10 Annoying Things Freelancers Do to Destroy their Business

I have been working with freelancers through out my career and recently, thanks to services like oDesk, I find myself doing it more often. So you might think that I am happy with what I get, at least in general. Well, one of the reasons I continue to stay engaged is my high tolerance for pain – I am prepared to go through piles of hay to find that needle. And I have to tell you, looking for freelancers is very much like digging for gold – you literally have to go through tons of dirt to find it.

Interestingly enough many freelancers who have skills, knowledge and maybe even talent often torpedo themselves, aggressively sabotage their chances of getting customers right in the begging of the process. They make simple yet lethal mistakes that turn off clients before they got the chance to learn about freelancer’s ingenuity. Of course many mistakes could be made during execution of the project as well as its closure. I am not talking about technical or skill set issues though, my focus is on soft behavioral aspects of your communications with the client. Below are some of those mistakes:

  • Not reading my project description before replying to it. Your three page long template proposal will get in a recycle bin faster than you would think. At least adjust your opening statement, show me that you read the post…
  • Not using proper grammar and spelling. English is my second language and still a work in progress; I still struggle with grammar myself, yet many proposals I see push that envelope way too far. Grammatically poor introduction screams in my face “Communicating with this freelancer will be a real pain!” Spelling mistakes are even worse – how can I entrust my project to someone who doesn’t even make an effort to turn on a spellchecker?
  • Talking with me like I am a teenager. Your slang (especially when combined with ESL marvels) comes across as complete lack of intelligence and class. By the way, spellchecker is not likely to recognize your “gonna”, “wanna”, “gimme”, take a hint. Let me clarify this point – after you established rapport you may find that your client is using colloquial language and slang, following the suite in this case could be OK, still not when you put your words in writing.
  • Being excessively polite. Your culture and language might require twenty minutes of praise and compliments before you get to business but I am an American, cut to the chase guy. More so, being overly polite and using somewhat unusual forms will telegraph a wrong image, your mentioning my “ultimate wisdom” only makes me think of a snake oil salesman.
  • Not being punctual / prepared for your interview. I think of proposal / interview stage as a “honeymoon” in a relationship with a freelancer, it all goes downhill from there. Late for your Skype call? Having troubles finding your headset? Can’t introduce yourself? Chances are that’s the last time you’ll hear from me.
  • Bidding too high or too low. Even though I can understand motivation of people bidding high or low, I typically ignore the bids that stand out in that respect. It’s probably clear why high bid is a losing proposition: unless you got the market cornered the price does matter. Less obvious is a low bid. The main issue here is trust and the fact that we as buyers have been conditioned to expect a “catch” or “bait and switch” with a low bid. Maybe $2 an hour is a perfect wage for combination of what you sell and your standards of living, yet if everyone else bids $15 or higher you should stay in ballpark otherwise the chances are your bid will be ignored.
  • Not following though. Few things annoy me more than a freelancer responding to my post and then dropping off without note / returning my questions. Maybe you realized that I am not the right customer / the project is not in your sweet spot / whatever. It’s perfectly OK to bail out from bidding process, just don’t forget let you customer know. A simple “regrets” note can do a lot for you on a next opportunity that could be exactly what you are looking for.
  • Telling me that you know what I need better than I do. That for some reason is particular common for developers from Eastern Europe and particular from my motherland Russia. If you indeed know (which is highly unlikely) suggest, illustrate, propose – don’t push, don’t fight with me, I get enough fighting when I tell my clients that I know better.
  • Playing games with scope / rates / budget. For many of us on a buyer side many of these games are transparent, most us who’s been in the industry for over 5 years seen at all – “bait and switch”, “low ball”, “door in a face” – you name it. As a matter of fact we make purchases and are being sold on daily basis. We get occasionally burned, sometimes badly. In stock market, real estate, cars, utilities… And when we come to work last thing we want to see is someone trying same techniques…
  • Leaving debris behind. That is my personal pet peeve. Just a few days ago I was looking through code deliverables from a freelancer who just finished a small RoR project for me. Looking through the code I found plenty of loose ends such as hard coded ID addresses, uncommented debugging code, etc. That was the first project this particular freelancer got from me and it is the last one.

I can go on and on, ad infinitum ad nauseam, but I’ve reached my self imposed limit of 10 bullets. I might revisit it later though.

BTW, an initial version of this post posted as a guest blog at oDesk blog got some harsh critique for grammar and other language mistakes I made from Nancci Maloney, probably on of the oDesk freelancers:

Sir, I understand some of your frustrations, but –

If you are going to criticize someone, you need to be sure your own house is in order. You state your second pet peeve is not using correct grammer and spelling.

Look at your 1st bullet – it’s a recycle ‘bin’ – been is a verb. If you had ‘read’ through your post you would know ‘red’ is a color.

2nd bullet – your English is ‘a’ work in progress – sort of changes the meaning of the sentence. If you still ’straggle’ with concepts then you need to look up struggle in the dictionary.

Why would I entrust my paycheck to someone who can’t use spellcheck?

There are other lesser grammatical errors in your post but I think you get the idea. My mama always said people in glass houses shouldn’t throw stones. It’s pretty sound advice.

Not sure if you noticed there are two spelling errors in Nancci’s comment.

So let me apologize in case some of those niximorons are still in this post and suggest that you should “do what I say not what I do” :)

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Twitter – a New Tool in my Offshoring Toolbox

Eric Pan asked an interesting question on Linkedin – “Other than IM, email and phone call, I am thinking if twitter can improve communication with offshore teams in software development. Do you have any success story to share?”

The immediate reaction of the community was quite negative, e.g. “…the security is horrible and the 140 character limit (as noted in other answers) precludes its effective use… ” or “ … It will be a big distraction. I am not sure how you envision project communication…” I am afraid people behind these answers totally missed the point. I found the question rather thought provoking and after giving a few minutes of attention came to conclusion that twitter could be a rather helpful tool in some type of outsourcing / offshoring projects.

Twitter is quite a new phenomena and in its buzzpower its is successfully wrestling with Facebook and Google, it remains to be seen how rich he’s going to make its founders and whether it will stay for a while or fade away like many fads of the net era.

So far I had a few attempts to become a regular twitter and found neither pleasure nor purpose in it. Some say it could be helpful for my blog promotion, some suggest that it’s mandatory for building your personal brand. Not sure, I will probably give it another try… but that is not the topic here.

On the other hand communication is a backbone of offshoring engagements. One can not overestimate importance of communications for running teams of all kinds, 100 fold so for distributed ones. So if there is a tool that helps in communication processes it at least is worth careful consideration. There are plenty of tools we already have at our disposal – face to face meetings, phone conf calls and one on one discussions, email individual and group, intranet, wiki and sharepoint, chats, do we need another one? Well, is there a gap that needs to be covered? Probably there is none. Is there some way to improve current coverage, I bet!

Going back to twitter origins – it is all about status reporting. What are you doing? In technolingo that translates to What are you working on? Or What is your current status? That makes total sense. Skype chat is for discussions and instant updates. Twitter provides a vehicle of distributing status updates to a group of people in rather non-invasive form without clutter and overhead of email. The follower model is a solid alternative to to:/cc:/bcc: where the sender has to determine distribution list, putting the distribution in the hands of the receiver makes a lot of sense in a group setting.

Are there limitations to twitter – oh boy, where do I start? – but that’s not the point, if instead of nixing the idea for the tool limitations you take a proactive positive look you suddenly find many features that could be indeed very helpful.

I see a good fit to use of twitter in several areas of my offshore SDLC, for example milestone notifications on regression test runs, build reports, etc. There are also multiple possibilities in other areas, take for example production support / uptime notifications…

Not too long ago tools like YIM or Skype were considered bad practices and were banned from corp. IT world, for exactly the same reasons my distinguish LinkedIn colleagues are bashing Twitter today. Will see how this one pans out… let’s reconnect in a year or so?

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Slowing Down, no Intentions to Stop

This month has been exceptionally busy for me and I had almost no time to put against anything but my day job, unsurprisingly so my blogging debt started to grow at a pretty good pace. There were a plenty of articles published in the blogs I follow, many industry news worth discussion knocked on the doors daily, and despite serious slowing down in the rate of posts I saw a notable increase in traffic.

When it comes to blogging I face a few serious challenges, first of course being ESL. As a matter of fact ESL has been a huge mental obstacle to overcome, it took a lot of internal and external pushing before I could step over the fact that I won’t be able write to even my own standards of quality needless to say to the benchmarks established in technical blogosphere by top notch professionals.

Other ones were concerns so typical for a techie:

  • I can talk at rate of 100 words a minute with occasional gusts of 250, but when I put my thoughts on paper the productivity drops 100 fold.
  • Talking towards invisible audience and literally no feedback and total absence of control over that audience really freaks me out.
  • Concerns about spilling the beans in so many aspects of our work and educating vendors and competitors.
  • Copyright / IP concerns. Many of the items I cover related to projects I’ve done as work for hire – how far can I push that envelope without compromising my integrity – which is by far one of the most important aspect of our professional image
  • Position concerns – what if I change my opinion tomorrow? Image concerns, and many many others…

Of course like anyone else I also have to deal with shortage hours in a day, occasional writer’s blocks and gazillion of other challenges any blogger deals with.

When I realized how much time blogging is going to take from my day and how unproductive I was my visceral reaction was to follow my management approach: do what you do the best – delegate the rest. And I decided to hire a ghost writer. In theory it appeared like a great idea – I just tell a ghost writer what I think about a particular topic and s/he will write it up… In theory there is no difference between theory and practice, in practice there is. My fabulous idea did not work out, not for the lack of offers though:

I put a project request on several freelancing sites (see those plus more on my list of places to find freelancers). I got more offers that I could look at in just a few days. The price varied from $2 to $50 an hour. Many of writers who replied to my post did not even red the post, some did not understand it. The remaining minority either asked for rates I could not possibly afford or after a brief discussion with me bailed out. After I went though ~100 bids there were a couple still standing, and they only made me realize that time-wise I won’t see any savings and the only thing I could benefit by using a ghost writer would be grammar, SEO, and other important yet secondary aspects.

So I ended up in square one with a notebook in my laps blogging away while BARTing. The last couple months brought more and more to my plate. Isn’t it strange that poor economy, slower business and a fewer opportunities do not mean less work? So even my office commute doesn’t offer much time for pragmatic outsourcing. But I have no intentions to stop, at least yet. There is still so much to cover…

Search for SWAT

There is famous French expression cherche la femme (find the woman) implying that behind a cause of almost any event there is a woman (well, in its most common meaning the phrase has negative and sexist connotation). Cherche La SWAT or “Search for SWAT” is an approach I have been using and recommend others to use when selecting an IT service partner, offshore vendors included.  I honestly believe that behind almost any success in our industry there is a SWAT team…

A couple days ago I had a pleasure of meeting with two guys who’s been running their local technology shop for quite some time now. Both were top notch developers who’ve been in the industry probably at least as long as I, maybe longer. A bowl of outstanding Pho in a greasy spoon Vietnamese restaurant, college campus attire, and potential partnership created special ambiance that is particular conducive for nerd bonding.

After quick introduction and buzz word exchange we realized that we were only a degree apart and for awhile were working for startups that we fiercely competing with each other. We laughed through tears talking about how a company with 2 developers and 12 marketers and no product can put out of business a superb product with 12 talented engineers and 1 marketer behind it and then after sharing similar stories about dot com bust and being screwed by VC and CEOs we finally dove into discussion of technical capabilities of the firm my hosts were representing.

It is amazing how quickly these two guys who are as remote to sales and marketing as naïveté to Capitol Hill were able to give me a sense of comfort in their services and products. I guess many sales guys can take a few tips from these nerds. Well, faking competence takes a lot of competence and thus no need for faking ;)

Probably the main reason for such instant connection was a common mind set and similar language even though spoken with very different accents. What was the most important is that these guys had very similar pitch to what I have been using when promoting my services for very long time. These two guys were representing a SWAT team – Specialists With Advanced Tools.

There are many SWAT team out there, yet they are a tiny minority in the vast pool of IT resources. There are a few things that are common between SWAT teams, in particular they

  • are typically comprised of top notch professionals with substantial experience or/and IQ off the charts;
  • are typically specialized shops with individual contributors not making claims outside of their domain;
  • often are small in size and tightly knit teams, many of their members have history of working together possibly in some other firm(s).

SWAT team pitch is typically around results, quality, and productivity. In development arenas they tend to offer veni, vidi, vici model – pragmatic approach to delivering the product and no concern for recurring tasks, when it comes to providing ongoing services they are typically very pragmatic and process oriented. They do not tend to dazzle you with marketing materials and prefer to quickly cut to the chase. If they want to show off anything than it’s typically their weapons – advanced tools – for example a development framework they developed and refined over the years.

Besides obvious benefits of SWAT teams (efficiency, reliability, focus, etc.) there are a few exceptionally important aspects that set SWAT teams apart from a majority of service providers including most prominent companies. To some degree you can call those aspects “advanced tools” as well:

  • Established network of technology leaders and individual contributors of all ranks.
  • Time and scale proven technologies, solutions, libraries, patterns, and reusable components.
  • Best of breed technology tools as well as process, policies, and methodologies.
  • Established relationships with software and hardware vendors.
  • Established partnerships with consulting organizations and offshore providers.

I hope by now I made it obvious that SWAT teams are the teams to find and work with. The trick is the “find” part since there are not that many of them and plus there are plenty of imposters. To a large degree that is very much like for employees – “looking for people is very much like digging for gold, you literally need to go through tons of dirt, but you are looking for gold, not for dirt.”

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Using Freelancers: Pros and Cons

I work with freelancers on many tasks / projects and find using freelancing force very meaningful in many aspects. I have been working as a freelancer myself on and off as well, so to some degree I have a double insider view on IT freelancing phenomena.

So when I run into an old and rather popular article 101 Reasons Freelancers Do it Better I was compelled to comment; yet while reading I realized that regular comments just won’t do it. I saw that I could play devil’s advocate pretty much on every point made in the article, e.g. just a few random notes

Reasons to Freelance Nick as Devil’s Advocate
Save on child care: Instead of paying for full-time care, you may be able to cut care back to part-time hours or even work out a schedule with your spouse that allows you to eliminate child care altogether. Oh yes, and all the money you lose by shortening your work day. And of course the quality of your work will skyrocket with kids hopping around and helping you type.
Your level of career-loathing spending is reduced or eliminated: Expensive vacations, trips to the spa and gallons of fruity alcoholic drinks are often indulged in because of a need to release work- related stress. Freelancers are generally happier and more satisfied by their work, so
this type of spending is not as prevalent.
Absolutely. No career thoughts, aspirations, politics, anxiety – total nirvana. You probably should take it even further, drop working altogether. That will be especially helpful in releasing stress that comes from freelancing commons such as waiting to be paid, bidding against 10,000 me toos, being screamed at by a client.
Diversity: Instead of doing the same thing day in and day out, you can pick up a variety of projects to keep you occupied. That’s phenomenal – learn java today do graphical arts tomorrow, learn one customer’s domain and apply it some other. Become a pinnacle of multi talent – Jack of all trades
and respected master of None…

I guess any Smart Alek can do the same and it would be much more meaningful to look at the freelancing as an option from a VPE’s standpoint. Freelancing is a complex phenomena and covering it in detail could keep a few very prolific bloggers busy. Take for example a look at freelanceswitch.com For this post let me take a high road and cover only some of the main Pros and Cons of Freelancing:

Pros of Working with Freelancers

  • No job is too small is a common freelancing motto. So when you need things like light graphic touch up, setting up a yahoo store, basic SEO services, etc. using freelancers is often the best option. You can have the entire project done by the time a sales team from a large agency schedules initial meeting with you.
  • One of great advantages of sourcing through freelancing is access to a huge pool of resources. Nowadays with powerful aggregators / directories of freelancing resources such as odesk.com, guru.com, and elance.com you can probably find almost any specialty or skill you may need. See the list i compiled so far.
  • Nimble, fast and flexible freelancing community caters to ever changing needs of businesses quite well. The difference in turn around time between freelancers and even small service oriented companies is staggering.
  • Low commitment on your part combined with a large resource pool caters toward disposable outsourcing model exceptionally well (read more about disposable outsourcing ).
  • One of the unadvertised benefits that a freelancer could offer comes from cutting corners and that could offer some huge short time benefits – need someone to pull an all-nighter to push a change to production, need access to some expensive software and ready to close your eyes on it’s being properly licensed, want to build a prototype without going through mandatory steps required by corp. SDLC… all that could be done with a right freelancer(s) on the job.
  • Competitive pricing – sometimes cheap, sometimes ridiculously expensive freelancers bring great competitive offering to the market place. The price freelancers can charge is market regulated and fluctuates with market; it includes minimum overhead and typically is substantially more competitive than the rates offered by outsourcing companies.
  • Many solid talented professionals end up or start up as freelancers because their true passion for what they do and that makes them so much fun to work with. I had a pleasure of working with amazingly talented freelancers in all areas of creative and technical aspects of IT – writers, graphical artists, developers, and security pros and I can not even start to describe how much their passion for work elevates the quality and productivity not to mention positive energy they radiate…

Cons of Working with Freelancers

  • Some jobs are just too big for freelancers to handle. That is a fairly obvious issue, more so, there is an important aspect to it as well – some jobs grow to be too big for freelancers to handle. That is potentially a serious trap. You start with something that appears to be a freelancing sweet spot, the spot starts to grow (scope creeps, a few cans of worms get opened, etc.) and before you know the project is out of control…
  • The word freelancer starts with “free”, not with “process” or “restrict”, and that reflects something you have to be prepared. Following strict SDLC or other processes is not typically freelancing MO. That could become a serious obstacle in project delivery, significantly reduce productivity, and in general annoy the world out of you.
  • On a similar note even basic discipline is not exceptionally common among freelancers. I guess working on the project while at home wearing your PJs affects the mind set and eventually bleeds into all aspects of professional life. Creative arts freelancers are in particular notorious for being casual in treating basic obligations – they are late for meetings, miss due dates… and sometimes (that’s my favorite) forget to bill you.
  • Finding good freelancers even with help of marketplaces such as oDesk.com or Guru.com is a challenging task. Just recently for one of my projects I needed to find a few bolggers, that seems like a no brainer, there literally millions of them… well that’s a part of the problem – you end up dealing with a lot of spam (people that reply to you post without even reading it), a lot of people who are not remotely qualified, and so on.
  • Quality of freelancing resources is very much a gamble. In my experience for every gem you have a several dozens of pebbles. It is in particular notable for short ramp up technologies and skills like “web developer”, “blogger”, etc. Pretty much anyone with PC and internet connection can claim to be one of those. With the short nature of freelancing projects by the time you realize that you got someone with no substance or skill half of your budget is gone.

Freelance workforce is just one of the tools in tech leader’s portfolio. If you apply the tool to the right job and handle it with care you can achieve some pretty impressive results. It is a powerful tool and could bring a serious damage if used by someone who doesn’t know how to use it though…

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Negotiations – Basic Categorization

Negotiations are an integral and common part of our lives; we get involved in negotiations many times during a regular day sometimes not even noticing that. We negotiate with other drivers when changing lanes on a highway, with kids when picking a channel on TV, with boss when asking for a vacation, and of course with offshore vendors almost every step along the way of an offshoring engagement.

There are many different forms of negotiation and many forms of communications that might appear or be considered negotiations but in fact are not. So let me put a basic categorization in place:

Dictating is a form of communication that has hardly something in common with negotiations as it typically “one-sided”:

  • One party has a power of the other(s).
  • Often the party that is being dictated to has nothing to gain from the agreement.
  • Typically one party makes the decision.
  • You may consider dictating your decision when there is not alternative communication means, interestingly enough that would be rather unusual situation.
  • In offshore engagement dictating as a method of communications should be only considered in a corner case situation such as when the parties are under tremendous time pressure.

Influencing is a form of communication that is by far better way of enforcing one’s opinion than dictating. Influencing doesn’t equal negotiations, it is often used as one of the negotiation techniques.

  • Typically one party has a power of the other(s)
  • Depending on situation and reasons behind influencing the party that is being influenced may have nothing to gain from the agreement.
  • Typically one party makes the decision.
  • Influencing is an exceptionally powerful way of getting what you want; there are many techniques of influencing worth stand alone discussion.
  • In offshore engagement influencing can be used in many dimensions and situations, in particular as one of techniques in the negotiation processes, especially if the parties are far apart and time pressure is manageable.

Violent Agreement is an all too common form of communications. It is amazing how often you see violent agreement discussions on variety of topics. In general violent agreement has little to do with negotiations besides the fact that it is often a part of those…

  • Both parties agree on the approach but not aware of it.
  • Agreement is not recognized or not apparent.
  • Typically there is an implied need for a discussion that keeps parties involved.

Haggling is a basic form of negotiations. I use this term to highlight somewhat primitive nature of the process. At the same time haggling is the “mother” of all negotiation techniques, rules and processes.

  • Typically there is give and take from both sides.
  • Haggling often have unrealistic low and high asks.
  • Typically related to something very specific, like money.
  • Most often haggling is single-threaded – involves a single topic / resource.
  • Haggling is common for offshore negotiations, all too typical I’d say. Most commonly it is related to rate. Often a very primitive rude form of haggling emerges from professional negotiation gone sour. Sometimes it stays disguised as win-win-negotiations sometimes the parties do not bother to pretend. In any case

Win-win negotiations is an ultimate form of business negotiations also known as “building value” negotiation approach. I will put a stand alone post or a couple on WWN in a near future.

  • Finding a way for both parties to gain something from an agreed upon solution.
  • Typically both parties have something to gain.
  • Often used in circumstances where both parties have approximately same level of power.
  • WWN is one of the best ways to address any complex negotiations.
  • In offshore relationship WWN approach could be used in almost every aspect of relationship, with negotiation of the outsourcing agreement being a great example.

In real business life negotiations often fall somewhere between pure forms of haggling and WWN and borrow some elements from other communication forms.

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Japanese Car Invasion vs. Offshore Outsourcing

In the early 1950s a small number of Americans began purchasing foreign cars after military personnel brought home unique vehicles at the end of their tours overseas. At roughly the same time the Japanese, in need of cash to re-build their country after World War II, went from exporting cheap household products and novelty items to heavy machinery and automobiles, both much more profitable.

In the mid-fifties, the Japanese Ministry of International Trade (MITI) and Industry provided strong incentives to manufacturers to produce a “people’s car”. In the mid-sixties, in order to increase Japan’s competitiveness in the world car market, MITI engineered a number of mergers of car manufacturers. In many ways, the modern Japanese motor vehicle industry was the creation of the Japanese Ministry of International Trade and Industry (MITI). Nissan acquired the Prince Motor Company and Toyota merged with Hino and Daihatsu. The results were spectacular – in 1962, Japan was the sixth largest vehicle manufacturer in the world and by 1967 it was the second largest.

Initially Americans, who had become used to the poor quality, but cheap, Japanese products, did not take Japanese cars seriously. But Toyota, Honda and other Japanese companies worked hard to change the perception and the `products; top level engineering design combined with new techniques and mythologies such as TQM and Lean Manufacturing produced less expensive and higher quality vehicles. To a growing number of Americans Japanese cars started making a lot of sense.

In meanwhile with the oil embargo of 1973, along with the strict pollution controls and safety regulations imposed by the U.S. Government, American manufacturers turned to cost savings resorting to building poor quality, poorly engineered automobiles. While American automotive industry was entering a self-inflicted death spiral Japanese engineers and workers continuing producing better and better cars. Inevitably Japan surpassed the US to become the largest manufacturer in 1980. And, then in less than two decades “For the first time since the early 1930s, General Motors cannot call itself the world’s largest automaker. Its sales fell behind Toyota in 2008, a year when G.M. celebrated its 100th anniversary and narrowly avoided a bankruptcy filing amid a significant downturn in the economy.

If you call the USA your home chances are you know that many factors played in that half a century long story of failure – inflated comp. packages of the industry execs, the unions, the cost of healthcare – just to name a few. It doesn’t make it any easier though to see the companies that produced Mustang, Corvette, Caravan and many other trendsetting and groundbreaking automobiles crumble to pieces.

Another very similar story started unraveling in front of our eyes in the early 90s. This time it affected many industries in a horizontal fashion. This time invasion initially came from several countries with India leading the pack. The invasion was going on multiple fronts and affected other countries beside US. It is called many names with Business Process Outsourcing (BPO) being the most popular. BPO covers many aspects of business with Information Technology being one of the prime targets.

In large degree India was perfectly positioned for a blitzkrieg: a great multitude of factors were there to ensure that invasion is fast, massive and irreversible: English, sheer numbers of qualified resources, cultural proximity, ease of migration, huge difference in the standards of living, and so on. Y2K craze presented a perfect opportunity for dramatic expansion… Considering the pace of the invasion and the circumstances it is amazing that the US IT industry is still around. Fortunately for many of us a few things went wrong and we still have our IT jobs… Some of those (mis)fortunate events had their roots in India some in the consumer countries, some are still going on at the same pace, some increased in influence, some faded away. Let me mention just few the most notable ones:

  • As with almost any gold rush activity “take money and run” (TM&R) attitude prevails. Many outsourcing businesses are proud of being profitable from the day one. Funny enough, that is one of strong indications of exactly the attitude. Being profitable from the day one typically means no substantial initial investment and/or exorbitant margins – both being clear symptoms of TM&R. TM&R attitude inevitably lowers customer loyalty and creates negative drumbeat; it is one of major reasons behind “bad name” of outsourcing.
  • Historically many offshore shops were created by “intermediaries” people with strong connections in say India and business connections in the States. I’ve seen many of those companies in mid 90s doing exceptionally well, some of them even made it to the top of lists such as INC 500. Underneath the marketing collateral they were just labor brokers connecting “human resources” with hungry resource consumers. The brokers were naturally interested only in “putting buns in the seats” and that was another contributor to the offshoring “bad name”.
  • Surging demand on the IT services created a tremendous opportunity for entrepreneurial minds of all sorts. All kinds of entrepreneurs went after huge profits whether they had skills or not… What happened in the offshoring industry during mid 90s makes me think of backyard steel furnaces of The Great Leap Forward. Every one and their brother were opening outsourcing outfits. To no surprise the results were akin to slabs of pig iron. And who was there to tell the difference between pig iron and carbon steel?
  • Ranking IT services is far from a trivial task for many reasons. One of the fundamental problems is that low quality of IT service could be hidden for years before it is recognized, think for example about billions of lines of code that had to be rewritten to deal with Y2K issues, many of them were written in 70s and 80s… Another inherit problem is “fox guarding the henhouse” so typical for large IT implementations. One more, very significant, is obscurity of IT issues for many business users; that one alone creates unlimited safe heaven for mediocrity and makes objective ranking exceptionally difficult if not impossible.
  • Fueled by great demand and lack of selectivity in the market offshore offering was gaining volume fast and by all means possible. Inevitably the quality of goods sold was dropping at similar rate. Lowering the bar affected the entire industry, even the most exclusive educational centers and other time-proven benchmarks of quality stopped working. For example not long time ago I had to fire a consultant for incompetence; it’s not such an unusual nowadays. Yet in this case it was, my team was stunned with the degree of his incompetence which was especially surprising considering that he had a masters degree from IIT.
  • As they say if you take a barrel of honey and mix it with a gallon of garbage you have a barrel of garbage. Despite large number of high quality of resources the overall quality of offshoring team was far from impressive and inevitably the quality of the services rendered by those teams was far from perfect. While many vendors recognized the problem and stared putting processes in place to ensure meeting reasonable expectations the “bad name” was building up. Producing redundant inefficient code was now attributed not to individual programs but to Indian developers as whole. New clichés were firmly established in the industry.
  • IT offshoring was there to fill in a burning need so despite the mediocre quality of the product the demand for it was not going down. Offshoring issues and challenges were bounced around mainly deep in the trenches and kitchens. The decision makers, movers and shakers were on a purchasing spree sometimes going offshore against any sense, outsourcing for the sake of outsourcing or just with no rhyme or reason. Call it a user error but nevertheless it contributed to offshoring large scale failures and “bad name” in a huge degree and cost buyers and their countries enormous amount of resources in out of pocket expenses, erosion of work force, and loss of knowledge pool…

All these (mis)fortunate events generally result in decrease in quality of services and productivity of resources with one common denominator – cost. However the difference in standards of living and thus average wages continues to be dramatic allowing offshore vendors still successfully compete in the market. However it is much more balanced competition than the one that delivered mortal blow to the US automotive industry. Engaging IT resources from allover the world in order to address needs of local organizations continues to be one of many powerful tools in hands of VPEs, CIOs and other IT execs. It is highly unlikely for offshore resources to displace or ruin local IT industry. Yet empty houses of Detroit should ring as rude reminders of fragility rather than invincibility of the IT industry as well.

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