types of outsourcing and how to stop outsourcing 4

[Crox]

Hi,
What ways are there to (also offshore) outsource and why should your company or the companies you worked for or any company not outsource. Which experiences do you have, what went wrong, etc. Links are also ok.

For example:

banks should never outsource because:

- safety
reasons:
experiences:

- quality
reasons:
experiences:

I like to hit some managers with strong arguments. Of course I have a lot of them and I'll write them later here but I want your input, your experiences, your examples!

 

[RAGP]

Why not outsource? A company should readily admit that there are some business functions wherein they lack the needed expertise and this is one of the major reasons why there is outsourcing. Another reason is to minimize cost. Most companies look for cheeper labor costs and go to firms which offer highly effective and efficient workforce to support a business' struggling processes or functions. This is why most tech centers and software development companies are situated or based in 3rd world countries like India and the Philippines primarily to minimize cost. Another factor here is that these two countries can speak the english language fluently plus they both have able manpower who are highly educated in the IT industry. I'd like to stress out two factors again to end my post. 1st, outsourcing minimizes cost. 2nd, why not admit that some funtions in a company aren't specialized by their head-count personnel.

 

[Crox]

I think you didn't read te message. I know why managers want to outsource. I know also that completely outsourcing for banks is UNACCEPTABLE unsafe. They should not do that. So if you want to start a thread about why you should outsource, start a new one but I want here arguments why NOT.

 

[johnherman]

Your company could be "held hostage" by the outsource company. Not literally, but during the 1970's, bosses used to feel that they were being held hostage by IBM, since IBM really had not competition and could charge whatever they damn wanted. Once the outsource company gets your data, what will it take from an international legal perspective to enforce the contract?

Second point. Again somewhat legal. In certain industries, there are requirements to handle certain personal information (banks, credit cards, health care) with a certain degree of diligence. Can you say that having that data in the hands of an organization probably exempt from US laws is a good thing. What would your customers and vendors think? Will the data actually be stored offshore? If not, how do you give the outsource vendor an adequate sample of data without trampling on privacy issues?

Communication issues. Communication costs - the cost for data and voice connections to the outsource location(s). Project control - might be difficult to control project management issues via telephone alone. Now you have the cost of visiting the oursource vendor or having them visit you. Is there a language difference between outsource vendor and client? Cultural issues - different holidays, perhaps even different philosophies on work ethics and quality, or what constitutes good service.

Sometimes the grass is greener on the other side because there is more manure there - original.

 

[RAGP]

OK, I used to work for a telecom-GSM company here in the Philippines. I was a system administrator for quite some time under the network quality department which specializes in putting up and optimizing cellular phone sites. In our pool, there were 12 contractual engineers who were outsourced from agency staffing/recruiting firms also situated in the Philippines. What these individuals did was survey possible cell site locations. They worked without benefits for short. Just the pay. They earned roughly 20,000.00 philippine pesos or $400.00 a month (which is a par amount of salary by Philippine standards). Everyday, they get exposed to hazards like, probable accidents (because they go to regions where there are rebel forces), microwave radiation (emitted by cell sites) and they don't get no travel and safety insurance, medical benefits and alike. That is one disadvantage. A company does save up a lot of money, but basically don't take care of their people, because come to think of it, those aren't their people at all. They were merely hired from staffing/recruitment companies. Of course those types of companies (i mean the staffing/recruiting) also don't want to spend on employee benefits. In a sense, they do give par to high salary for their employees to work for their clients, but don't actually take care of their people.

Another instance I should stress on is that employees who are outsourced, don't feel at home with the company they're assigned to. They have this "bias" mindset that they have no favor from the management of the company they were assigned to.

Quality wise, at first, outsourced employees work hard. They work hard primarily to get the attention of their client company. Like "hello i'm here, i work hard, please make me a mainstay in this company" but when they've been working for years without getting absorbed by the client company, the Q-level starts going down. Instead of concentrating on the job they're supposed to do, they slack off and wait for their contracts to end. Especially when the client's management starts hiring headcount, preferring new entrands rather than absorbing them and the experience they garnered and familiarity with the company.

Touching on the tech-support-call-center phenomenon in India and the Philippines, all I see is a fast turn-around in recruitment. Here and India, (where time zones are like 12 hours ahead of the states) people have to adjust their sleeping habits to support the products of the west. Because usually, tech-call-centers perform support for the Americas and Europe. This posses an issue with sleep. Tech's easily get tired cause they sleep in the day, and stay up during the evening.

It would be frustrating. I'm glad I never applied for any outsourcing companies in the past. Because I had compatriots who did, and were quick in jumping from job to job.

But I still feel that outsourcing is a need of companies now-a-days because of budget constraints and other reasons I mentioned in my first reply.

Hope this helps

Robert Andrew G. Pangilinan
Business Analyst/Consultant
Philam Systems, Inc. - AIG Group of Companies

 

[Crox]

In China a SARS-virus escaped from the laboratory. From the west there are also outsourcing projects for analyses on DNA, viruses, to China for example. Just one example of less security on offshore locations, even when lifes are in dagner. What about fraud, viruses, terror, etc. etc. in the outsourced software?

 

[johnherman]

Yes, Crox, you are right, hidden code (referred to as and Easter Egg if harmless) and backdoors are often built into software, even software built in the US by reputable companies.

The possibility of harmful code being hidden is equally possible and, of course, more dangerous.

Sometimes the grass is greener on the other side because there is more manure there - original.

 

[johnherman]

From this week's Computerworld

http://www.computerworld.com/securitytopics/security/privacy/story/0,10801,93002,00.html

or

http://www.computerworld.com

and enter 46751 in the quick link box.

Sometimes the grass is greener on the other side because there is more manure there - original.

 

[Crox]

Thanks! A good story.
Did you read this:

http://www.greenhousecafe.com/cgi-bin/ubb6/ultimatebb.cgi?ubb=get_topic&f=25&t=000124&p=4#000094

 

[BernardErtl]

Another discussion on outsourcing projects:

http://www.projectsmart.co.uk/project_management/show.php?topic=20040222134907

Bernard Ertl
www.interplansystems.com - eTaskMaker project planning tool

 

[Crox]

General discussion about outsourcing:

http://www.greenhousecafe.com/cgi-bin/ubb6/ultimatebb.cgi?ubb=forum;f=25

 

[RAGP]

Crox,

tis really getting juicy in the forum you started at green house!!! man! a 3rd world war might start because of this!

well, i understand the points you've made here and in the other forum. i think security wise, you should really have second thoughts on letting others develop the software for you.

I believe that every business should invest in an IT Group and that if ever they have one, should invest high on R&D. this gives its IT people the edge over others, and basically equips its people to do the job, anytime, any which way and without hesitations.

fine, outsource secretaries, helpdesk, sanitation/janitors, never IT

Robert Andrew G. Pangilinan
Business Analyst
Philam Systems, Inc.
AIG Group of Companies

 

[Crox]

Hi Robert,

You are right, it can become nuclear even!

Did you read also the other thread?

http://www.greenhousecafe.com/cgi-bin/ubb6/ultimatebb.cgi?ubb=get_topic;f=25;t=000136

That is even making the Indians even more angry. I don't want them to become angry, I want Dutch companies not to outsource, that is my goal.

I am very glad you agree with me on this issue.

Regards,

Crox