Op-Ed Columnist: What Goes Around . . .

[Owen Densmore]

An interesting comment by Tom Friedman about the outsourcing of tech
jobs:
        http://www.nytimes.com/2004/02/26/opinion/26FRIE.html?hp=

An interesting take is that at the core of all this are US products:
computers, software, even air conditioning!  Basically its an
inevitable side effect of our huge technology buildout is that India
and others are going to put them together in interesting enterprises
that involve "taking" jobs from the US.  In many examples, however,
there are more than US managers in the loop.  One included animation
experts.

Interesting article.  But I still find myself puzzled at how we're
going to get the job growth back up here in the US.  I don't think Bush
has a lot to do with it, and certainly Kerry is about as lame as they
come so won't help.  Its likely not a political issue but a
finance/economy one.  And, yes, they have political components but not
entirely.

Owen Densmore          908 Camino Santander       Santa Fe, NM 87505
[hidden email]    Cell: 505-570-0168         Home: 505-988-3787
AIM:owendensmore   http://complexityworkshop.com  http://backspaces.net

[Parks, Raymond]

Owen Densmore wrote:

...
> An interesting take is that at the core of all this are US products:
> computers, software, even air conditioning!  Basically its an inevitable
> side effect of our huge technology buildout is that India and others are
> going to put them together in interesting enterprises that involve
> "taking" jobs from the US.  In many examples, however, there are more
> than US managers in the loop.  One included animation experts.

   There was a thread on /. (last week?) in response to interviews of
Indian programmers at LinuxAsia 2004
<http://interviews.slashdot.org/article.pl?sid=04/02/17/1654255>.  The
interviews had some interesting takes - apparently most of the
out-source workers expect that as time goes on they, too, will be
out-sourced by the Philippines or China.
   One comment in the resulting thread was very interesting to me.

"So what we really have is this scenario:
     1.  US software companies tend to exist in Silicon valley, Orange
County, San Diego County, and Boston. These are also the most expensive
places in the country to live.
     2.  US software companies don't seem to want to allow telecommuting
when their employees live within driving distance of work. They
certainly don't want to allow it when the employee lives in, for
example, Kentucky.
     3.  That means that the employees need to make wages high enough to
afford housing in these markets. How do you pay a mortgage of $2500 to
$4000 a month if you're not making $90k to $120k a year?
     4.  The US employees average car loan cost him $350 a month, plus
auto insurance, plus gas (which hovers around $2 a gallon here in
California).
     5.  So the US employee has NO CHOICE but to live in the expensive
part of the country because the companies are too short sighted to see
the benefit of letting their employees telecommute from places where the
cost of living is cheaper. And yet isn't this EXACTLY what outsourcing
is? It's just hiring employees who telecommute from a place where the
cost of living is cheaper.
     6.  Therefore: US employees must have higher wages to maintain a
middle class standard of living that would cost 30% to 50% less in other
areas of OUR OWN country.
     7.  Employers then make the dumb-ass decision that "US programmers
are too expensive" and they move the jobs offshore to India instead of
using any of the easily available and less morally bankrupt cost cutting
tools available to them."

   Before I read that comment, I had not realized the true irony of the
situation.  I know that I've had software companies turn me down because
I wanted to live in New Mexico and telecommute.

--
Ray Parks                   [hidden email]
IDART Project Lead          Voice:505-844-4024
IORTA Department            Fax:[phone]
http://www.sandia.gov/idart Pager:800-690-5288

[John Hellier]

--- rcparks <[hidden email]> wrote:
>    There was a thread on /. (last week?) in response
> to interviews of
> Indian programmers at LinuxAsia 2004
>
<http://interviews.slashdot.org/article.pl?sid=04/02/17/1654255>.

>  The
> interviews had some interesting takes - apparently
> most of the
> out-source workers expect that as time goes on they,
> too, will be
> out-sourced by the Philippines or China.
>    One comment in the resulting thread was very
> interesting to me.
>
> "So what we really have is this scenario:
>      1.  US software companies tend to exist in
> Silicon valley, Orange
> County, San Diego County, and Boston. These are also
> the most expensive
> places in the country to live.
>      2.  US software companies don't seem to want to
> allow telecommuting
> when their employees live within driving distance of
> work. They
> certainly don't want to allow it when the employee
> lives in, for
> example, Kentucky.
>      3.  That means that the employees need to make
> wages high enough to
> afford housing in these markets. How do you pay a
> mortgage of $2500 to
> $4000 a month if you're not making $90k to $120k a
> year?
>      4.  The US employees average car loan cost him
> $350 a month, plus
> auto insurance, plus gas (which hovers around $2 a
> gallon here in
> California).
>      5.  So the US employee has NO CHOICE but to
> live in the expensive
> part of the country because the companies are too
> short sighted to see
> the benefit of letting their employees telecommute
> from places where the
> cost of living is cheaper. And yet isn't this
> EXACTLY what outsourcing
> is? It's just hiring employees who telecommute from
> a place where the
> cost of living is cheaper.
>      6.  Therefore: US employees must have higher
> wages to maintain a
> middle class standard of living that would cost 30%
> to 50% less in other
> areas of OUR OWN country.
>      7.  Employers then make the dumb-ass decision
> that "US programmers
> are too expensive" and they move the jobs offshore
> to India instead of
> using any of the easily available and less morally
> bankrupt cost cutting
> tools available to them."
>

Some very interesting points! Especially, the lack
of support of telecommuting and lower salaries in
other parts of the country.

I moved here about a year ago from Santa Cruz. I
worked
for Cisco then. I was always amazed at the reluctance
to allow full time telecommuting, (for most people one
or two days a week was it, if that). This was in a
company who should have been going out of their way to
promote telecommuting.

Although Cisco hired all the over the world, they
still
hired an amazing number of people for the San Jose
campus. Has anyone seen how the Tasman Drive
campus grew from 98-02. It was incredible. So why all
the
people in San Jose? One thought was that there was
a synergy created by having all those people in one
place
in an area(Silicon Valley) that was full of tech
people.  To some degree yes.

How do you evaluate productivity? If a worker is
telecommuting, as a manager how do I know they are
actually working? For some tasks it is very easy to
measure but for quite a few tasks it is not. Most
managers
just assume if someone is in their cube and they hear
the clickity-clack then the worker must be working.
At first
glance this point is not supported by the increase in
outsourcing but I think that a lot of outsourcing
decisions
are made at a higher level than a line manager. Plus
the
concept of paying an engineer in India, 10K vs one in
San Jose, 110K is an easy sell to the bean counters.

An area that is missed here is how a project is broken
down and outsourced.  I have seen many projects that
fail even
when all the players are the same location. Large
software projects are fiendishly difficult to manage.
Spreading them
out around the world begs for failure. If a project is
extremely well contained then maybe it is a good
candidate for outsourcing.

Increasing the outsourcing in this country will
require
that managers have better tools for measuring
productivity and managing projects. This will support
both outsourcing and hopefully more liberal
telecommuting.  I envison tools that are able to
identify all tasks that a worker might do. Software
development has this down pretty well but departments
like sales or marketing or HR find it impossible to
describe tasks. Therefore tracking them is very
difficult. Getting back to the clickity-clack measure.
They must be busy.

Once the powers that be get over the cheap price tag
of outsourcing I still think they are going have the
same problems they have always had measuring
productivity.
It may work out that they really aren't saving that
much money.

>    Before I read that comment, I had not realized
> the true irony of the
> situation.  I know that I've had software companies
> turn me down because
> I wanted to live in New Mexico and telecommute.
>
> --
> Ray Parks                   [hidden email]
> IDART Project Lead          Voice:505-844-4024
> IORTA Department            Fax:[phone]
> http://www.sandia.gov/idart Pager:800-690-5288
>

John Hellier