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Monday, Nov 9, 2009
Not all trips to India are blessed by Krishna: A case study of outsourcing gone awry.
Apr 6, 2004 | The job title on Celeste Smith's business card reads "software project manager," but "surrogate worrier" seems just as apt. After all, the moment her bosses go to sleep is the very moment her nightmares start.
Twelve months ago, Smith, who prefers not to give out her real name lest the blowback put her in the swelling ranks of unemployed U.S. engineers, began work on a high-stakes development project. Her orders were explicit: The company, a major Wall Street bank, needed the system, but with the stock market then in the midst of a three-year slide, it also needed to shave costs. Because her department could employ five skilled Indian programmers for the $1,000 it spent each day on a single U.S. programmer, an Indian subcontractor was quickly hired for the back-end work.
Twelve months and 150,000 frequent-flier miles later, the dark circles under Smith's eyes attest to how well the project is doing. What first looked like a novel shortcut has instead evolved into a death march. Every third week, she and her best Indian coders shuttle back and forth between Bangalore and Manhattan, patching up brittle code and patching over brittle emotions.
Looking back, the number of shattered assumptions reads like a management case study.
"I had to explain to them what batch processing was," says Smith, exasperation showing in her voice. "I had to explain what a job dependency was. Totally basic things you'd expect any 26- or 27-year-old American programmer to know, they didn't know."
Now, with her project nearing completion, Smith faces a final irony: Many of the programmers she just spent the last 12 months bringing up to speed will be gone by the time the first customer support calls start rolling in. Eager to leverage their new experience, they are borrowing a page from their 1990s U.S. peers and shopping résumés all over Bangalore. Smith predicts a turnover rate of 20 percent in the next six months and laughs whenever a vice president, CEO or politician uses "outsourcing" and "cost savings" in the same sentence.
"Sure, we saved money on the labor," she says. "But what about the other costs? What about the cost of rewriting the same piece of code 50 times? What about the cost of delaying other projects, the travel and lodging?"
Anger venting, Smith ends with a flourish: "Where did all our savings go when, at the end of the day, we have a piece-of-shit system that'll just need to be replaced in three years?"
Where indeed? Like a lot of other things software-related, overseas outsourcing is an attempt to disguise complexity with simplicity. To some, it's a cost-cutting panacea. To others, it's management's latest attempt to screw the American worker. To those caught in the middle -- the chief technology officers and project managers who have to make it work regardless of their political opinions -- it's simply the latest business trend that, like all trends before it, comes weighted with pluses and minuses.
"Outsourcing can provide a pretty big, immediate cost savings, but it can put a big strain on your internal I.T. [information technology] structure," notes Darrel Raynor, the managing director of Data Analysis, an Austin, Texas, company that specializes in project management. "It takes the implicit costs and makes them explicit. Whereas before you could pull a person off of one effort and put them on a new effort, knowing that person was a sunk cost. With outsourcing, you can't do that so easily, because now you're dealing business to business.
