I was positively staggered to read the article “Should North Americans Send More Software Development Work to China?” Perhaps my opinions are underlined with a bias of the South Indian (you’ll find Bangalore in those parts) variety, a fierce one at that too (which is why I have long abstained from writing the article “Why Indian outsourcing is the next best thing to sliced bread”). Nevertheless, I maintain that the article does not present an objective view of the state of outsourcing to China & India. Do read on, because as fiercely competitive as we Indians are, we are just as capable of self-inquiry and mindfulness.
If the general idea is to demonstrate how outsourcing to China may be as good, if not a better option than outsourcing to India, a clear insight into Indian outsourcing is noticeable by its absence. “Finding a developer from India to back up the software you are using” does not give me a sense of certainty in the subject being discussed. There is a lot more to software outsourcing in India; like the country itself, it has a rich and exciting history that contributes to its current state, and consequently, its future.
“It is hard to answer without really trying out any Chinese outsourcers, but evidences show that Chinese developers are growing quickly.” If CMMI is the only evidence, then again I really don’t see how that instills confidence, say, if I were an executive looking to outsource some part(s) of my software systems/process. I would like to see concrete evidence of successful software projects developed in China. It seems half-hearted and therefore prudent to simply state where the weaknesses are and how these weaknesses are being overcome.
“Moving to China also makes sense if we consider the complementary factors between China and India. Although the two neighboring countries have some major similarities—both are highly populated and are in the development phase, there are also some significant differences (e.g., social system, culture, economic structure, etc.). By building a vendor portfolio that includes India, China, and other countries (such as Ireland and the Ukraine), North American software vendors will be able to offset risk factors and achieve stable product or project delivery.”
This sounds like an ambitious sociological conclusion. Why would it be beneficial for a company to send their development needs to 4 different countries? How can dealing with 4 countries be better than understanding completely and dealing with one country? Why talk about Ireland and Ukraine (why not Brazil, Russia…) in an article that seems to be looking at the state of outsourcing to China and India?
Here’s my spin. In recent times, China and India have been collaborating on various grounds; I think that will be a significant factor in the future of outsourcing to that region.
• Indian tech firms are establishing units in China, even using China as a base to other Asian markets
• Chinese hardware companies and Indian software companies are forming alliances to serve global consumer markets
• The Sino-India Education and Technology Alliance is growing in importance; Indian universities are admitting more and more Chinese students, even offering Chinese in the curriculum
• For the first time in the history of the region, a Tamil language news station (Cheena Vanolli) has been created with its base in Beijing!
Software outsourcing seems to be no longer about India or China; companies already established in the business of software outsourcing are setting trends; exchange programs in Indian universities are paving the way for a new kind of partnership. It is time to start recognizing Outsourcing to Chindia.
These are just my thoughts and opinions. I’m presenting them because I believe this is what impartial research is all about–sharing ideas and opinions to continually revive the process of learning, discovery and innovation.
Here are 10 reasons why NOT to outsource to China:
1. There is no protection of intellectual property and none forthcoming
2. The exploding balance of trade
3. China’s indifference to allowing their currency to find its true level by decoupling it from the dollar
4. They are a Communist country
5. They have no concept of human rights - the press has no freedom nor do the citizens
6. They have nothing to give in return but cheap labor - what technolgoical advance have they made since the abacus. They have one paramount desire - to steal our jobs and our knowhow
7. The have no credibility in the greater scientific community - they diddle with research findings to publish first only to have to retract later.
8. They can’t even produce milk that is safe for their own people to consume. If babies die, so what - as long as it doesn’t affect their economic growth, what’s a few children here and there
9. They are the worst polluters on the planet - their technology is outmoded and their carbon footprint is only growing - they’re putting no controls in place to protect air, water or the climate
10. Their one national goal is to gain hegemony in their hemisphere - all their surplus money goes to growing their military and their war machine - why would we want to be more in their debt?
Here are 10 reasons why Chinese outsourcers NOT to take US orders:
1. There is no economy growth and none forthcoming
2. The exploding amount of debt
3. US’s indifference to allowing their property to find its true value by selling more funds
4. They are a Capitalist country
5. They have no concept of respecting others - they send wars to anywhere they want
6. They have nothing to give in return but exploiting the cheap labor - where were they at the time when the abacus was made? They have one paramount desire - to enjoy the abundance of materials supplied by cheap-labor countries while claiming jobs are stolen.
7. They have no credibility in the greater financial community - they sell you expensive junk that will disappear over one night.
8. They can’t even design toys that are safe for their own people to consume (before the truth is uncovered, they will say it’s manufacturers’ fault). If babies do, so what - as long as it doesn’t affect their stock price, what’s a few children here and there
9. They are the worst polluters on the planet - in terms of per capita - they are the only country declined the ratification of Kyoto Protocol.
10. Their one national goal is to gain hegemony in the whole sphere - they even borrow money to grow their military and their war machine - why would we want to be more in their credit?
I totally agree that CMMI should not be the only evidence and I also wrote that “While being CMMI certified doesn’t mean that the adopters will automatically receive overseas orders …” right after and that “CMMI certificate increases creditability, but don’t use it as the only criterion for vendor selection.” in the tips. CMMI is not the only evidence but looking at the significant CMMI adoption rate in India, I feel it should be a good evidence.
The understanding of vendor/outsourcer portfolio requires some basic knowledge about risk management and portfolio management (in investment, project or product management domain). I’ll try to write a blog to further talk about this concept. In short, diversity is one of the things that make the world beautiful. I believe India and China won’t be enough to take over all the software outsourcing business. In fact, countries such as Ireland and the Ukraine also have good presence in this area. However, the 4 countries don’t make an exhausted list. There are other players.
The Chindia idea was amazing and I really liked it.
Funny, I’d have thought this post might inspire some interesting debate but I’m surprised at the tone, level of assumptions, and unfocused quality in the two top 10 lists that were posted as comments here.
I also wonder why those comments (the top 10 lists) neglected to address the point of this post, which seems to have been largely to highlight Indian outsourcing issues with respect to their collaboration with Chinese companies.
To Kenneth Richardson,
I think that the article this blog posts addresses, provides an overview in response to your first point about China’s treatment of intellectual property. If you take a look at the article, you’ll notice that author, Kurt Chen, discussed China’s recent improvements in its efforts to address copyright protection.
You do raise an important issue. Different countries and cultures throughout the world have different understandings of what constitues “intellectual property” and how to treat it in accord with legal and business practices. There remains plenty of variation between “western” countries as well. I think that it would be important for any company researching outsourcing providers to carefully consider how it would like to handle the issue of “intellectual property” in relation to its agreement with the provider and the various laws that might apply, whether from China or any country.
I wonder if you’d mind explaning the basis for the remaining points you itemized. They appear at first glance, to be gross generalizations that lack a clear rationale supporting your argument against outsourcing to China. Please correct me if I’ve misunderstood.
To Daye N,
I get the point of the parallel response you’ve posed to Kenneth Richardson’s but I would ask a similar question of you. How do you justify each of those 10 points? If those can be justified, how do you think they support your argument that Chinese outsourcers shouldn’t take US orders? Seems, also at first glance, like it’s as equally gross a generalization as Kenneth’s post. Again, please correct me if I’ve misunderstood.
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