Trading Places with Indian Outsourcers

99 Comments

What happens when a successful US-based computer programmer, who lost his lucrative job to outsourcing, travels to India to try to get it back?

Will he discover the secret of India’s success, or that sending jobs overseas is an unstable gamble?

The videos below share his incredible experience. It’s a fascinating and humanizing portrait of real Indians in Bangalore, the “Silicon Valley of India”.

This inside look shows how ridiculous it is to throw around terms like “slave labor” and “stealing jobs” without understanding the realities of this unusual world where best jobs start at 6pm and end at 3am…

Three suggestions:

1. Keep in mind which jobs are displacing foreign workers and which are not.
2. Notice the level of complaining among Indian workers. It’s almost non-existent.
3. Give the videos a minute to load. Patience, young Jedi.

This is hard-to-find coverage that will change how you think about “your” job. Highly recommended.

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99 comments on “Trading Places with Indian Outsourcers

  1. A company sends work to subcontractors when it’s more cost effective than doing the work in-house. Specializing reduces costs. No one can specialize in everything, so they subcontract.

    Let’s assume that ‘outsourcing’ means subcontracting regardless of the geographic relationship of the two parties. Now let’s talk about software development.

    The root cause of quality issues in software development is the quality of communication. This is true in manufacturing as well, but it’s been addressed in the design language.

    My empirical observation: Time zones erode the quality of communication.

    I’ve managed software development with distributed teams across three continents. I’ve managed development split between the US east and west coasts. I’ve managed development with everyone, technical and business, in one room.

    What I’ve observed is this: the more time zones between team members, the lower the quality and quantity of code produced per unit of time.

    Why? There is no rigorous engineering language that applies to software development.

    Proof? Boeing Aerospace has parts made all over the world. The same part can be made in any country because the blue prints and specifications are identical. Further, the quality tests are the same everywhere. (I worked as a toolmaker in aerospace prior to IT.) Ditto for silicon chip manufacturing.

    There is no comparable language for software development. And there may never be. The joke among programmers is by the time you write a specification that’s unambiguous, the program could have been written, tested, revised, and in production.

    My development team split between the east and west coast had a tricky problem that went unsolved for weeks in spite of numerous calls and emails. The solution occurred after a few hours in front of a white board once I flew everyone to the same site. All were native American English speakers and talented programmers. Phone technology and time zones got in the way of understanding.

    Time zones work against you. When you add Hindi English, offshore management styles that hark back to the 1950s auto industry, phone latency, and (most important IMHP) no long tradition of software engineering culture, the communication problems are compounded.

    BTW, when I brought some senior talent from New Deli to Florida to finish up requirements and knowledge transfer, I observed a similar acceleration of problem solving to the native speakers mentioned above. Not as much, of course, but similar.

    Cheers to all of you,
    Wayne

  2. @Wayne. You’ve got to be kidding by using Boeing as an example of an engineering outsourcing success. Google “outsourcing disaster boeing” and learn that outsourcing 70% of the parts for the new 787 “Dreamliner” was an unmittigated disaster because of the very Time Zone formula you mention for software applied to hardware as well.

    Another sobering thing to consider is that, as the engineering outsourcing strategy DOES begin to work, it will mean that Boeing and other companies can proudly be the “assemblers” (or as an “integrator” of parts made elsewhere, as Boeing says even now.) That leaves the head office further and further detached form the REAL engineering decisions, eventually leaving it in simply a managerial role. And at that point, what’s the rationale for it staying an American company at all?

    A Boeing engineer said in a news story: “Boeing developed much of the materials, manufacturing processes, tooling, tolerances and allowances, and other design features, which are then transferred to suppliers in Japan, Italy and elsewhere. Over time, institutional learning and forgetting will put the suppliers in control of the critical body of knowledge, and Boeing will steadily lose touch with key technical expertise.”

    For some, all this is academic, but for others, it highlights the suicidal nature of willy-nilly outsourcing of high-paying jobs from a pure greed motive. The CEOs had better understand that once the high-paying US jobs are gone, their future as over-paid CEO/managers will be going overseas too, as foreign companies simply demand more seats on the board of companies they will virtually (or literally) own anyway.

  3. “You wiill fail the test. its a curse because you didn’t get me my cup of tea.” ahahaha. Funny… But serious. Sucks for a role to be imposed on anyone, be it a man or woman.

    My views: I like the concept of the documentary. However, I don’t like the Chris’s negativity. Life is different in different places. Whether the place is dirty, whether the place is hard… The question thats important is are the people happy to a certain extent/ are they content. I think so. The problem with foreigners is that they look at a culture through a lens shaped by their own culture. To get a good understanding one must view things from that cultures point of view.


    interestedguy

  4. Very, very thought-provoking and interesting – I had an idea what it was like, but now know a lot more.

    I agree with people’s comments about competition – it is all about value – cost vs efficiency and skill and experience. If you can see the value of out sourcing, and you get that value, then do it. It’s a connected world that never, ever stops.

  5. Tim, that one is a good one. I am trying to deviate from the materialistic view of this vids.

    There is a saying here in India, meaning be happy with what you have.

    “When you worry about your lost pair of slippers, remember there are people out there who don’t even have legs.”

    - probably that’s the reason why people living in the slums are more happier sharing their area of 600 sq ft. with 6 other people. But in some developed countries an individual has enough space say 6000 sq ft to live in and spend in a day more than what an individual earns in a month. But you know he got to be seeking assistance either in form drugs, pills, or beverages for a good night sleep – all alone.

  6. It’s amazing how under-researched the documentary is and how narrow the narrator’s perspective is.

    I will agree with one thing, though: Bangalore is turning into a nightmare.

  7. I read a lot of comments on this post, but did not read them all, but it would seem that most of the ppl here have not lost their jobs to outsourcing. I have. TWICE. I was a Accounts Payable Representative (one of the lowest level jobs at the company) and was paid $12.00 per hour. I was living check to check (nope, no credit cards and no car payment at the time). It is expensive to live here in the US which is why Americans need well paying jobs. I found another job within the same company as a call center representative (the irony is eerie), but I was angry for a couple years and then decided to get on with my life. Eventually this job would be outsourced too.

    It just so happens that the call center I was working in was payroll. I got to see everyone’s salary. Managers earning $10,000 a MONTH. Executives earning literally $20,000 to $30,000 a MONTH. I see execs and managers with 401Ks that have $900,000 balance. That is the problem with American corporations. It is not us. It is not the little employees at the company causing any financial problems, were just the ones who get picked to lose our jobs. I do not buy into the whole competition thing. American corporations are laying off 700 people who earn $25K to $50k a year while they need to cut back on executive and management salaries. Our company investors pressured our company to do something about the proceeds they were receiving in their investments so the company starting taking American jobs to appease their investors. If you know anything about accounting, if you lay off some piddly workers now your salaries expense becomes revenue.

    In 2004 when I lost my job to outsourcing I KNEW then that the economy would crash. Our American jobs are tied into our HEALTH CARE for example. We lose our jobs now we have a healthcare crisis in this country. Our retail industry is suffering b/c we do not have jobs and thus no disposable income to put back into our economy.

    I was going to buy an new car next year, but I am not going to do that now b/c once it is paid off I will be free of that debt and since there is no loyalty among American employers anymore I cannot guarantee I will be able to afford to spend my money. Now all I do is save just in case I am laid off again.

    I am training my nephew (who I am raising) to be self sufficient b/c his loyalty will mean nothing to an American company. There is no point in making someone else a millionaire by working 40+ hours a week if the thanks he will get is a pink slip.

  8. Hi Tim,
    I was rereading your book and had an idea I wanted to bounce off you–what are the odds that I could outsource finding a muse to India, selecting one and then automating it? Am I jumping the gun a bit or am I actually on to something?

    Many Thanks,
    Lenora

  9. I thought the guy was very balanced and didn’t react when they started talking about the Indian engineers being more talented – fair play to him

  10. Tim..that was an amazing video! In America, just like what was stated in the video, we do have restrictions…or as compared to many other countries around the world. We can redefine ourselves very quickly. If we lose a job, we can quickly develop another way to earn money, or get another job. That is the beauty of America…we are very innovative, and are allowed to become innovative and owners of our own work and business. Americans have been “babied” for too long…..instead of us thinking that we owe ourselves a good life, we think that somenone owes “us” a good life. That will only dig a deeper hole for this country to fall in. Instead of being so insultnig about outsourcing, we need to take full advantage of it and use it to help us make money. Places like Elance, gives the small business owner, or even an employee, an affordable avenue to use outsourcing for their own tasks.

  11. Americans, many of us, are very slow in adjusting to the new economy, which is very global. Since we are becoming very global, we are going to have to give up some of our comfort zones. This is not the 1980′s, not the 1950′s, not even the 1990′s. This is a whole new ballgame. The traditional job market here has changed drastically. It is only the Americans who can not adjust to this new economy who will lose out. Americans, I include myself too, are good at complaining…when we really have it much better, even when we do lose our jobs, than many people around the world. Like I said…it is time for us not to think that somone owes us something..even though we work for them…we need to begin to think we owe ourselves a good life. Which means, stop complaining about how many jobs you lost, be thankful you do not live in India, which still has massive poverty, and recreate your skills. Go to back to school, start your own business, go for another job, talk to people who know how to operate well in this new economy. Guess what…those manufacturing jobs, some of the tech jobs, and certainly the call center jobs…may and will leave. It is time we realize the kind of job market we are getting into and be proactive, instead of hopeing that we do not lose this job..and then cry about it when we do.

  12. The people who are rich in this country, do not get it by belonging to a rich family…”old money”family. They had learn how to create a business,make profits, market; or hire people to do these things…and they needed passion. Now, these things are not exclusive to just a handful of people, which is to say.when we talk about “rich people”, the big corporations taking money, taking the jobs to give to others overseas…we need to realize that these monster companys started at the beginning. It took time to grow these companies…and the people who did it, not saying that some were not scoundrels…but the people who did it had nerves of steel…they put in a lot of work to get there. Can we do the same thing…instead of us complaining about our jobs being taken away from us by the big corporations and given overseas…..do we have the audacity and the guts to start our own business and grow it to the level of those monster companies…these companies began with “one idea’ and “one or a few people”. They are not superhuman, they are regular human beings. See, it is easy to attack these corporations…and its CEO’s instead of pointing our own finger back to us…and see our own selves in the mirror. Are we lacking something….are we doing enough to have a good future…or are we waiting. Working a job does not cut it anymore…we have to have more vision…we have to have more innovation to help us if we do lose our jobs. The writing has been on the wall for a long time..but we as a country we were asleep at the wheel….now we see that we have change.

  13. Thanks a lot for posting this. I was wondering if anyone here has used outsourcing to produce blog related content? Seems to me that if you price your article at $2-$3 to your writer, and you manage to get $5+ from advertisers, then you have created a viable business model..

  14. Thanks Tim for the excellent video. It gives us all a new perspective to think about and understand why Indian virtual assistants are afvourite picks for most of torganisations looking at outsourcing.

  15. Thanks for the great vids Tim.

    @Steve Dalton: “Computer programmer” here and I think that you’re half-way right about your “Agile” comments. Yes, Agile is the new way in which we will develop software and yes, some people in other countries may be “behind the curve”. But honestly, companies in the US are not necessarily on the curve either.

    Most programmers I know (and have met) do some hashed-up version of waterfall and agile because they’re not really comfortable at either. They’ve never written unit tests, they don’t talk to clients, they don’t storyboard. Heck even some of the agile people can devolve into “Agile as an excuse to be sloppy” (link)).

    At the end of the day, becoming an adept and productive software developer requires a host of skills, a lot of education and even more experience. Building good software currently needs at least a few talented and skilled people. The best software developers are still 10 times more productive. It’s easy to claim that outsourcing software has been a failure, but most Western firms aren’t exactly in a position to claim success. Software development is still horribly misunderstood and generally poorly managed even at top firms.

    And don’t think that Agile provides anything more than a temporary edge. Cheaper workers will also “discover” Agile, they’ll catch up too. Remember, you’re in a knowledge worker’s economy, but you’re living in a country where the motto is “no child left behind”. My friends who grew up in the Ukraine learned derivatives, integrals and linear algebra in high school… at age 16!

    This guy’s an out-of-work computer programmer and he’s been out of a job for at least a month (based on the intro). What’s he doing? If he didn’t have interviews lined up the day he got laid off, then he should have at least been doing professional certifications while he hunted for a new job.

  16. @Natalie
    Welcome to the new economy! (I hope that your rant was cathartic, now get over it):
    Managers earning $10,000 a MONTH. Executives earning literally $20,000 to $30,000 a MONTH…American corporations are laying off 700 people who earn $25K to $50k a year while they need to cut back on executive and management salaries.

    Calling managers over-paid is no more or less short-sighted than called the “drones” underpaid. It’s a free economy. If firing executives and managers was actually the solution to the problem, one big firm would already have done that and now they’d be out-performing the competition.

    Honestly, what you’re missing here is that those people making 10-30k / month are likely indispensable at even that salary. They are operating high-responsibility jobs that likely hinge on knowledge and skills that you don’t currently have. In almost all cases, they’ve earned that position through extensive education, training and experience.

    You’re right about what you tell your nephew: “I am training my nephew (who I am raising) to be self sufficient b/c his loyalty will mean nothing to an American company.”, this is indeed the new economy. But there’s more to it than that.

    You’re an intelligent, obviously literate person, your post was basically free of spelling errors (and that’s saying a lot these days). You’re hanging around a pretty heady (if eccentric) website like Tim’s blog. So my question is, what are you doing?

    Why are you working A/R and call centers? Why aren’t you worth 10k / month? What did you do last month to make yourself indispensable to your company? What did you do last month to grow revenues? Are you getting a fair cut for these efforts? Why not?

    It’s fun *(& popular) to say that business executives are “overpaid”. But people have been making that argument since the dawn of time. You live in a world with about as much free choice as any that humanity has ever known, so you don’t really have the “evil tyrant” excuse to fall back on.

    For every argument you can make about rich, fat-cats ruining America and sending jobs overseas, I can make a counter-argument about lazy American workers who don’t carry their weight, don’t get enough training and don’t take enough initiative. This is not a “winnable” argument, we’re talking about a global balance built in a highly dynamic framework played out over generations.

    The fundamental reality remains unchanged. You can either generate money and become indispensable or you can bleed money and get laid off. Companies don’t lay off generators unless they’re in their death throes. Generators don’t have a rough time finding work, b/c some rising ship will pick them up (they’re like found money).

    It’s nobody’s fault, it just is.

  17. I am an Indian IT professional but working in Dubai. A lot of effort has been put into this, but somehow the entire core seems to be shaky.

    There seems to be too much of a generalisation : Seeing a few villages in Bangalore cannot give you an idea about how India is.

    Some of the incongruencies that I noticed :

    The Ranjan family seem to be very artificial, almost runining the authenticity of the video, as a south Indian I could not help cracking up at some of the crazy things they were doing.

    Telemarketing is definitely NOT something that has high regard among those with professional technical degrees! This video makes it sound as if it is considered to be a prestigious career!!!

    Jobs in India are definitely not easy to find. The number of applicants per available position is mind boggling and there are tens of thousands of unemployed IT professionals in India.

    Oh and we have been getting milk delivered on our doorstep in hygenically sealed packets…for the past 30 years :)

    Chris’ comments about poverty appears as if there is no poverty back home!

  18. Oh dear… Now the knowledge economy is gone we really are doomed! Who is going to buy your house now?

    My last (onshore) project had 100 Indians on it – not just developers but Testers, Business Analysts, Project Managers etc. Plus 10 Russians, and 20 Chinese. There were only 5 native developers.

    One questions – why are you handing control of your air traffic control systems, missile systems, banking and finance systems etc to the Chinese, Russians and Indian Muslims i.e. people who hate you in the West. Do you honestly think that I can protect the integrity of the code when I am overwhelmed? Do you know how easy it is to insert (if month = 02 day =29 then powerDown) into the code and build it?

  19. Hey Tim,
    Just watched the video (downloaded it on itunes). Incredibly interesting to see the other side of outsourcing. I think sometimes we forget that there are real people on the other side of those phones. I have outsourced almost all of my muse at this point and am so grateful to the work that their doing to help me live my four hour work week.

  20. I agree with Roshini.

    I am an Indian born and raised in Mumbai. I have had friends from Bangalore who are anything like the Ranjans. My apologies, but hey seem to be stuck in the middle ages and yes seem artificial. On a more professional level, Telemarketing jobs are readily available and not a prestigious career. Being a call centre manager is another ball game altogether.

    Jobs in India are definitely not easy to find. The good jobs are already spoken for and are rare to come by.

    Currently, I am a resident Canada ( 8 years now) and the opportunity to work and change jobs is unbelievable. I do not think that the 4HWW would be a ‘thought’ if I had been in India. We have a lot of opportunity here too. Some are just lazy and spoiled that we do not avail of the resources around us. I truly believe that ‘ you can succeed anywhere if you have the will and the resources to do so’ Tim Ferris proved it. And now I follow suit….So ends my rant!

    Go ahead people, have fun doing what you do best !

  21. Thanks for the awesome book!
    I’m trying to re-organize my life even though it seems quite difficult for me. I’m doing my doctoral degree in IT and working part-time that seems a full time job. I’ve read half of the book and trying to outsource some tasks that I don’t have much skills and consumes a lot of my time.
    I can’t even cut down 10% of work time but I’m trying. Everything seems having to be done shortly at pretty much at the same time and I miss going to the dance class!
    :(

  22. Tim have you seen Outsourced The Movie?

    It is exactly what it sounds like in modern times: outsourcing in India.

    Not only is it a fictional film that people totally fall in love with but the producers travel around the US to give talks at business seminars and to educators. The movie is American made and filmed in India. It’s heart warming. You’ll like it.

  23. Wow…I been to India…but I went to all the turisty places…nothing like this…I will go back sometime this year.

    Reinvent and Reimagine thats the key.

  24. this video makes me feel good that I’m going to be outsourcing to a VA firm in India. I’ll be making profit and supplying jobs to a less fortunate nation at the same time. talk about a win win situation.
    “stealing american jobs” lol. loss of a few jobs will not result in further poverty in america. our poverty is a time deficit rather than a monetary deficit (although this exists too) and is spiritual in nature. thanks for posting ;D!

  25. this is a really good video. it opened up my mind quite a bit.

    At one point I’m extremely pleased by the fact that the tedious business-related errands can be done by someone who is ACTUALLY HAPPY to do it. For 1/4 the price! and it could be less. But then i had my doubts. Is it sustainable? Since the karma of unsustainability always catch up in the end, never up front. Then, this thought went into my head.

    You see, I’m an indonesian living in Singapore currently. For a Singaporean, an income of S$500 is not that much. Actually, it’s the typical income of a waiter. Convert that to Rupiah, which is Rp 3.800.000, then that is considered a lot for someone who lives in Indonesia. That is the usual salary for a middle-class manager working 9-to-5 in some company. How can this be? Simply because it doesn’t cost much to live there.

    So i guess outsourcing can be a win-win deal. You pay a small amount of money to someone to do your job. But for them it’s a lot of money since their living cost is not that high, compared to our first-world standard that we are living in.

    life CAN be filled with abundance

  26. good one, Writerforce is my ghostwriting firm in Mumbai, and i have seen both sides of the story :)

    it reminds me of the two movies client eastwood had made on the american/japanese war

    letters from iwo jima

    and

    flags of our fathers

    Both these films are exceptionally made and show both sides of the war…

  27. Thanks for posting the video clip, Tim.

    When I read 4HWW, one thing that I was not sure about was outsourcing. It’s been a while since I have taken a look at your book, and for some reason, I’ve been drawn to the material again as well as your blog.

    Since first reading your book, my perspective has changed. Watching this episode on your blog has helped give me some more to ponder. I have been drawn to materials that talk about the law of attraction (i.e. Think and Grow Rich, The Secret, Ask and It is Given). It makes sense in my own life when I see how certain thoughts tend to multiply or see the direct correlation between patterns of thinking and what manifests in my experience, recognizing that we all have the ability to “create our own reality.”

    I had previously been involved in various social services. I also live in a town with many people who have a social cause to fight. I was one of those people, but then fighting for or against something just got plain exhausting.

    For the past year I have been reading a lot and focusing on financial education and business building. In these pursuits, I have come across the belief that pursuing wealth or abundance of time and money is unethical or unspiritual, and that rich people steal from the rest of the world. The perspective is always focused on those other people who are making my life miserable. This is really an excuse for not doing anything for myself to change my own experience or perhaps a way to feel safe in the midst of being uncertain about how to create that change. From the perspective of the law of attraction, complaining just brings about more complaining. Whoops! It’s time to tell a different story!

    I imagine that the positive outlook in light of stark conditions is like focusing on what I want rather than on what’s not working. I see this clearly in the video, I recognized it while reading The City of Joy, and when I reflect on it, I also witnessed this in the years that I grew up in the Philippines. When so many people here in the United States have been complaining about their jobs and situations, focusing on negative news, and feeding on doomsday gossip while at the same time people in India, the Philippines, and China are shifting their perspective by focusing on hopefulness and possibilities, it’s no surprise that there’s a big move to outsource to those other countries.

    The beautiful thing about all of this is that there are two ways to look at what’s going on economically: an apocalyptic doomsday approach or realizing that what is happening is a powerful opportunity to see that we’ve been focusing on what doesn’t work and choose instead to focus on opportunity. I’ve lived both ways, and I prefer the latter perspective. It helps me sleep better at night.

  28. I’ve decided to spend at least two years in Western China. I’m spending about 15 hours a week working there and sometime on my start up business which is based in California while I work on my Mandarian. I’ve found extra work editing Chinese publications which have already undergone inital translation to English. I’m wondering how I can turn my time in China into something bigger. Any ideas?

  29. It’s human nature to take the most advantageous road for ourselves. For some that may be a road in India, or Panama, or Argentina, or any number of international destinations. People are curious, want to explore, want to try new things. You have only yourself in the end, so listen to your heart and your mind and go with what feels right to you. This is your big day. Live it the best way you know how.

  30. As toolmrl mentioned, it’s curious that he’s in a call center instead of a programming job. What I’m wondering is if he couldn’t meet their qualifications for programming…

  31. I think its time to outsource my life. I already am mildly into outsourcing, because I value my time. I have my son who I want to be with as much as possible.

    We can never get back our time.

  32. If you receive your web biz income in dollars and pay outsourcers in dollars in say India /China etc . What will happen to people who have their newly found 4HWW freedom in income aroung geoarbitrage if the dollars crashes tremendously in the immediate future as is being forecast in books such as Crash Proof 2.0 ?

  33. I am an Indian who came to US for education and just got my first job Some thing I would like to note about the videos and comments above:

    >> Its not true that its easier to find a job and life in India. Thinks are much easier here in US, there are more job opportunities available here. Most of the time the problem is that people who try for the job don’t have the expertise for the job or are not that flexible.

    >> People are not taking education seriously(at least not enough people in technology). Dont get me wrong, the people are very talented and creative. But the jobs of the future is going to be more specialized and higher up in the value chain( especially with outsourcing and globalization). Dont expect to get employed just by knowing basic Math and English. I just dont get why some people think they are entitled to get a job just because they want to work.

    >> Dont take India ( and China ) as a threat. The population of India is about 4 times that of US ( and china much more). Even if about 1/2 of the people of both countries have the same average standard of living as US, then you are talking about a market about 4 times present US economy. This is an opportunity for US as never before because at present American corporations are the most innovative and most competitive in the world.

    >> Many of the thing shown in the video are just generalization and may not be completely true. Some of the thing are cultural. For example why are so many people living in a single house in video?? Coz joint family are a common norm there even if you are a dollar millionaire. Many of the things are true, though its fast changing. After all India is a developing country and has its own share of shortcomings.

    Thanks for the video. Liked it.

  34. Tim,

    Outsourcing is an essential part of business now. US is outsourcing to india and India is also outsourcing some work to united states. Its a battle of cutting the cost, nothing else.

    The living cost in united states is way higher than india. Bigger companies in states are outsourcing work to india at way cheaper costs and thus increasing the un-employment in United States. This trend is going to continue unless obama imposes something on the states. Outsourcing isn’t going to stop now!

  35. You Americans need to get out of your American bubble and learn and see a lot of things. You just keep generalizing all the time. C’mon the world is changing get out of your bubble.