What Do You Do When Outsourcing Goes Bad? 751
Xphox wonders: "Recently we have been referred to an outsourcing company to finish customization on a script that the author had no time to complete. Everything was going fine until recently. At what point do you consider they may have just ripped you off, and how do you know when to file complaints and withhold payment?"
"I have been working with what I thought was a reputable outsourcing company, referred to me by the author of the software package. We agreed that payment would be made once everything was completed. After a few missed deadlines, the project finally seemed to be finished. The only thing left was a small bug fix, and an install script which needed to be completed. As agreed, he delivered the install script, and we made the final payment. Upon testing the new install script we noticed things did not work as intended, and all attempts to contact the outsourcing company has resulted in the following answer:My fear is that if I don't act now, I will not be able to recover any funds, and will be stuck with a product that is useless. It has been 9 days since I've received an email from them, and I'm starting to think I've just been taken advantage of. Since the script is protected with Source Guardian, I am unable to finish the modifications myself."'My guys are still working on it.'
Rule #1 when you pay someone to code for you... (Score:5, Insightful)
Lying (Score:2, Insightful)
I usually let that happen twice before I call them out on it.
Re:Simple test here: (Score:5, Insightful)
Is this really necessary? (Score:3, Insightful)
You get what you pay for (Score:5, Insightful)
Where is the contract? Whose laws govern it?
You went with a company outside of your country to do a deal..
Why didn't you test what you got first and then pay for it...
I smell FUD... no details here, is this just an anti outsourcing fable?
Source Guardian??? (Score:3, Insightful)
Life's lessons (Score:5, Insightful)
You made payment BEFORE you ran formal acceptance testing of the application (yes, including the installer). That was your fatal error. Once you've ponied up the bucks, you've lost all leverage short of a lawsuit.
If I were you, I'd email then and request a specific timeline/deadline for completing the work. Make sure your email contains language stating that what they delivered does not meet their obligations. Assuming they respond similarly (i.e. "we're working on it"), then at least you have some level of proof that they acknowledge that they are potentially breaching the contract you have. Then take their asses to court.
Good luck. Next time remember
- formal requirements
- explicit deliverables (see requirements above)
- formal acceptance test to ensure that the software actually meets requirements
Re:Simple test here: (Score:1, Insightful)
Re:Serves you right (Score:0, Insightful)
What makes you think he didn't buy American? Oh... I know, you have no idea what "outsourcing" means.
Why start now? (Score:1, Insightful)
Of course, hit men are probably his only option at this point. One of my old companies got screwed over by an outsource contract, too, and basically there was nothing we could do about it even though they were obviously at fault. Good luck coming into India as a foreign firm and having any sort of luck in the legal system -- in my experience, it's so blatently biased and corrupt it's pathetic.
But hey! They had three (fictitious) programmers working for what it would have cost to hire one (real) programmer in the US!
Bwah ! ha haha ah aha ahhahahah! (Score:0, Insightful)
What I do... (Score:4, Insightful)
Worse possible math EVER. (Score:3, Insightful)
100,000 $ = 100 india engs. 1 ie = 1,000 $
200,000 $ = 200 engineers. 1 eng = 1,000 $
each eng here will survive with the same salary as in India? I think not. The manager will get 50,000 $ in bonuses, and the VP the other 150,000 $. everyone wins, if by everyone you mean the PHB and the VP. ah, and the stockholders won't see a dime, too.
Re:I know what _I'm_ doing. (Score:2, Insightful)
I am COMPLETELY against offshoring, but outsourcing is OK. Outsourcing just means you are contracting a company to do something for you. Now personally, I thing this is a bad idea in MANY situations where it is overused, because you lose a level of control when you outsource to someone else. You should expect lower quality. In some instances though, it does pay to have someone else do it rather than build your own infrastructure.
Now Offshoring means you are getting cheap/slave labor from outside the country. I don't condone this at all. At least the money for outsourcing stays local/national, instead of going overseas to a country with poor labor laws.
Re:Hell, itll bite you. (Score:2, Insightful)
Never lie to your boss - it's always better to admit you made a mistake then fix it.
Re:Simple test here: (Score:4, Insightful)
And I hate it when people accept the notion of free market and competition only when they are on the winning side.
Re:Hire domestic programmers next time (Score:2, Insightful)
-1 Assumption
Re:Simple test here: (Score:1, Insightful)
3 letters known to management... (Score:3, Insightful)
I think the outsourcing epidemic is abating because of the backlash to the off-shoring. The two are different but have become synonymous. I think both are a trend in which companies experimented and won and lost. It works for smaller companies who can't afford their own IT department so they can hire a company to provide a level of service they cannot match themselves. Conversely, it might be considered a step down for a fortune 500 company to look to a start-up company to handle their enterprise level needs. I might be generalizing a bit, but it works for some things but not others. For example, Janitorial staff might work but IT desktop support probably might be a bit more difficult. I think the outsourcing option might not be on the table when/if the economy improves.
Re:Hell, itll bite you. (Score:4, Insightful)
Re:Simple test here: (Score:2, Insightful)
I've yet to see any foreign company turn out code better than an American development team. They're cheaper, not better.
Re:Hell, itll bite you. (Score:4, Insightful)
Never let social pressure or the unpleasantness of being the bearer of bad news stop the flow of information in your organization. If, out of loyalty and dedication to your people you work overtime for a week and get it working, you have to let them know, or they won't be able to be loyal back to you in return.
It also stops the Russian firm from realizing that they aren't giving out a good enough product to stay in business, and screws them over too.
Basically, letting information stop with you instead of passing it on damages the whole capitalist system in the long term, and you should only do it if you like being poor and unemployed.
Re:Simple test here: (Score:2, Insightful)
The Free Market is only a good idea when it is also a Fair Market. In the case of outsourcing to India, this is simply not true. American coders are faced with competition from people with access to equal education (fair so far), and a far, far lower average cost of living (unfair). So, it costs far more to support an American coder than an Indian one. This would be like forcing Joe's Hombrew Electronics to compete with Dell when Dell gets their components at a 75% discount, and Windows for free.
OUTSOURCING != OFFSHORING (Score:4, Insightful)
there are a lot of companies that need programming work done from time to time but don't see the need to pay dedicated programmers full time salaries. there are also companies that have dedicated programmers, but occasionally have more work at one time than their in house staff can handle. i've done work for both types of companies before- sometimes they were located only blocks away from me.
anyway, that being said, if you had a contract, and it specified that you wouldn't pay until the work was complete, you should first try and stop payment with your bank if it's not too late. if it is too late, i would get a lawyer on retainer, and notify the firm of that fact. sometimes just knowing that will be enough to get them to cooperate with you. if not, then you've already taken the first step towards either getting your working product or getting your money back.
and it may be too late now, but for future reference, never sign a contract that doesn't give you the source code. now, even if you resolve this issue with your provider, you are stuck going back to them for any future modifications....
What else do we do? (Score:5, Insightful)
Thing is with American middle class losing thier jobs who will buy Overpriced American products ( they stay overpriced because the CEO's must still make Multi-Multi million dollar pay checks)
I don't see Indian Programmers making $5K a year standing in line to buy $2000.00 MayTag fridges and $30,0000 ford/Chevy/dodge SUV's
We are already seeing the short sightedness of all this Look at the stock market it is contiually weak, in spite of the fact that we have been in a 'recovery' for 3 years. Why, because consumer demand isn't as strong. Well when you are destroying good jobs and replacing them with lowing paying jobs, people are not rushing out to buy non-essential crap. Add rising health insurance rates which no one in the US wants to do anything about.
If the Indians think they are so great now, just wait, there is No great love for them here in the States, As soon as the Chinese or Africans or whomever can do the job cheaper, the Indians will be left with a bunch of vacant Call Center/Tech Centers and rising unemployed middle class. What will they do then, Nothing they have nothing to sell anyone wants other than the fact they were cheaper, for a while. To boot they will have left behind some major bad will on the part of the American public....
All the 'Free Market' fans here (everyone is free market till they lose thier job, house etc....) will be on the Chinese/African
There is No such thing as a free lunch or a free market someone has to pay......
Re:Unfortunately the parent option... (Score:5, Insightful)
just write a nice letter to the chinese embassy / chinese law enforcement, that a company you were working with turned out to be a front for a pro-democracy revolutionary group, falun gong, or pro-taiwan-independence movement or something.
i've gotten chinese spammers shut down this way, when they laughed at me. they aren't laughing anymore.
AskSlashdot is your first clue (Score:3, Insightful)
Wait... maybe thinking to turn to SlashDot for answers is your first clue that something is wrong with your management strategy.
Re:Simple test here: (Score:5, Insightful)
He said they're moving out of China soon.
Why?
Because the labor (these are specialized workers) is too expensive. That's right, China is too expensive.
It's true that the wage that the Chinese engineers are asking for has gone up. But that's a natural factor of supply and demand. Eventually, they are going to actual start demanding to be paid what they're worth to the company. However, their wage is still significantly lower than the one that the US engineers received way before the outsourcing occurred. So assuming that all other parts of the equation are the same, the company is still making more profit after *salary* (excluding other expenses) than it did when it wasn't outsourcing at all.
Nonetheless, this company is going to move to another country where the workers can be paid significantly less, thus maintaining their huge post-salary profit margin (again, discounting expenses in other areas).
Why are the doing this?
Because globalization has made it significantly easier to do so.
Because of globalization, it's now possible to start up a working factory, shop, or headquarters pretty much anywhere in the world. This means that you can specifically target the most impoverished countries, countries where the average person makes a 10th, 100th, or 1000th of what an American might, and set those people to work.
Now, in a non-growth system, where companies maintained their size and scope, companies would be able to hop back and forth between countries at whim. Whenever country A became too expensive, they'd simply move to country B until it became too expensive, then hop back to country A (now desperate for work).
However, capitalism cannot exist without constant growth. So, one side effect of this global offsourcing behavior is that as the salaries grow for the workers, so do their spending habits. They then, in turn, cause growth in their country's economy and increase demand for supplies and services, forcing the businesses to hire more workers to supply this demand.
As a result, eventually there will be no country where the workers haven't gone through this process, so there will be no place to turn to for "cheaper" labor. This, of course, assumes consistent growth.
Of course, this does pose a problem: currently, we're using up resources on a grand scale. And if our population growth continues as the average consumption of individuals go up, we may end up seeing a problem with a shortage of resources. This will cause prices for items to go up, which means that the increased salaries will have decreased worth (this is pretty much the case now in the US: you can live like a king in Beijing on $20,000 but in New York you'd barely be scraping by).
Therefore, only those with salaries at a higher order of magnetude will still live comfortably. In other words, CEOs and other financial elite. So, the gap between the wealthy and non-wealthy will continue to grow.
So, I do think that people who point to offshoring as being a tool to benefit those at the top are pretty much dead on.
Re:Firsthand experience (Score:2, Insightful)
We cover 16 European languages, so obviously fulfil an outsourcing requirement American companies couldn't hope to do in house. Nothing to complain about there.
We also outsource support work, first in English to a web-based (like Siebel or RightNow) support centre in Karachi.
They are cheap and pretty good. Their RPA (responses to solve an assigned incident) is around 1.5, about the same as US-based teams or our own European teams. They do close about 10% less incidents on the first response (FCRR) than the Americans or Europeans though.
This is about half due to them not being native English speakers and either misunderstanding at first or being misunderstood, and half due to them persisting in doing 'shotgun' initial posts, giving one likely fix and a few others, and thus confusing some customers.
The main thing is you cannot hint, or suggest, or tell. You have to ask; if you've got a good suggestion they will embrace it, they will accept one they don;t agree with, but tell them to do something without consultation and they are a little insulted.
Also, actually SHOWING you are annoyed is sometime the only way to get your point over; they're a more emotive and dramatic culture. Being all off-hand and English sometimes goes over their heads.
They crap over a Latin American team run by the client from a great height. I really like the people I work with.
The European side of the business is far more easy about having a Pakistani support centre doing work for them. Some of the attitudes on the American side of the company are a little less relaxed. South Pakistan is actually comparatively cosmopolitan compared to the tribal north; most people living there moved from India during partiton, so it's a mixed society with no single and ultra-"orthodox" tribal view holding sway; one of the techs is a woman.
The US head office insist on the Pakistani techs using 'European' names. I'm sorry, but if someone has a problem with having a problem solved by Iqbal Abdul, then they can take their bigoted ass to the FAQ's. Funny thing is, just like Taiwanese people can have really whacked-out ideas of what an English name is when they choose one (Ceiling Fan, I shit-you-not, and Euphoria Wu. Seven and Golden were really popular too), so too are Pakistanis ideas of European names rather droll. Paul George, Martian Nighcolls (sic) etc..
I think this is insulting, and in fact another American client with a vastly more complicated product uses a massive phone support centre in India and the agents use their own names.
The idea of a customer getting racist or abusive to one of the Indian staff is something that makes fire come out the boss of the US company's support department, so different companies/indivduals have different views.
I grew up in a really cosmopolitan part of London, and really am not bothered by dealing with the guy who runs the place, and is _really_ Muslim. Of course, he hates the bad guys just like everyone else. They write really old-fashioned courteous English, and sometimes US customers take offence because of it.
Recently the company closed a US phone support centre and outsourced their US phone support to Canada. We couldn't compete with the price (using an Irish partner to take the calls).
We had a bad time setting up a partnership with a centre in the former Yugoslavia, but now have a pilot going well in Roumania for the 'big five' European languages.
Invariably most current volumes of support calls will be there within two years. In Holland we shall just support still more high-tech products; a consumer multimedia program is a tad simpler than administering network security. So staff will go but be replaced by more skilled, better-paid jobs.
In effect the shittier jobs will go to people in other countries who think the
no sympathy (Score:3, Insightful)
(a) the person(s) who did the referring should be notified, so that they don't try referring other projects into the same fate.
(b) if you paid the original author the money that you spent on outsourcing, he probably would have *found* the time to complete it. One likely scenario is that the original author got annoyed with you or your company management and just plain left.
(c) why on earth would you have allowed it to be shrouded/obfuscated? work for hire should be delivered in source form.
(d) you specifically called it a script not a program. this gives (me at least) the feeling that it wasn't a very ambitious or important project, more like a proof-of-concept that got blown out of proportion. if it was intended to serve a real business need, it should have been taken more seriously.
(e) it's sounds like you're less interested in getting the script to work than you are in getting your company's money back. the thing is, the lawyers will charge $250/hour, so it's probably best to just chalk it up to experience, let your manager chew you out for screwing it up, and accept the lessons life has taught you.
Re:The problem with your doom and gloom (Score:3, Insightful)
Sometimes there just isn't an alternative to be found.
Re:3 letters known to management... (Score:3, Insightful)
The 3 letters that management are just now starting to understand are : TCO.
I think another 3 letters the original poster's managers could stand to learn about would be CYA, as in the non-existing contingencies for nonperformance section of the so-called contract they signed with that dodgy outsourcing firm. Doesn't seem to be much CYA going on in the original poster's company, let alone the subtleties of TCO.
Re:Unfortunately the parent option... (Score:3, Insightful)
Wow, you're right... getting a brutal dictatorship to torture and kill people who send you unwanted emails is *awesome!*
asshat.
Re:Rule #1 when you pay someone to code for you... (Score:2, Insightful)
I thought Rule #1 was to first establish what requirements needed to be met to actually say "its done" to prevent exactly what's happened to this guy.
That way there is no argument over any money issues or finished product. If its meets a list of requirements, you get the software, they get paid, if it doesn't, they don't get paid, but I guess you don't get a product either.
"Tested and Delivered" - ROTFL!! (Score:2, Insightful)
I resigned shortly after this happened.
My opinion is that if you are going to hire an outsourcing group, you must have both a contract negotiator and a project manager who know the tricks of outsourcing groups. Otherwise, save yourself a lot of aggravation and just flush the money down the toilet.
Re:Unfortunately the parent option... (Score:3, Insightful)
you joke... but how long until that becomes a viable way of dealing with undesirable people... the same way it is in China.
Re:What else do we do? (Score:1, Insightful)
Still, the underlying racism is unpleasant. I commend the above authors on their self-confidence, but there's nearly a billion Indians, and for them to think that they are superior coders/managers/widget washers to every single one of them makes the word arrogant seem inadequet.
I feel for anyone who has lost their job, but unless you are the kind of patriot who would happily spend 3 or 4 times over the odds just to buy locally made, how can you expect your employer to do the same?
The other side of the coin is that you almost certainly don't need the job as badly as India (or whereever) does. Compared to even a middle class indian, you live like a king. Unless you've experienced Indian living conditions first hand, you have no idea of the disparity. I'm not saying you shouldn't have a good quality of life. I am saying Indian's deserve a good quality of life too - and every dollar they earn is going to make a bigger difference to them, their communities, and their country, than every $10 you earn will make to you.
As an American, you are born with so many more advantages than any Indian - so many its almost impossible to comprehend. When was the last time you saw 20 Americans sitting in 105+degree sun smashing rocks with a hand hammer to make road base because their labour was cheaper than a machine, and they needed the handful of rupees a day they were paid to survive? Just because they have started competing with you in your chosen profession is no cause for resentment or despair. You can make more money than your 'replacement' flipping burgers, and I'm sure there are better options available to you.
If you want to blame someone, blame your government for not creating a stronger economy and for letting the workforce slip into obsolescence. The India/China thing has been on the radar for years. Everyone who hasn't been in a coma has had the opportunity to diversify and protect their superior quality of life. Blaming foreigners is ugly.
Re:My helpful suggestion (Score:3, Insightful)
The IT industry is suffering because of bad decisions like yours, and if you haven't figured out by now that outsourcing offshore is more costly in the long term when things go wrong, then tuff.
Spare me your indignation. You handed a project to someone that you didn't know, and I bet you didn't do a contract (of any kind) either. Of course you'd be hard pressed to deal with the company in an American court anyhow. You didn't stipulate that you wanted the source, and so now you've realised that your leaned over a table. You didn't hire a good tester either. Essentially your cheap and nasty job has come back to haunt you.
Well, had you employed someone who knew what they were doing, even to manage the project, you wouldn't be in this position. Next time, contract someone to manage the project properly. If it's important enought to want it, it's important enough to hire someone to do it properly in your own country.
Good luck with your Hindi lessons. Until clutzs like you figure it out, our industry will just have to struggle on. But we'll be happy to overcharge you when you return to Western programmers.
Your Indian company will probably get around to finishing the job - but if they don't, bad luck.
Re:What else do we do? (Score:2, Insightful)
For an Indian to pay for the same health care, same education, same clean streets, same safety etc. it would take the about the same amount of US$, and even then they best they can do is create an oasis of comfort in a sea of poverty. This can be seen by looking at the hotels. The cheap ones are definately cheap - less than US$1 /day, and it shows. If you want to stay in India at the same quality as your US Best Western, it will cost you about the same as in the US. Its very expensive to provide 1st world amenities in a 2nd/3rd world country.
> At the best the loss of my job helps my Indian counterpart to an
> extent equal to my loss.
Even if this were true (its not), India needs more help than the US. When Indians clog their city streets with SUVs because they want the freedom to go offroad oneday maybe, instead of the lucky ones transporting their entire family on a 50cc step through, then the US will have an equal claim.
Its understandable that someone who hasn't been to India might begrudge losing their job to an Indian, but if you take the time to go to India and see for yourself the difference in quality of life, you will be amazed at the reactions from locals who just cannot fathom being so wealthy as to be able to throw away such a fortune on a holiday! The amazing thing is, for the cost of a few month rent, you can fly to India and live like an Indian for months. I highly recommend it.
Re:Hell, itll bite you. (Score:2, Insightful)
if they could rewrite it in one week, they could have written it in 2-4 weeks
so why outsource ? i don't believe that you can outsource a project and get a final result in 1-3 weeks... so it makes NO sense
i think that you are telling a story which is not yours, and which you don't understand