and initial costs are high.

Dont get me worked up about the 11th-hour syndrome. Its always communicated at the last hour that the deadline cannot be met.

Thanks to the herd mentality in the US - we let software go out of our hands. Now, sit back and enjoy the wild ride.

Posted by: J I Prakdi at January 25, 2007 08:03 PM

Why BW is full of India bashing? Why can?? the reasons for Indian?? success and dominance in IT services be as simple as Indians enjoys dazzling brilliance and high IQ and superior EQ? Here are some hints:

38% of doctors in USA are INDIANs.

12% scientists in USA are INDIANs.

36% of NASA scientists are INDIANs.

34% of Microsoft employees are INDIANs.

28% of IBM employees are INDIANs.

17% of INTEL scientists are INDIANs.

13% of XEROX employees are INDIANs.

Co-founder of Sun Microsystems: Vinod Khosla

Creator of Pentium chip (90% of the today's computers run on it) Vinod Dham

We are the RISHEST ethnic group in US! American IT boom is not possible without Indians. Give us credit.

Posted by: Ravi at January 26, 2007 01:22 AM

Ravi, I will not let these lies spread. These figures about Indian success in America are FALSE. There are nothing to back them up! So stop lying!

Posted by: HC at January 26, 2007 10:14 AM

I bought 200 shares of Sun Microsystems stock in 2001 for $21 a share and sold it at $5 last month, while my other tech stocks have all recovered nicely. Now I know why I lost a whole bunch of money. I owe it all to the "dazzling brilliance and high IQ and superior EQ" of the Indians.

Posted by: HC at January 26, 2007 11:14 AM

Chris's story is not quite unique and neither his reaction to the experience. Several offshore projects do not provide desired results and that could be from various factors including but not limited to the right process framework, knowledge and experience of cultural issues, Proj management and resources. I am in the industry and have been providing similar services for close to 10 yrs both from India and currently from US. I have seen my share of successful projects and failures based on which I can clearly say that generalization based on the experiences of Chris is not fair. Like with any execution model whether India based delivery or even if every developer is in the same room, if you are not ready to invest time in or cant get hold of some vendor with experience it can lead to failure. Leading researchers have reported that only close to 31% of all Software development projects succeed and a large % of failure in projects is attributable to poor management of the Development Process.I am glad at least you had some initial success in Ukraine but I would recommend you invest time in getting the process right, get the right level of local leadership and understand socio political nuances if you wish continued success. FYI most of the top Indian Software companies are in eastern Europe so dont be surprised if some your existing team moves to Infosys or TCS or Satyam for a 20% higher salary - money still is a huge motivator & nationality does not matter

Posted by: Srinivas at January 26, 2007 07:38 PM

While its pretty amusing to see the self righteous comments of my fellow indians going gaga over the indian intellectual might .....we should also understand the circumstances in which the indian scene has been created...with the least amount of investments the 'Indian IQ' has managed to capture the fancy of the world.While i agree that it still has a long way to go to be at the peak of the intellectual capabilties of the world, no one can deny that we are on the wrong track.

The key for the next 20 years is to put in more investments into basic infrastructure and education so that the current goodwill could be leveraged upon.

And as far as the performance of the sun stocks are concerned we all know that leadership/PR is more critical to a company's short term performance as opposed to everything else.

Posted by: Jassim at January 27, 2007 02:46 PM

I will have to strongly disagree with this article and the comments given so far. No need to do bashing, no need to call people names. Here are some different comments (for all they are worth): The nature of the world economy is such that when India or China for example build up their industries so do the local standards of living and in parallel the salaries....

Have you thought that as outsourcing grows to these countries so does the competition for talent locally. Have you looked at what the salaries are for experienced / productive employees (engineers, programmers...) are in China? Have you looked at the cost of real estate (appartments / villas) in Beijing? in Shanghai? in Shenzhen? Have you thought who buys these places and continues to drive the prices up.... Have you thought that mortgages get paid off in 5 years (on average) in Shanghai...

The answers are relatively simple -- salaries are growing and as a result local professionals are buying cars (more expensive than in the US), apartments, flat panel TVs etc....

All this points to the fact that as standards of living are going up, outsourcing is going to change its direction too -- rather than China or India, next is Vietnam....and then?

Posted by: Nikolay at January 27, 2007 10:16 PM

There is no doubt that the proliferation of IT companies in India, in last 10-15 years, has added few badly managed companies compared to companies (Read Infosys,TCS, Wipro and Satyam) which are creating a niche for themselves in IT world. Even the NASSCOM, a consortium of major software companies in India, is equally concerned about the issues raised by Gentleman Chris Stone.

We Indians cannot turn a blind eye if such kind of issues are reported from the country with still holds the key to success for Indian IT companies. At the same time I would submit that lot of Indian Companies are working much harder to keep their customers and themselves upbeat in ever changing market.

Unhappy customers can report their issues to NASSCOM so that something can be done to curb these one-project-profit companies. Secondly, it would be good to get proper reference from existing customers before offshoring development work to India (or to any other country).

Posted by: Ashok Sharma at January 29, 2007 01:00 AM

Thanks for bringing the issue out in the open for discussion. Before we launch into flame wars, consider a very simple explanation, failures happen everywhere and with anyone. Out of 100 projects some will fail irrespective of the location of development and cultures. I have seen multi million dollar projects fail for the same reason in US and in India.

While I am an Indian and can be accused of biases, irrespective of that, the simple solution to the difficult question is not in blaming off shoring , it lies in effectively managing your risks, recruitment processes and development processes, just as you would do with any other project.

Posted by: Vineet Tyagi at January 29, 2007 07:28 AM

With close to 2 decade of software development experience, I feel that the availability of technical talent is increasing in India. But, in general it is still a problem. For successful outsourcing, key is in having right process in place and bringing in the right people. Wherever this is overlooked, it fails.

Posted by: Bimal at January 30, 2007 12:05 AM

Hi all,

Everybody seems to miss one obvious and simple explanation here. The population of India is very large ( maybe 1 billion?). There is bound to be a 1% creamy layer in any population. However in a sample size of 1 billion, this 1 % of 1 billion is a very large number. Then again the best among this cream (the cream of this cream like IIT graduates,etc) comes to western countries in search of greener pastures. Naturally since these are the cream of society , you get to see only the best. This clouds the thinking of the lay western person, who thinks all Indians are geniuses, because he has met only the geniuses. Now with this faulty assumption he comes to India to allocate the hi-tech programming work, thinking that everybody in India is a genius. The result then shocks and confuses him.

Posted by: Mandar at January 30, 2007 11:20 PM

I created in the middle of 2002 an development unit in the ukraine from scratch. step by step i expanded the team to more than 70 prof. developers right now. beside Chris, some other customers told me about their bad experience with India and especially the culture there. I never looked at the indians people to create an development unit there, because everybody knows or should know that the most significant properties beside coding is the culture. As european??s (germany and the ukraine) we are mostly like americans and we understand to drive for the long and successful run and if you are a lucky guy who knows how to double-check, you will find good developers and leaders in every country. while salery in software development increases overall, its going to be more difficult to make it happen. As a customer with some near- or offshore locations, you always should move an trusted person to your project and double-check the upcoming results every month. Thanks to my best ukraine developers and also some respect to the Indian guys - especially to thoose who are in some european or russian locations right now and searching for cheap european software developers.

Posted by: Werner Kreiner at February 1, 2007 01:42 AM

Typical human mentality!! One person does something stupid and you blame him, his clan, his society and what not! There are thousands of IT service providers in India, more than a million people in the software industry. How on earth can you generalize on such a wide segment of the indutsry. Some of the companies do a good quality job and some dont. You cant credit all the Indian programmers for a quality work, nor can you blame the programmer community for some shoddy work done by someone.

Also for the top Indian IT companies, they are servicing clients in thousands of projects. All the projects cannot be a smooth ride and you cant make the customers always happy.

I find some of the comments quite ridiculous when someone suggests that they believed a company making the right promises but it failed to deliver. Now have not you heard of anything called reference? Talk to the customers which the company has serviced and get feedback in writing and then decide who the project should be awarded to.

Stop generalizing! Some of the American readers of BW keep moaning about outsourcing and sound so hypocritical. In the event that the american car makers are taking a beating from the Japanese car makers, shall we forget all the contribution the American automotive industry has done to the world? Shall we bash the GMs, Fords and Chryslers for producing inferior cars compared to the Toyotas and Nissans? I am sure each of the American car makers is trying its best to bring out high quality innovative models. For some models, they succed and for some they fail. We cant generalize that all american cars are bad.

Posted by: Sumeet at February 1, 2007 02:36 AM

US workforce will have jobs and US itself will be a major driving force behind growth and world economy for few more decades.

In US like today more and more managerial roles are created and appreciated than plain ones, it will not go away soon.

Posted by: vijay kurhade at February 10, 2007 04:16 PM

Unfortunately to some extent its true. Its true for all over world software industry as even today projects and success ratio is very low.

In India companies need to invest in learnring and constant development of human resources than just beating bourses expectations and hiring in hordes. In long term its not very healthy and productive.

Other side Indian companies have started taking bigger initiatives and roles and deliverables. Every human being and industry always have a learning curve and Indian companies, human resources are on this curve. Just giving a project here or there does not integrate work force into mainstream and help them look at bigger picture.

So be assured of long term success and healthy realtionships every customer or vendor getting jobs done out of India. Help build best of best IT workforce, as only cost effectiveness isnt healthy and good.

India and China have potential and will Deliver.

Just help them fill those gaps as its everyones future.

Posted by: vijay kurhade at February 10, 2007 04:21 PM

Stop saying lies with out any solid evdience..i think he is an agent from Ukrian company but it will never works in Indian market..soory to say that...Good luck you steave

Posted by: jaisoorya at February 11, 2007 02:10 AM

Learning the correct lession from our mistake or failure is as important as achieving success. Otherwise, don't be surprised to get a similar kind of code delivery from your much boosted of Ukraine team next time.

If Chris has got his project successfully completed after shifting it to Ukraine, because he learnt from his mistakes while outsoursing to India, then probably he will get success in his future projects as well. Otherwise, I would like to warn you that there are poor programmers everywhere.

When it comes to poor code, I would like to say that in my seven years of my programming career I have re-written so many lines of code originally written by other programmers, and most of those programmers were not surprisingly, from the US only. Now, I wont blame that they are having less IQ or EQ, neither I can say they write poor code because of their culture. I think it's more about finding the right skills and then managing your projects well.

Once you have significantly invested in learning how to handle an offshoring project, I hope you will get success in India as well. Else, I would suggest you go for a reputed software vendor who is having prior experience in working in this model. Either the client or the software vendor should have certain level of maturity to work in an offshoring model.

I would like to suggest Chris to try India again with his learnings from outsourcing to Ukraine. Its simply because, India is having such a huge talent pool which no one should ignore.

People who have been able to leverage upon this large pool of talents in time have always been the fortunate ones. The huge success of India as an outsourcing destination says that much louder than the complaints of customers like you.

Posted by: Pranab at February 16, 2007 07:46 AM

Nice to see all the comments. Its indeed a fact that the softwares created in India do maintain inferior quality most of the times. Companies in US/Europe will need get involved in Project Management and maintain better relationship with these Indian companies.

Please note that in some projects more than 100 developers work over a period of 1-2 years to bring out a software, taking it through the different stages of development.

Project Management holds a very strong key and US/Europe companies will need to get involved in day to day affairs of Project Management (After all, they are going to pay for the application and use the software)

Posted by: George at February 21, 2007 04:56 AM

I am sure it was purely fault of Steve management skills. It shows his inability to get things done what he wants...

What is the guarantee that he will not face same situation in Ukraine..

If the requirement is clear enough then it was the responsibility of steve's team to verify and provide sign-Off on each delevirable they made.

Anyway all the best Steve...Hope you will have good time with your Ukraine folks.

Posted by: Jagan at February 21, 2007 02:42 PM

Well, I was in the team 'which did not deliver as per the expectations' as Chris mentions it. What he does not mention is what they did with what product they had and things that they could not decide. First we put up a year making a product named E-pay then they discarded it just like that. Then we invested time and money in making a product webplatform which by the way was done in parallel with team members from Sweden as well (name withheld). So when the delivery was not right it was because the direction from the top mgmt was not at all right. When the cart stops do you whip the cart or whip the ox? As for the claim of poor code quality etc, I throw an open challenge to put that code out in open and let it go thru the code quality tests. We have followed the best of methodologies and the best of XP practices (much more than the parent team in Sweden). This is just his own personal prejudice (just check his history at Novel) coming out in nice words... its always feels good and relives you out of responsibility if you can manage to put the blame squarely on others efficiently...

Posted by: M - A India team member at February 22, 2007 01:27 PM

Steve - I was part of "your" team then. It is not ethical to blame when business drivers change and business decisions are bound to change. The then CEO had a different roadmap aligning to the kind of work under development in India and StreamServe came to India after aquiring that Indian operations. FYI - All the people working who where then in the team are working for ace companies on ace positions at present. Not to mention, StreamServe has two star performers their Indian counterparts. Please accept that business to India was closed because of chnage in business strategy and your self-centered perceptions carried forward from Novell which are not hidden from rest of the world.

Not to mention that Ukraine too is good, probably as good as Indians, may be more, may be less, but since it aligns to your perspectives, all the best to you.

Posted by: mksahni at February 23, 2007 10:04 AM

As an experienced software engineer, I think this illustrated one very importan but often overlooked fact of software projects, which makes software outsourcing just as much a problem to businesses as it is to IT professionals in America.

The corporate world thought it has figured out how to lower IT cost by outsourcing software projects to development shops so that they can concentrate on building their core business. It turns out, things are very different with software. Over 90% of the software created today are custom products specifically designed for particular companies and their unique business models, structures and processes. The business domain knowledge is often more important than the technical skills when building the software. This is particularly true with service-oriented companies. For example, the requirements for a CRM product of AT&T is vastly different from those of Safeway or even Sprint. To successfully complete an IT project that provides a business value, the developers must either have very good knowledge of the proprietary business rules or work closely with those who do.

Having analysts to gather requirements and hand them over to the engineers does not work in reality because the projects are way too complex. Even if the project somehow gets done, the ongoing maintanence such as bug fixes and modifications is a big problem. The lack of in-house knowlege about the inner workings of the software often lead to big losses in financial terms. It's like visiting a different doctor every time you have a cold. You might save some money now if you are lucky enough not to be misdiagnosed, but you are putting your long-term health at risk. This is the reason demestic software vendors like Accenture and IBM often send their developers to work directly on site. Many of these contractors end up staying on one client site for many years and even hired as permenant employees because their domain knowlege is too valuable to the customers. Foreign outsourcers are not able to do this, and thus cannot provide good IT solutions to American businesses regardless of how competent their engineers are.

Posted by: Jordan at February 28, 2007 04:58 PM

In my experience with off shoring new software application development I have never heard of or participated in one that was successful. If the product was actually delivered, they missed delivery dates, the product was incomplete with missed requirements or they were so poorly coded that they were no longer maintainable onshore. This is not a criticism of India, but of all offshore. If you cannot build/deliver new applications on shore, how can you expect to do it off shore?

If you believe in manufacturing software off shore (and I do) you need to look at how China has been successful in delivering hard goods. In that case, there were drawings and actual machinery shipped to China. They did not build the machines or tooling from scratch to manufacture. They initially used the machines and tooling we sent them and then built what they needed.

This is absent in application development we have tried to shift to off shore. We are expecting off shore developers to build something that they have no idea what it is.

U.S., business people are like raccoons and shiny objects. They see a lower cost per development dollar and they have to have it. What they lose sight of is that to manufacture software a world away you should have already be able to do it here.

What they also have lost sight of and fail to take into account is that for every mile the developers is away from the end user the cost of managing the development effort grows exponentially. So, while a developer in India may cost you 25 dollars an hour, the number of management hours more than eats away that economic advantage.

Too many years ago I sold accounting software to small businesses. I went back and studied the results of the automation 12 months later. What I found was that companies that previously maintained good accounting practices did very well. Those firms that never maintained their manual accounting systems properly were out of business. The accounting system magnified either the good or bad practices.

There is a lesson there. Off shore will magnify you best and worst practices.

Posted by: Kevin Berez at March 6, 2007 11:24 AM

I completely agree with the experience documented above. The costs are high. As a project manager managing several off-shore projects, I find myself diving into every aspect of the software design and development cycle, micro-managing the project. Basic elements such as error management, proper user on-screen messages, UI layouts etc are lacking. There are a few talented software folks and the rest lean on these few pricy ones. In the 80s and 90s, software or system engineers spent considerable years as programmers, analysts, designers and testers until they were made senior consultants and architects.

Posted by: Mohan at March 12, 2007 02:46 PM

What i read in the article and the comments is not new, this is a common complaint i have heard working in captive units and now in a product engineering company.

A large part of the problem lies in what kind of career map one provides for engineers and the salary hike associated with it.

Unlike US; where the starting salary of a S/W engineer provides enough for a decent living; in India this number comes only at senior lead/manager level. Therefore there is a haste for people to move up the value chain.

The salary increment per year is aroud 15-20% whereas the rate increase at around 3% per anum. Therefore the only way to keep the cost matching the revenue is to keep the average experience of the team same.

Since the quality of the s/w delivered would be closely linked to the average experience of the team; companies invariably get what they pay for. Due to the above mentoined fact of big hike per year of experience; the cost difference between a company providing average experience of 3 yrs vs 5 yrs can be significant enough not be even considered in the initial negotiation stages.

Failure on delivery can be due to several reasons even after the right team is selected.

The first thing is that are the requirements documented well. Here we have to note that time difference and the lack of the ability to walk upto somebody's room and discuss an issue brings in lot of handicap in developing s/w where requirements are not well documented or being evolved. Having a crisp requirement document is helpful to everybody but the need's not felt compeling enough till you actually find that the project has failed.

After a well documented requirement we have to setup a team with a set of team who are motivated to do the job at hand. I have seen so many times a desire for the company which is outsourcing to have a very high experienced person(s) for a job which can be done with much less skill set. The job at hand is oversold; result is that people join and feel dejected after some time. The team has to be constructed such that each person feels there is something to gain from this engagement. Its common in captive units to hire top people at ming boggling salary and then left with money only to hire 1-2 yrs experience people (at mind boggling salaries again!) but really not create the right structure in terms of experience.

However the biggest problem is the expectations. Most people outsource with soaring expectations. In reality its difficult to achieve 30-40% of the desired producitivity in the first 2-3 months; about 60% for the next 6 months or so and its only after a year that the productivity is at about 80%.

To make it go beyond 80%; lot of planning and thought is required from both sides.

Most companies get really disappointed during the first few months and show it really well too. This creates a negative spiral of morale and productivity. With so many options available outside the barrier to live thru this is low enough. Finally everybody losses.

Cost advantages of outsourcing to India are immense (atleast 50%); but they occur only if you are able to create teams which are made to reach the right productivity level over 1-2 years. I am generally surprised how CEO's of companies fail to compute the cost right; they compare outsource rate with the salaries of their employees completely forgetting to add infrastructure and mgmt overhead.

Working for a company which has development centre in Ukraine; i can definitely vouch for the high experience and cultural fitment to US that country provides. But there too such things have to be taken care of for it work in the long run.

Eventually s/w talent is in shortage world wide and is not restricted to a few countries or cities in those countries. In a flattened world the ability to outsource is a key to success. Ignoring big supply pool like India will only restrict your choices.

Coming years will decide what s/w holds for India. Outsourcing is there right now and slow down will improve the quality signficantly as it would reduce pressure to grow. Further most Indian IT companies have offices everywhere and therfore are best suited to capitalise on the talents available elsewhere. However the next wave seems to be creating products for the Indian market; if this becomes reality then a tipping point would be achieved when the shortage for s/w engineers for outsourcing would become even higher leading to dillution of the price arbitrage advantage outsourcing brings today. What that would lead to would be all of us to see.

Posted by: Jaskaran Singh at March 14, 2007 01:31 AM

Complaints and bashing about outsourcing is not new. As with any industry where human being are involved in all the activities and machines are used simply as tools, there are good and bad experiences. But in case of a failure, it is human nature to get away and put the blame on other.

As an engineer and as a manager my best bet would be to actually analyze the scenario and closely monitor the situation from time to time and try to fix the holes. Drawing a parallel with software development - Just like a white box testing is needed for the software development from time to time, there is a white box testing needed for relationship development too. This white box testing can be in the form of closely monitoring the situation/relationship, quality of delilverables, appreciating the efforts, pat on the back for successful deliveries, showing disappointments for bad ones, kind of response from the both of teams in case of questions, etc from time to time. This time may varies depending upon kind relationship and kind of white box testing you want. But please try to fix the issues on time which saves a nine later.

Biggest challenge in outsourcing is to have proper communication (IM, email, phone, skype) etc and openness in conveying the messages to other side. This is true for both of the parties involved in relationship.

Being fortunate enough to be on both side of relationship at different times in my career, I learnt a lot from the situations. I have seen in most cases both sides starts the relationship with a pre-mindset and level of expectations, but hardly anyone shares that with other at the beginining.

Coming back to basics, we have learnt since our childhood that one of the better ways to resolve a issue in any relationship is to "Speak Up and Discuss", business relationship is no different, other than some usual business constraints.

I have been working in India for over an year now, and when I started the current relationship with a US company, I could easily read the doubts on various faces there. Now they are happy with the relationship.

Posted by: Vipul Jain at March 15, 2007 06:53 AM

Hi,

Iam a provider of outsourcing services to several clients in US and UK in the US 500 - 5000 range. And in a way my experience is exactly opposite of Chris.

I think that there is a tectonic shift-taking place in the sector and that is that the American SMB?? are now unable to afford the Indian software industry. At the enquiry level most of the clients don?? have any idea of what they want. We regularly get queries such as - clone yahoo/monster/youtube, budget US $ 2500.We send a spec sheet before accepting a project, which is always taken lightly by client. At the development level the scope of project is increased considerably. However the funniest thing about the process is that the behavior/communication with us is very aggressive as though they have placed a multimillion-dollar project with IBM.

Like Chris, am equally disillusioned with the outsourcing business have started sacking clients and plan to shift to some other venture soon.

Posted by: vikas at March 26, 2007 01:00 AM

I totally agree with what Vikas says here. We are a bay area-based company with operations/execution unit in India. I run the firm, working with the clients closely and travel back and forth quite extensively. We have some huge successes where our clients reaped hundreds of thousands of dollars in savings, be able to go to market with solutions we have developed, and basically be nothing but totally satisfied. We also have instances where things have gone south. I do detailed analysis every few months to see how we can recetify the negative scenarios and it all boils down to the following:

....Requirements, Requirements, Requirements: When we have client who does not see the value of defining the requirements in detail, that is a deal that is going to doom one day, sooner or later.....

Our tagline is "Locally delivered offshore solutions" - for a smaller sized firm, we take serious effort to connect locally before working on the solution. When the local part goes thru correctly, the project is often a huge success.

Posted by: Annie Prakash at April 9, 2007 01:14 AM

This artical and half of the comments just smell of prejudice, racism and frustation - of the author and his fellow friends' inability to deliver quality themselves, and then pass the blame on Indians!

I have spent a while in the Indian software industry and I certainly know that the quality of code written by the 'the big'- INFY, CTSH, TCS, WIT, SAY is a hundred times better than the trash written by most s/w companies in the authors' country. This comes again from my frustation correcting their substandard code all these long years...

For one, these guys who love to blame the Indians fall behind in skillsets. Two, they demand sky high salaries, and three, when they fail to do a good job themselves they pass on the blame to indians!!! Ridiculous!!!

Posted by: Sourabh at April 11, 2007 01:36 PM

I for India and I for IT.........so don't underestemate us.We are the pillars for the IT industry.There might be problem in 1% cases bur again 99% indian IT componies are providing the best solutios to its clients!!

Posted by: Aditya at April 19, 2007 05:05 AM


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