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India's i-Technology Triangle: Will India Fail?

Give It Time, Strukhoff Says, So That It Won't

To say that many engineers in Silicon Valley are angry about outsourcing to India--and to "insourcing" engineers from India under the H1B non-immigrant visa--is to say that it gets warm in India. Yes, many people are very, very angry, and yes, it gets very, very warm in India.

Beyond these cliches, though, it was interesting for this reporter to find a certain defensiveness among many members of the IT community with whom I spoke during my recent trip there.

"So you guys are here to blame us Indians on taking all of your American jobs, right?" Thus we were greeted by a software engineer in the city of Hyderabad.

It was also interesting to hear the opinions of some of my colleagues whose jobs are not threatened by India but who nevertheless have harsh opinions as to the wisdom of any company working with companies there.

"Whatever you save in labor costs, you'll more than make up for in extra management," a soccer-dad friend and longtime Silicon Valley engineering and marketing executive told me upon my return. "I simply can't see it, I don't think you'll ever get the quality you will need," said a colleague who doubts that the sub-continent will ever deliver something worthy of Western standards.

Another colleague put it more succintly: "India will fail, and any company outsourcing business there will fail."

Well, I don't think so. And I hope I don't sound like a starry-eyed idealist whose pro-globalization stance is clouding my judgement as to the reality of what can be accomplished in India, for India, for the U.S., and for the global IT industry.

I think everyone just needs to be a little more patient. This quality, patience, has never been in long supply among business leaders, pressured for eternal growth and positive quarterly results, whether or not their investors are public or private. The average large-company C-level executive--or entrepreneur of any size company--possesses extreme willfullness and the attention span of  a house cat, in my experience.

Too many things to worry about, too many things to do, no time for thoughtful deliberation when the day-to-day goal is company survival. Business is a tough, proto-Darwinian world, and there's no time to waste on people or processes that don't function with at least 100% of expectation.

Yet a measure of patience is needed for one to understand India and to work with India. Most members of the technology community are familiar with the samurai/farmer duality in Japanese business culture. A company needs both types, placed in the right roles, to survive. Similar dualities exist throughout the global business world--"Mr. Inside/Mr. Outside," front office/back office, good cop/bad cop, strategy/tactics, sales/operations, etc.

Hundreds of such dualities exist, but all come down to raw, impatient aggression vs. stolid, patient execution. Put a "farmer" in a role that needs a "samurai," and you have IBM in the 80s before Lou Gerstner came along, or Apple between John Sculley and the return of Steve Jobs. But, put too many samurai in place and you get the excesses of the dot-com era, where anyone who actually wanted to see a business plan or an org chart, or maybe even a profitibility prediction, just "didn't get it."

Indian IT needs to be eyed with patience. Because it is clear that some companies have been very successful in utilizing the country's IT resources. There are at least three multi-billion dollar India-based IT companies--TCS, Wipro, and InfoSys--who have emerged in these still-early years of the India IT boom. There are many other companies who are striving to reach this status. In Hyderabad, there is a commercial and residential building boom that rivals Silicon Valley during its highest growth years, replete with new hillside mansions dotting the landscape.

This success is said to come mostly from so-called "back office" IT. System maintenance, much routine coding that can be done at a fraction of the price compared to the U.S. or Western Europe, and a lot of processes not considered to be mission-critical. The country hardly seems embarrassed by this sort of success, with local newspapers continuing to tout outsourcing as a source of national pride.

Yet one executive we met said on camera for us that about half of India's IT industry was based on more creative coding and application development and will earn higher shares of the overall industry in the years ahead. He is looking to the days when India will be a full-fledged software giant that can compare itself favorably to the U.S.

Meanwhile, this is a country of more than 1 billion people that seemingly doesn't think it has a population problem, a country with millions of people living on the street in its largest city Mumbai, and a country characterized by an ingrained  command-and-control culture that can drive Westerners mad with its endless bureaucratic procedures and uncomprehending stares from rank-and-file employees confronted with a question or problem to solve that has not been specifically detailed in the instruction manual.

It takes patience to get through customs in India. It takes enormous patience to ride in its traffic, let alone drive in it. It takes patience to get served a meal--the classier the restaurant, the slower the service, it seems. None of these observations is original, and they can make the writer come off as yet another imperialistic, condescending Westerner doing his best at noblesse oblige.

Yet these observations are true enough, and they extend to software development, where it takes patience to get an Indian company to deliver the precise software solution you've requested, and yes, in the early stages you will spend more overall, when considering management time, than you would have had you simply done the project at "home" as you did in the old days.

But if you set up a realistic timeframe, one that has a bit more patience built into it than your company's normal timeframe, and deliver the specific instructions to your new India-based partners-in-arms, you'll find an earnest, well-educated workforce that aims to please and that takes great pride in doing its part to lift this country from its failed "Third Way" policies of the past into the top ranks of global economies.

India's GDP measured on the basis of local buying power, is not among the top five or six in the world. This did not happen through development of uniformly crappy products.

Fear of negative media coverage and workforce backlash may cause major companies such as Oracle and Microsoft to downplay their recent hirings in India. But go to Hyderabad, for example, and you will witness real construction, real software development centers, and real benefits being derived for U.S. companies.

India's recent GDP growth happened because enough companies were patient enough to sow the metaphorical garden, give it enough metaphorical water (and literally enough sub-continent sunshine), and reap a harvest that was produced more efficiently than it would have been back in the U.S. India IT companies are contributing in a positive way to recent IT industry profitibility, even if stock prices do not yet clearly reflect these contributions.

I am, for better or worse, old enough to remember when Made In Japan meant "cheap." But the "cheap" phase was only one step in that country's long journey to establishing itself as the not-so-cheap world quality leader. Despite its recent decade-long economic slump, Japan remains at or near the top of the world in terms of quality of its products and worldwide recognition of that quality.

Some people will say that India has too much diversity, too many problems, too many badly ingrained habits, etc. to become another Japan. The notion is laughable, some will argue. OK, so I won't argue that India will become the precise equivalent of Japan, whether in my lifeitme or ever.

I do think, though, that the country is on the road to becoming much more than a simple outsourcing backwater, and that Americans threatened by its workforce need to focus on how they can provide homegrown quality and efficiency that stays ahead of this emerging competitor. India will not fail, even though many of us may fail to understand why.


More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

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Most Recent Comments
Mitch 11/22/05 01:35:22 PM EST

The main problems I experimented working with offshore shops in India where
1. Poor Quality
2. Meeting Deadlines
3. Lack of understanding (language barrier and probably lack of brains or experience)
4. Poor Documentation

Did I mention the poor quality ?

Basically the pilot projects were unusable and done after 2 months...The quality was horible. The feeling was that they were using the project to train themselves in the used technology. That's the main problem and I quite don't get it, the IT companies in US are basically paying them to do the projects but they are training on the project. I would have my hat off if they would be SME but they ain't...and all that is happening at our expense(layoffs,salary cuts, extra hours burned to fix code, etc)

My couple of cents...
Mitch

ib 11/05/05 02:36:52 PM EST

What half-ass thinking is this? Oh yeah.. the one that has school, fire departments, and police stations loosing funding across the country. If outsourcing is so great for a country's economy, why doesn't India outsource the work given to them to someone else?

If my company tell me that I need to finish a certain project in a month, but the Indian outsource doesn't cut it; we, as responsible developers, need to fix their code to make it work. That means burning out the employees in the states with overtime that is not paid. At my company we let go of several outsources, because the development team wrote documentation, showing the quality/quantity vs gains of using outsourcing. The other problem is that people is suppose to have a brain in their heads. If I give you a task, and something isn't specified to the most minuscule detail, or some problem occurs... use your f%$#ing brain..!!!

Why don't we just create internships and get college students to do this work, for a minimum fee, while they get experience. They'll do a much better job than the Indian counterparts. And for you to say that is only support work, is ass-inade..!!! American companies are sending new work as well as research. What's going to happen years from now when we loose our technical edge??? Maybe we should all open all-you-can-eat Indian restaurants, and become a Third World country ourselves.

The other thing I found demoralizing is that companies in the US don't want their employees to telecommute, but they can outsource work on the other side of the world. How much money will companies save if they can reduce their office space?

Another thing that I have notice. Indians in the US have a MUCH different work ethic than their counterparts in Indian. Indians in the US can use their brains when confronted with an unknown, their counterparts CAN'T..!!!

I'm a foreigner, I'm a US citizen, and I pay taxes in this country just like everyone else. If you want an American job, pay American taxes. If you want an American job, come to America. If the companies in the US want to save a buck, so their CEO's can have more gas for their boats; send the message: you hire people in America, or take your company the f$#@ out of here.

Why don't we outsource VP's and CEO's??? Their Indian counterparts should be able to do the same job... after all is just a bunch of dumb-ass MBA's.

ib 11/05/05 02:35:38 PM EST

What half-ass thinking is this? Oh yeah.. the one that has school, fire departments, and police stations loosing funding across the country. If outsourcing is so great for a country's economy, why doesn't India outsource the work given to them to someone else?

If my company tell me that I need to finish a certain project in a month, but the Indian outsource doesn't cut it; we, as responsible developers, need to fix their code to make it work. That means burning out the employees in the states with overtime that is not paid. At my company we let go of several outsources, because the development team wrote documentation, showing the quality/quantity vs gains of using outsourcing. The other problem is that people is suppose to have a brain in their heads. If I give you a task, and something isn't specified to the most minuscule detail, or some problem occurs... use your f%$#ing brain..!!!

Why don't we just create internships and get college students to do this work, for a minimum fee, while they get experience. They'll do a much better job than the Indian counterparts. And for you to say that is only support work, is ass-inade..!!! American companies are sending new work as well as research. What's going to happen years from now when we loose our technical edge??? Maybe we should all open all-you-can-eat Indian restaurants, and become a Third World country ourselves.

The other thing I found demoralizing is that companies in the US don't want their employees to telecommute, but they can outsource work on the other side of the world. How much money will companies save if they can reduce their office space?

Another thing that I have notice. Indians in the US have a MUCH different work ethic than their counterparts in Indian. Indians in the US can use their brains when confronted with an unknown, their counterparts CAN'T..!!!

I'm a foreigner, I'm a US citizen, and I pay taxes in this country just like everyone else. If you want an American job, pay American taxes. If you want an American job, come to America. If the companies in the US want to save a buck, so their CEO's can have more gas for their boats; send the message: you hire people in America, or take your company the f$#@ out of here.

Why don't we outsource VP's and CEO's??? Their Indian counterparts should be able to do the same job... after all is just a bunch of dumb-ass MBA's.

saj 10/18/05 11:10:37 AM EDT

The crux of this article seems to be that we should stop the forward momentum in development practices and revert to failing past practices in order to take advantage of cheap Indian labor. That is, forget the agile, iterative practices that are consistently proving to be superior and revert to waterfall so the Indian IT companies can produce the same failing projects which we in America did for years using Waterfall. The article indicates that we must have patience and deliver exacting specifications with greater timelines in order to achieve success with Indian outsourcing. Yet study after study has shown that there really is no such thing as absolute requirements specifications prior to development. Certainly waterfall continues in the US - it also continues to fail. The answer, at least in part, to the cost of IT is to continue moving away from development practices which are 30+ years old and proven inferior, failure prone far more costly. To export these old approaches (with more time alloted than would be here) simply exports that construction of the same failed systems that waterfall has been generating all along.

The author implies that exporting to Indian IT companies is the only solution to high US IT cost. Apparently the author isn't well versed in current development practices. He discusses the problem of cost to US companies - but never mentions the US work force. Unemployment is also costly to US companies - demand declines and thus price and output. He also doesn't even consider the apparent contradiction between outsourcing and H1B visas - ie. if it's so much cheaper and better for US companies to utilize Indian IT firms, why is there still a need to import the labor to the US - if the individual is already in India then it seems an unnecessary expense to issue and H1B to import that person to the US - why not just utilize the individual in India?

Overall, the point seems to be we should accept poor quality product produced with antique failing methods which take longer to build in exchange for short-term profit and, of course, our number one goal of helping India to succeed. I have no issue with India succeeding, unless it comes at the cost of US success. The author seems to be promoting what, to my mind, is extremely short-sighted thinking with longer term negative results. Don't find fault with the mindset that emphasizes short-term profitability and share prices at the expense of long term growth and success - just deal with it by outsourcing it. Unfortunately the problems remain.

jgo 10/16/05 03:12:08 PM EDT

http://fr.sys-con.com/read/141528.htm

So, where is Roger Strukhoff's demand for tech executives to be more patient with US (and UK, and DE) tech job applicants?

Where is his call for more relocation packages?
Where is his call for more new-hire training?
Where is his call for cross-training current tech employees rather than turn to body shopping?

Alain Bergeron 10/16/05 12:16:54 PM EDT

I think that India will succeed at some point but the fears that It jobs will disappear is overblown.

Companies developing on a waterfall approach basis will certainly gain in going in India. These projects are usually out of cost based on the inefficiency of the method but at a fraction of a cost, well you simply double the time of project and it'll finally be delivered. Double the cost of an Indian programmer and you are still far from the Cost in North America.

The bad thing is that many managers have problems with iterative development since they don't understand it (are you surprised!). So many projects will still be done in a waterfall mode and India seems to be a good option.

But for those companies that have already migrated to iterative development (agile, Test driven,...), first iterative is hardly exportable to India and second, the cost of the project are so much lower (and I don't mention here the client satisfaction), that they will come close to waterfall cost in India but delivered much faster.

Finally, for sure, companies with a product like Microsoft, Sun, Oracle will probably end up doing most of their development in India since the product they build is not related at all to client interaction.
Regards,
Alain

SYS-CON Brazil News Desk 10/16/05 12:03:16 PM EDT

India's i-Technology Triangle: Will India Fail?
SYS-CON West Coast Bureau Chief recently spent some time in India, talking to developers and writers in several cities about the recent growth of the country's IT outsourcing industry and whether that industry will continue to grow and prosper in coming years.

SYS-CON Australia News Desk 10/16/05 11:44:11 AM EDT

India's i-Technology Triangle: Will India Fail? SYS-CON West Coast Bureau Chief recently spent some time in India, talking to developers and writers in several cities about the recent growth of the country's IT outsourcing industry and whether that industry will continue to grow and prosper in coming years.

SYS-CON India News Desk 10/16/05 11:26:16 AM EDT

India's i-Technology Triangle: Will India Fail? SYS-CON West Coast Bureau Chief recently spent some time in India, talking to developers and writers in several cities about the recent growth of the country's IT outsourcing industry and whether that industry will continue to grow and prosper in coming years.

Yakov 10/16/05 08:44:48 AM EDT

Roger,

You are saying that we need to be patient with India. It's almost similar to saying that we need to be patient in Iraq while our kids die there daily.
While we're waiting when outsourcing will really work, this patience unbalances the US econmomy and makes the IT unattractive to our kids as a career.