3 ms·
tl;dr: outsourcing doesn't work anymore because the salaries in third world countries are way higher than what it used to be
by ishener 11y ago
tl;dr: outsourcing doesn't work anymore because the salaries in third world countries are way higher than what it used to be
- michaelt 11y agoI think the real tldr is: Outsourcing companies and their clients have incompatible incentives; because the outsourcing company only keeps getting paid as long as the project isn't finished/delivering value to the client.
- ocean3 11y agoDepends on the payment model. I sometime do freelance work for friend. You would get clients who have a fixed budget but not a fixed scope.
- TeMPOraL 11y agoYeah. I always found it weird that outsourcing actually is a thing, because misalignment of values is pretty obvious. I will guess that the company doing the outsourcing is usually also burning someone else's money to fund the project.
- deanCommie 11y agoExcept that would've been always true. So the "anymore" part is purely clickbait. The truth is Outsourcing never worked. But it was cheap enough that it could have been considered a worthwhile attempt at cutting cost, even if it ended up costing more with re-writes it was justifiable. Now, you can't justify even attempting it given the high risk of failure.
- spacecowboy_lon 11y agoAnd some UK Banks have had very high profile failures (the RBS fiasco) ie the CEO gets Grilled in parliament.
- reustle 11y agoThat's a pretty broad generalization. The maintenance contracts I have in place with my clients incentivizes us to build software that doesn't break and requires minimal maintenance.
- asgard1024 11y agoIf that's the reason why outsourcing doesn't work, why employment does work? I think this is the flaw in the article. Perhaps outsourcing and employment do work, but it's always better to hand the job to somebody from local culture or to your friend/family. At a higher price, though.
- tonylemesmer 11y agoThe nearer they physically are the more incentive there is for them to not cock it up.
- asgard1024 11y agoI think you can generalize it like that, although maybe it more depends on type of relationship you want to have; physical proximity is only a proxy for that. Perhaps building a more robust reputation systems is a true way to get a more efficient economy.
- scardine 11y agoHere in Brazil the US Dollar is 1:4 to the local currency (and the value is raising), so right now the exchange rate is really favorable to a customer in the northern hemisphere. Not only the labor, real estate assets and companies are beginning to look very cheap for foreigners.