it happened again today. I found myself alone in my office with a couple of Indians talking about the “offshore problem.” its positively surreal.
here’s how it goes:
we’re trying to sell a thing, but our customers might be able to spec it out to an outsourced vendor. Indian vendors are particularly attractive these days because their costs are astonishingly low and their quality is quite high, they speak english fluently, and they’re very aggressive. in addition, they often benefit from educations at american engineering schools, and I suspect sometimes numerous informal relationship networks developed over the past few decades of immigration and h1-b visa guest workers. all this overlayed on a global business context in which there are essentially no rules.
we’re agressive too, in our own way, asking an astonishingly high price for a product not yet proven in the market.
but here we are, discussing our strategy, and how we can respond to our customer’s demands, and we add up how much it will cost us to do it, and when we can get it done, and the numbers aren’t what we want them to be. and then it becomes clear that we could solve some of our problems by using an offshore company.
on the one hand these guys are in some ways in the same boat as me. one is a naturalized american citizen, the other a permanent resident, and they’re not crazy about the prospect of losing their jobs. both were educated in the states, and never went home. but the one who’s an american citizen has a brother-in-law who works for tata. there isn’t an insurance company in the country who hasn’t long ago outsourced large chunks of their it departments to his company and others like it. besides insurance companies, his clients include many others as well, such as the red cross, the imf, etc.
his brother in law is upset because he is himself being undercut by another upstart Indian company called infosys.
“the law of the jungle” I say.
we all laugh.
“we need to be twice as smart” I say. pausing at the irony when I say ‘we’, but also pondering that I myself am an immigrant of sorts, to Texas from New York for no good reason, staying only because the job market for computer jockies seemed more robust than anything I remembered from the northeast in the ’70s. not to mention my grandparents coming to the states for similar reasons, and in the end, maybe I have more in common with these Indians than I do with many Texans, New Yorkers or Irishmen.
“the ROI equation is based on a cost-benefit ratio. if you halve the cost for constant benefit, you win. that’s what’s happening. but what if you double the benefit for the same cost? that could be a reasonable defense.”
“but you have to stay alive long enough for the benefit to become apparent. the productivity benefit may not be measurable for a year or more. the cost benefit is measurable immediately. ” my friend says.
“yeah, and business decisions are based on quarter over quarter results. besides,” I say, “we’re not twice as smart.” we all laugh again, but I suspect my friend. I have seen him smile and laugh reflexively at what might be considered inappropriate times, such as when someone gets laid off. he smiles like a shark.
“all this makes sense as long as you’re computing the ROI of pure labor. but what we’re supposed to be doing is developing new product. that’s a creative process that’s not so easy to spec out in advance and send offshore.”
my friends nod.
“but we’re not doing that either” I say, and we all laugh again.