Author Archives: 123outsource

You are on vacation and your world falls apart

April 14, 2014 by 123outsource
Categories: Of Interest | Tagged , | Leave a comment

I always fear going away on vacation. I will be away from my desk, my checkbook, my familiar setting. What if something goes wrong? The worst problems I have had in business had to do with connecting a person working an American schedule with someone in India. I am flexible and can be available at any hour of the day or night, but others are rigid and work in offices. It took a week of me pestering everyone in site to get John and Ramesh on the phone together to solve a very simple technical problem. Why is life like pulling teeth.

But, recently, I was not in India. I was in Arizona, only a few hours from my home. I went away to get some desert energy in me. I feel very boosted up after a quick trip to the desert for a few days. The spirits do healing on me. The cactuses are soothing to me (even though they have needles.) The break from work for a few days also does miracles.

But, my site went down while in Arizona. My site goes down every several weeks. But, getting it back up requires me to bug the hell out of whomever can get it back up to talk to the server company for me. Connie called me and let me know what had happened. Then, I called John, and left him messages. I couldn’t reach John, my regular contact. So, I called my new programmer. He was also not there. I was really sweating at this point. We get 5000 visitors per day on my site and going down for more than an hour will get us complaints and ruin our stats. So, the programmer called me back an hour later and we were back in action.

The point is that I had to learn how to be the “At home me” and solve problems while I was in my car in the desert on an Indian reservation. I’m not used to solving serious problems while driving around. But, I managed, and I lived to tell about it. Yes, I get overly paranoid about things that might not phase others. But, maybe that is why God entrusted me with a few critical operations and not someone else! He knows I care.

But, I’m reading about people who go on vacation for a month with no phone? In my business we might be out of business if that happened. Others don’t seem to be able to put Humpty Dumpty back together without my intervention. Yes, it makes me feel needed, but seriously — can’t other people do anything without my constant nagging?

Tweets:
(1) I read about a guy who went on vacation w/o a phone? I would be out of biz in days like that!
(2) what if you go on vacation & something breaks or someone quits while you are gone?

You might also like:

Having a foundation in business for long term growth!
http://bpo.123outsource.net/2014/03/27/having-a-foundation-in-business-for-long-term-growth/

Does your team function as a team?
http://bpo.123outsource.net/2014/01/18/does-your-team-function-as-a-team/

Is it better to hire your own top-notch employee or outsource your task?

April 13, 2014 by 123outsource
Categories: Management, Semi-Popular | Tagged , , , , , , | Leave a comment

Is it better to hire your own top-notch employee or outsource your task?

The answer is not so simple.
If you have repetitive tasks that require exactly 40 hours per week to do, then hire an employee. But, what if you only need a few hours a day of specialized service? You might outsource the task to a company, or a highly skilled freelancer! In the end, it is really about finding someone who can get the job done they way you want it done.

Being in control of your new helper
Sure, you can hire your own employee. If you hire someone, it is easier to watch them if they are sitting next to you than if they are hundreds or thousands of miles away working for someone else. It is also easier to control an employee. You can say, “Do it my way or your’re fired!” Try saying that to someone at an outsourced company. They have to do what THEIR boss says, not what you say. You will be more in control (generally) if you hire your own person.

The outsourced company might be better at hiring
Anyone can hire someone to help them out. But, someone who specializes in hiring within a particular specialty might be better at hiring those types of people. On the other hand, the company might have mediocre taste in those that they hire, while you might be more discriminating. Additionally, it is easier to work with someone who you have a good personality match with. Someone who you hire is more likely to be compatible with you than an outsourced worker. Bad personal relationships almost always lead to substandard work with outsourced workers!

Having enough work?
If you run a small company, you sometimes don’t have enough work for a full-time employee. The other problem is that your full-time employee might not be able to do all of the tasks that you assign them, or might not be that good at half of the tasks. If you outsource a task, they do as many hours as you assign them. Freelancers are in the same boat. If you don’t mind having an employee sitting around twiddling their thumbs, or being paid overtime, you might be able to handle the work fluctuations. Or, if you have more than 40 hours of work per week to give to someone new, hire an employee and give the remainder to an outsourced company!

Letting it pile up?
If you have 25 hours a week of work for someone to do, and you let it pile up for a while, it might become 40 hours a week of work if you include playing catch up ball. On the other hand, if your new employee quits or gets fired quickly, you might quickly find yourself very painfully behind. The pile up strategy is very interesting, but has its pitfalls!

What should you do?
If you need to outsource a task, consider all of the options. Interview lots of outsourced companies, freelancers, and prospective employees. Try your best options after some analysis, and then commit to the best option and see what happens!

Tweets:
(1) If you have repetetive tasks that require exactly 40 hours per week to do, then hire an employee
(2) If you need specialized service, hire an outsourced company or a highly skilled freelancer!
(3) It’s easier to watch your help if if they are right next to you & NOT 5000 miles away in India!
(4) If you hire your own employee rather than outsourcing, you’re more likely to get personality compatibility!
(5) If you run a small company, you sometimes don’t have enough work for a full-time employee. Time to outsource!
(6) Bad personal relationships in the workplace almost always lead to substandard work!
(7) If you have 25 hrs/week of work to do and let it pile up for a few months, it becomes 40 hours playing catchup ball.

You might also like:

Good sign bad sign: what to look for in newly hired workers
http://bpo.123outsource.net/2014/01/13/outsource-blog-good-sign-bad-sign-what-to-look-for-in-newly-hired-workers/

A 20 minute office visit reveals the character of a company!
http://bpo.123outsource.net/2013/12/12/a-20-minute-office-visit-reveals-the-character-of-a-company/

Outsourcing to the Philippines — things I noticed

April 11, 2014 by 123outsource
Categories: Philippines | Tagged , , | Leave a comment

I have never outsourced to the Philippines myself, at least not yet. I like certain attributes that the Filipinos have as a culture. I have been made aware of several tendencies that you might want to be aware of.

The Philippines is very integrated with the West as far as business is concerned. It is common for Caucasians to live in Manila, Cebu or other outsourcing destinations in the Philippines. Westerners find the culture comfortable, friendly, and inviting, not to mention the warm climate. It is normal for Westerners to work at multinational Filipino companies in management and sales.

What I learned is that they are great talkers. They are smooth, friendly, and fun to talk to. Even the Westerners that live in the Philippines conform to this norm. The accent is different, but the message is still the same. The minute I tried to get anyone to email me information it was like pulling teeth. I tried to get a German guy managing a small company in Manila to return a quote to me. I asked twice and then gave up. I asked a Filipino manager and call center worker to return a quote to me. I had to ask five times and finally got it. Filipinos and often foreigners who live there are wonderful orally and horrible about writing anything down or returning emails.

There is yet another experience I had. The lady was the nicest person I have ever spoken to in my life. Her photo was a knock-out too. She was the most beautiful female I have ever seen — at least by photo. Later, I noticed broken links on their site, and a failure to return emails.

My last example really cost me. My dentist is also from the Philippines. She is a wonderful person and great at her work. But, her record keeping is in handwriting, and not that organized. Although I see her four times a year for cleaning — We/she forgot to give me x-rays for a few years, and I had to have a root canal.

The bottom line is to appreciate the people from the Philippines, but just don’t expect much from them in terms of written communication. If you get lucky and find someone who is punctual and methodical about emails and keeping records that is great. Just expect that you will have a very difficult time getting them to write or type much.

Tweets:
(1) Filipinos are great on the phone, but how good are they at written communication?
(2) The Philippines is very integrated with the West as far as business is concerned.

You might also like:

500,000 Filipinos workers are on American time!
http://bpo.123outsource.net/2014/03/29/half-a-million-filipino-call-center-workers-are-on-american-time/

Call center Manila news
http://bpo.123outsource.net/2011/04/06/call-center-manila-news/

Vampire Programmers from Transylvania!

April 10, 2014 by 123outsource
Categories: Popular on Google+, Popular Posts, Software Development | Tagged | Leave a comment

Vampire Web Developers in Transylvania? Beware of Signing Contracts–in Blood

It was early evening as I arrived for the meeting. Twilight, that mysterious time between day… and night.

I was in Transylvania, as they now spell it, an area of Romania, for a meeting with a web developer. The outsourcing firm was called “Count Source,” and the CEO had assured me “After you meet with me, your life will never be the same.” I wasn’t quite sure what to expect. As I walked up to the large wooden door in the dark stone building set back from the road at the end of a long driveway, I had the odd feeling I was being watched. I shrugged, stood at the door, and knocked. Count Dracula? Count Source Outsource? I laughed to myself. Why worry?

“Good evening,” said the strange man who opened the door. He was dressed vaguely like a butler. “I am Ambrogio. Mr. Strigoi is in the office. Have a seat. He is just finishing up a session.” At that moment, a piercing scream came from the next room: “MY CODE!!! What will happen to–” Silence.

“Would you like some…wine?” Ambrogio asked.

“No thank you. I have an appointment with Vlad Strigoi,” I said, suddenly uncomfortable. I looked around the room. “If this is a bad time I can–”

“Oh no,” said Ambrogio. I couldn’t remember where I had heard that name. “He will be with you in just a moment. We have been expecting you,” he said, smiling in a strange, sad way. He walked slowly toward the ‘office’ where the scream had come from…somewhere down a long, shadowy hall.

I looked around the room. I realized it was not only quiet but dark, lit with a few electrified candelabras on antique tables. Dark wood. The air smelled musty. This was more like a parlor, an ancient sitting room, than the waiting area of a modern hi-tech office. In fact–it looked nothing like the brochure I had seen online!

In a moment, a dark figure dressed in black walked hurriedly down the hall towards me. The first thing I noticed were his eyes: gleaming, electric, hypnotic. I was already sure this was the developer for me…

“So pleased to meet you, Mr. Montbel,” he said smoothly, barely whispering. “Won’t you come in?”

“Thank you. That’s Belmont,” I replied, but added, “Yes…Montbel…also a lovely name… I want to give you the codes to my site at once,” I murmured– not even sure why I was saying this.

Imagine the rest. In a moment, I had given a stranger the codes to my website–and all my personal information. As if I were in a trance… dazzled by the sample websites and figures and company information I was being shown. But–there was no company! No employees: only a man named Strigoi…in a room that smelled strangely like–blood. I could almost taste it, metalic and salty. And there he stood, with those swirling, penetrating dark eyes– holding out a pen for me to sign–a 200 page contract–just to get 100 hours of initial programming done! And as he gazed at me, he came ever closer…closer.

Suddenly, just as I was about to sign and give Strigoi a $10,000 retainer– I awoke from my daze, put down the red pen–and ran from the house. Suddenly I remembered: Transylvania meant “the land beyond the forest,” and Ambrogio meant “the undead” or “immortal.” Strigoi– was the name of an ancient clan–of vampires!

If you are beguiled by a sales pitch and a smile, then persuaded to sign a contract just to speak with the company about its services, or to be able to give them a test project, or do a few hours of programming–beware: it may cost you–more than you planned for or really want to spend!

Tweets:
(1) Programmers from Transylvania prefer to sign their contracts — in blood!
(2) An outsourcing company in Transylvania was called, “Count Source”
(3) After you meet with them, your life will never be the same: Outsourcing to Transylvania

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A stand up comedian at a stand up restaurant in India
http://bpo.123outsource.net/2014/01/05/stand-up-comedian-at-a-stand-up-restaurant-in-india/

An American teaches Indian companies to be more American
http://bpo.123outsource.net/2013/09/23/an-american-teaches-indian-cos-to-be-more-american/

What types of tasks are good to outsource

April 9, 2014 by 123outsource
Categories: Outsourcing Articles, Semi-Popular | Tagged , , | 1 Comment

There are countless tweets on this topic. Apparently this type of tweet gets clicked on. It is general, practical and fun.
I always say that you should make it a practice to outsource tasks that meet the following criteria:

(1) Repetitive Tasks where the directions are not too complicated
(2) Tasks that are not time sensitive (unless your service provider is very punctual)
(3) Tasks that are not too critical (unless you know your service provider well & they are reliable

If you are testing out a new company, the sad thing is that you just can’t or shouldn’t trust them. Never trust strangers. Don’t trust your friends either, but that is a different story. If I go to a new massage place, I only commit to one hour. What if I don’t like them? Usually I am not that impressed with their English, or ability to dig down into those stiff muscles of mine. If I’m trying out a new call center worker, what if people don’t like them? What if they don’t get anything done on time? What if they don’t follow directions. Don’t give critical tasks to those until they have a proven track record with you for six months. Yes — six months. Don’t take liberties. They might quit on a whim. People who don’t own their own company tend to lack the type of work ethic and attention to consequences that I have which is why I do a lot of my own “busy-work.” Once you have found an individual or company to be reliable, then you can give them any type of task which you found they can handle.

My problem is that most of my tasks require a lot of specific knowledge, or are time sensitive, or are too small in weekly hours to outsource. I prefer to outsource tasks like long lists of people who all need to be reminded about the same thing. I might have a list of 3000 people who all need to hear the same message. I just outsourced that to a young lady who is doing a super job of it. Everybody likes her including me!

Personally, I think it is a good idea to test out ten companies before you actually hire one for regular work. Most companies are not that great. If you try ten out, perhaps you will find a few that you like, and then keep the ones with the best personalities (who also deliver reliable results.) What I learned about business is that in the long run, meaningful personal bonds translate into happy and long lasting business relationships! Don’t overlook the human side of your business!

Tweet:
(1) meaningful personal bonds translate into happy and long lasting business relationships! Don’t overlook the human side of your business!
(2) Tasks that are good to outsource = repetitive or tasks that the provider specializes in.

You might also like:

How many phone calls does it take to reach a manager at your company?
http://bpo.123outsource.net/2013/11/02/how-many-phone-calls-does-it-take-to-reach-a-manager-at-your-company/

Outsourcing: why everyone is doing it
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Which countries are the best to outsource particular tasks to?

April 7, 2014 by 123outsource
Categories: Hiring & Firing, Popular Posts | Tagged , , , , , , , | Leave a comment

When you boil it down, is it about the individual company, its boss or its workers? Or is it more about the available labor pool in that particular country, and its cultural tendencies? The answer is that it is a little of both. Each country has different attributes. Thank god the world has so many countries, because to get anything done you need them. Can you imagine Danish pastries made by Americans? Or French Croissants made by Germans? What about Chinese food made by Koreans? It just doesn’t taste the same.

IT Outsourcing / Software Development Outsourcing
There are several countries that are good for this type of work. Keep in mind that the market can change abruptly if a single large company like Google decides to hire or fire in mass! Americans are the smartest at programming. We invented the computer and the internet in my state of residence here in California. But, due to market conditions, people are far too busy to be able to get anything done in a reasonable timeframe. Belarus, Ukraine, Romania and India are my best picks for getting outsourced software work done. These countries need more hours to do the same work that an American could do in fewer hours. But, at least they HAVE those hours. The

Europeans are reputed to be more careful about following directions than Indians, but there are companies (if you search hard enough) who are very nitpicky as well. If you plan on visiting these companies, the weather is nicer in India, especially during the winter. Shop around and test these guys out.

Call Center Outsourcing
India has a reputation of being big in this business. But, the sad reality is that they lack the social graces to maintain a client base. The Philippines, Kenya, South Africa, Costa Rica, Jamaica, and other Central American destinations are now popular picks for outsourced call center work. They have better accents, more graceful social skills, and the prices are reasonable as well. Indians might have an edge at technical support since they are stronger at IT tasks as a culture in India. India might be a good destination for Telemarketing since they are more aggressive than Filipinos. Once again, shop around and compare. Pick your agents by hand as well.

Data Entry Outsourcing
India leads the pack in this type of work, but I have not found so many companies that seem meticulous enough to do data entry outsourcing. I have no recommendations here other than to be careful.

Medical Transcription & Billing
It might be a better idea to find a US based provider that has staff members throughout the world. This practice is already commonplace. So, you can get the price benefits of outsourcing — without outsourcing, at least not outsourcing yourself! There are a few good medical transcription companies in India an the Philippines who I spoke to who gave a good impression so far in these industries.

Web Design
India once again has many Web Design companies with charismatic bosses who communicate well. Prices are low as well. But, don’t overlook Argentina. Please understand that the Argentinians culturally are great artists, and their web designers are no exception. My staff learned that they lack a business mentality in South America. The work is good, but quotas, schedules, deadlines, websites that actually have phone numbers, and other “being businesslike” characteristics are lacking down there! No country has it all, but the South Americans have great art skills and the warmest personalities in any hemisphere. Worth a try!

Accounting, Finance & Legal
India, in particular Delhi has many companies with very educated people engaged in Accounting outsourcing Finance outsourcing as well as LPO or Legal Process Outsourcing. Please keep in mind that the LPO companies cannot do all of the tasks that an American law firm can do, but they can do many support tasks at 30% of cost while you sleep.

Tweets:
(1) Finding the right country to outsource to is a combination of culture & cost effectiveness.

You might also like:

Outsourcing mistakes — pick your offshore service providers with care!
http://bpo.123outsource.net/2013/11/20/outsourcing-mistakes-pick-your-offshore-service-providers-with-care/

How to make sure outsourcing companies follow directions
http://bpo.123outsource.net/2013/11/06/how-to-make-sure-outsourcing-companies-follow-directions/

What are the best interview questions?

April 4, 2014 by 123outsource
Categories: Hiring & Firing | Tagged , , | Leave a comment

What are the best interview questions?

Too many people are asking interview questions where the answers are too obvious.

Q. What would you do if you won a million dollars?
A. I would come to work the next day, I love being loyal to my boss.

What do you expect them to say. So, I decided that I prefer personality questions where there is no correct answer.

How much would you spend on a house, and why?
How do you fit a giraffe in a refrigerator?
What attributes do you look for in friends?
What traits do you find desirable in an enemy?
What trait upsets you most about clients?

You can learn a lot about a person’s personality by asking these questions. There are also infinite ways to answer these questions.

Unfortunately, what I have found is that the people who did worst at my interviews did the best work. The people who were the most polished at the interview, failed to deliver good service. Please keep in mind that I was interviewing companies with more than one person. I am speaking of the overall output of a company.

When you boil it down, what really matters is if a company can make it through two or three small test projects of varying difficulty and a few test estimates. That says more about them than whether they have good techniques for fitting a giraffe in a refrigerator…

“Here Shelly… just stick your neck through that hole and I’ll give you these nice leaves… yum!!!”

Tweets:
(1) The best interview questions are more conversational than technical. See our examples!
(2) The best interview questions are not what you would ever dream of.
(3) Those that did best at the interview were good talkers, but not good workers. Hmm.

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It is not comfortable moving up the food chain
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Should you have slack in your schedule as a manager?
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Positively reinforcing good worker behavior and negatively reinforcing bad

March 31, 2014 by 123outsource
Categories: Motivation, Semi-Popular | Tagged , , | Leave a comment

As a manager, you do more than coordinate. You are like a football coach (disregard the pot-belly.) Your job is to motivate the troops, keep conflicts moderated, and keep life organized. Many managers are simply overwhelmed and have too much to do. They don’t have time to give feedback and are not masterful in doing so.

Many employees are sensitive. You can’t just criticize them or tear them apart. You have to be very diplomatic and cautious. You have to understand which types of mistakes are small ones and which indicate character flaws and a bad attitude. There is a lot of skill involved in being a manager.

As a manager, you need to first of all build up a foundation of trust and good vibes. You need to give realistic positive feedback on a regular basis (don’t over-do this.) Also, you need to establish a social rapport. This is not always possible with anti-social types, but some relationship building is a lot better than none. People will do better work for you and stick around longer if you are personally connected to them in a small (or large) way. The minute that relationship goes sour, so does the work in almost all cases.

Part of the reason you need that individual connection is to gauge their work based on how they interact with you. Even if you rarely check their work, you can quickly know there is a problem if they are evasive, unfriendly, or just plain hostile. Interaction is a measuring stick you can use to quickly know how a work relationship will go. In my experience it is 95% reliable although results can vary widely depending on the individual.

Knowing how much to dwell on the nit-picky positive or negative aspects of the employees work is a skill. Overdoing it can make people get a headache fast, and not giving any input can allow people to go on costly tangents. Balance is the key in business feedback!

Negative feedback is tough. Sometimes it is smart to disguise a criticism as a request.
“Could you do it this way next time? I prefer it that way. The way you did it is not bad, I just prefer it this way.”
Smart, you got the employee to do it right without hurting their feelings. Hurt a person’s feelings one too many times and you might have a huge bill to pay to HR to find you another when they quit prematurely.

How often to give negative feedback.
If someone really did something bad and you need to harp on them, make sure you have built up trust enough so they will be able to absorb your negativity and work with it positively. Relationships that last are those where 80%+ of assessments are positive and less than 20% are negative. That includes work and personal relationships. If you are a girl who always harps on every little thing your boyfriend does, you should just break up — it won’t last! Save your harping for when you need to harp because it does relationship damage. Look for good things to comment on when you are not thinking about positive commentary. You need a bank account of past positive comments to merit a negative poking session!

In any case. Your work is terrible!
You’re fired!
Just kidding!

Tweets:
(1) As a manager, you do more than coordinate. You are like a football coach (disregard the pot-belly.)
(2) As a manager, you do more than coordinate. Your job is to motivate the troops, keep conflicts moderated, and keep life organized.
(3) Many employees are sensitive. You can’t just criticize them or tear them apart. You have to be very diplomatic and cautious.
(4) How often do you give negative feedback? Do it too much & ur looking at a divorce!

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Are bonuses really the best incentive?
http://bpo.123outsource.net/2014/01/17/are-bonuses-really-the-best-incentive/

Being sensible realistic and safe is bad for business
http://bpo.123outsource.net/2013/07/11/being-sensible-realistic-and-safe-is-bad-for-business/

Call centers in the Philippines are getting more expensive than India

March 30, 2014 by 123outsource
Categories: Call Center, Philippines | Tagged , , | Leave a comment

Although the Philippines seems to be a country that is permanently cursed with poverty, prices for labor might seem expensive relative to India. The Rupee has been losing ground for the last several years. It went from around 40 per dollar to around 60+. Will this devaluation ever end? India has the corner on the market for price, but few companies have ever had a positive experience with an Indian call center.

The Philippines has over 1000 call centers. They are distributed all around the country. However, a huge percentage (roughly two thirds) are in urban areas near Manila such as Makati City, San Juan, Ortigas Center, Manila Proper, and Quezon City.

Call center outsourcing in the Philippines is not that old. It started in 1999 when Cyber City created an outsourcing facility in a former US Air Force base in Clark. That created a trend that really took off (no pun intended.) A decade ago, India had a huge lead in the call center industry, but now Philippines is #1 in line for being the biggest international outsourcing location for call center work.

Tweets:
(1) Call center prices in Manila are more than Mumbai due to fluctuating exchange rates!
(2) Call center outsourcing in the Philippines started in 1999 at a former air force base.

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How to gain traffic for your call center using pay-per-click
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How to get more call center clients using contracts
http://bpo.123outsource.net/2013/04/05/how-to-get-clients-for-call-centers-contracts/

Half a million Filipino call center workers are on American time

March 29, 2014 by 123outsource
Categories: Call Center, Philippines, Semi-Popular | Tagged , , , | Leave a comment

500,000 Filipinos live on American time! Their bodies are still in the Philippines, but could be said to be emotionally in the United States. They work and sleep on an American time zone. Additionally, they take their vacations when America is on vacation. Imagine celebrating the 4th of July in the Philippines! It sounds dreadful. Next, if disaster hits in a part of America, they become more involved with that snowstorm, power outage, or mud-slide than they would be if a tsunami or hurricane hit their motherland.

There is some sort of an emotional divorce that happens between the call center workers in the Philippines and “regular” folks. They just can’t relate to each other the same way after getting their call center job.

I have personal experience with this type of life. I sometimes will be on the phone with India all night for weeks in a row. I lived in India a few times before as well. But, this didn’t divorce me from our locals here in Los Angeles. I still relate to them the same way I did before. I relate to individuals — or not!

But, I think there is some truth to the fact that the first time in your life that you become immersed in a 2nd culture, a gap is created between you and your countrymen. There is just too much that you become familiar with that they know nothing about. It creates a huge division.

But, there is relief to having what I call a “bicultural gap.” In the Philippines they solve the problem by drinking beer, hard alcohol and consuming vast quantities of fried chicken! Maybe it is not the most healthy way, but they will figure that out when they get into their late thirties and forties!

Tweets:
(1) 500,000 Filipinos live, eat, sleep, and work on American time
(2) Their bodies are in Manila, but emotionally they are in the US #callcenterworkers

You might also like:

How to get more clients for your call center
http://bpo.123outsource.net/2011/05/05/getting-more-clients-for-your-call-center/

How to get more clients with a good salesperson
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Having a foundation in business for long term growth

March 27, 2014 by 123outsource
Categories: Management | Tagged , | Leave a comment

I was just listening to yet another Harvard Business Review interviews on their blog. Hearing their content is a relief from the endless reading I do on their site. The topic was having a foundation in your business.

Apparently, many companies in the USA provide services that compete on a global market. But, the cost for those services is somewhat high. Countries with less expensive labor can grow their business presence like weeds by capitalizing on their lower labor costs. This works for a while. But, what people don’t always think about is that labor costs are not static. Labor costs in China have gone up a lot, and will probably continue to do so. Currency rates in India have made labor a lot cheaper. The cost of labor is very unpredictable in a global market place making it foolish to bet on long-term cheap labor. The real estate market is equally unpredictable making your office or industrial space something that can really fluctuate in cost.

The moral of the story was that companies in stable places like Germany, America, or other wealthy countries may not always have the cheapest price, but there is an element of refinement. The workers have been doing the same work for a much longer time, and management structures have been in place much longer making them more stable. There is an element of efficiency in what these companies do which can often rise over time. Many American companies are using robotics and other high tech means which make them able to successfully compete against the Chinese whose labor costs are much higher than a few years ago, and who do not have the means to use robots.

In a sense, it seems like some of the poorer countries are hitting a growth ceiling. Maybe that ceiling is temporary, or maybe not. For them to grow to the next level, they will need to learn about efficiency, and building long term relationships, developing higher and more consistent quality standards, and a lot of other things as well.

I tend to think that China will make it even though they are having growing pains. India and the Philippines I am not so sure about. India thrives on doing everything in the most inefficient way humanly possible, and shows no inclination to break out of this moronic way of life. It will be impossible for them to ever become an economically comfortable country with this attitude. I call it inverse optimization!

Tweets:
(1) Developing countries with rising labor costs need to master the art of efficiency if they are to survive in the long run
(2) Developing countries need to understand that their real estate and labor expenses can fluctuate in either direction overnight!
(3) America is using robotics & successfully competing against Chinese manufacturing = a growth ceiling for China?

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Outsourcing: Why Everyone is Doing it. One Bizarre Example

March 25, 2014 by 123outsource
Categories: Of Interest, Popular Posts | Tagged , , , , , , | 1 Comment

Outsourcing: Why Everyone is Doing it. One Bizarre Example

One U.S. software developer who makes a six-figure income recently admitted–when he was caught–that he outsources his work to a software developer in China and spends his time relaxing and browsing various websites. The cost? A mere 20% of his salary.

Also, please note: it is entirely possible to get comparable if not superior work from an IT company in India or China. Cost is not the only factor.

This case demonstrates why companies outsource–and how tired and discouraged even successful Americans are with work. Many people assume that outsourcing is the cruel scheme of big business in the U.S. or that the government is at fault for promoting outsourcing to IT companies in India or China. But in this case, the developer had a great reputation and paying work–but chose to jeopardize his position by outsourcing to an IT company in China. In short, he did not want to work or was not able to take the stress that came with the job.

U.S. companies, fueled by Bureau of Labor Statistics reports, point out that, in 2013, there are 120,000 new IT jobs created for people with computer science degrees, by only a little over 50,000 new college graduates qualified to fill these jobs…which invariably get filled by workers from foreign countries with temporary visas. Outsourcing to IT companies in India and elsewhere will continue as long as American companies find there are not enough qualified American workers to do the job.

In our experience, for example, many high-end software developers in California outsource their work to IT companies in India, and have a variety of explanations of how their work gets done and where. According to fastcompany.com, the global outsourcing industry was a 1.6 trillion dollar success story in 2007. The Wall Street Journal, as quoted by thinkprogress.org, confirmed that the largest corporations, including “General Electric, Caterpillar, Microsoft, Wal-Mart, Chevron, Cisco, Intel, Stanley Works, Merck, United Technologies, and Oracle…cut their workforces by 2.9 million people over the last decade while hiring 2.4 million people overseas.” These figures do not include thousands of jobs outsourced to IT companies in India or China by smaller firms across the U.S.

In addition to IT companies, Call Centers in India and Data Entry in India are getting a huge share of the global outsourcing market. Recently, Call Centers in the Philippines and South Africa are also popular outsourcing destinations.

Tweets:
(1) There are 120,000 new IT jobs every year, but only 50,000 new people to fill those jobs
(2) There is a growing shortage of programmers in the USA, and outsourcing fills the gap
(3) Programmer outsources work to China for 20% of salary!
Next: Outsourcing bedsores he developed from lying around
(4) Only 50,000 U.S. grads qualified to fill 120,000 IT jobs for compu-sci majors. Foreigers w/temporary visas love IT!
(5) Global outsourcing industry raked in $1.6 trillion in 2007! That’s almost enough to pay someone else 2 do the raking
(6) Big U.S. companies have given the boot to 2.9 million & hired 2.4 million overseas! The boot wasn’t even made in US.
(7) India BPO’s are getting a huge share of the global outsourcing market. Forget India ink. We’re talking India Inc.
(8) Programmer outsources work to China for 20% of salary! Next: Outsourcing free time with family driving him crazy!

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