Latest news on Satyam Computer Services fraud just can’t keep me from returning back to the same question: why would a big company outsource something like an IT services to foreign country. The main reason I keep hearing is that pricing makes outsourcing offerings irresistible. On top of that it removes the need to manage the projects separately, instead feeding requests into a “black box” and getting a ready product on the other end of it.

Well, for starters, if your only competitive advantage is the price – there will be someone who can offer either a lower price, or more benefits for the same money. Add to that language differences (if you ever had a conversation with a tech support “guru” from India you know what I am talking about). Add time differences – whenever you need an anwers in half-hour, your outsourced tech contacts are out of the office. Add mentality difference – or the way things are made to work by “us” and by “them”.

I am even discounting my own experience of fixing things after outsourced help. Just out of pure observation and reading the news, the margin isn’t all that high – I would estimate the average margin at about $10 ,000 – 15,000 per employee vs. an outsourced consultant. On the other side of the scale we have management nightmares, managers having to travel to forein country every month at company’s expense (and being a high level managers they don’t fly economy class – not that I’m aware of).

So instead of having a little more expensive but more readily available local workers companies sign up for cheap labor from overseas, adding management burden, time differences and misunderstandings to the plate. In the end, the overall cost of the finished project would be same or higher then if a local resources were used. And don’t even start me on the quality of the final product…

It’s a rhethorical question, but it needs to be asked: when would American companies realize that they are not that rich to buy cheap things?

If you ever went to local BestBuy, or even swung by – you already know what Geek Squad is. What you, probably, not realizing is that it’s the simplest form of local outsourcing. Buying a computer? Let the Geek Squad member install it for you. But there are only that many squad members on dorky white-orange-black cars.For years your local computer techs have dominated this scene. It was cheaper to build your PC from parts by you local computer store then to buy one from one of the big-name merchants. With Dell hitting hard on prices local techs are all but extinct. I know because I used to be one of those “can you fix my computer” guys. With less waiting time on the phone with tech support and fast replacement turnaround it is now next to impossible to make any decent income (even supplemental) from those gigs. For small businesses, however, it may just not be the case. Services like GeekSquad or similar are in demand. For an office of a dozen people having their own tech guy is very expensive. However, when you need an upgrade for your network, replacement of some old computers while retaining the data or setting up a backup solution – teams like this are indispensable.

From my perspective – it is a good thing. It keeps jobs in USA.

Shopping could be a good experience. It also could be a disaster (just think of your budget after Christmas and New Years for a moment!). Some people make it a mystery. I am talking about companies that provides mystery shopping service.

Now, this marketing research technique is nothing new, but if you really want to get to know what is going on in the field – you have to go to the field. Some of us, business owners, simply cannot afford such a luxury. That’s where mystery shopping service comes into play.

Sounds like fun if you know how to deal with all the data.

P.S. For those who are interested in how this stuff works – there is always a chance to apply online to become a secret shopper. Not sure about the benefits package, but definitely something to think about once the retirement would feel closer.

Are you still outsourcing your customer service?

Watch this!

Well, here, there and everywhere. Another Indian spam-design company… oops, did I say spam? Noo! They are “ISO 9001:2000 certified organization providing world-class IT solutions since 1991″ company, based in Salt Lake Kolkata, India. Long time outsourcing partner with “large client base in India as well as in USA, Canada, UK and Australia”. You know – big guys. The cream of the crop. The brass. What’s interesting though, is that these guys even provided their pricing:

Website design starting at US$ 300 – Web programming at US$ 10/hour – Flash design starting at US$ 75 – Logo design starting at US$ 45.

What I still fail to realize is why would any self-respecting web design company fall for that? It is widely known by now that especially indian programmers are producing especially bad results and (this I know from first-hand experience) even Americans from India refuse to work with programmers and web developers from India.

Generally speaking – there’s nothing wrong with outsourcing or India. It’s just that combined they don’t work. Especially, when I start getting as much Indian web design spam as I do get *various body parts* enlargement spam or nigerian spam letters. Sorry, folks, but if you spam – no cookies for you.

The toll-free number we have provides quite a comic relief sometimes. Today it was “Dave” from “some-Indian-company” but with US phone number (starts with 202, will check the call log later). “We do programming, web development and web design and we are very good. We wanted to offer you to outsource your work to us”.

No, guys, you are not good. There’s a good reason why Porsche costs more then Kia. It’s the same reason why your work costs less – it’s the quality of the end product. Thank you. Not interested.

Thank you! Thank you, Joel! I am much younger then you, I am much less experienced in ways of business, but finally I’ve found another business owner saying same thing I was saying since same 2001…

If you’ve ever had to outsource a critical business function, you realize that outsourcing is hell. Without direct control over customer service, you’re going to get nightmarishly bad customer service — the kind people write about in their weblogs when they tried to get someone, anyone, from some phone company to do even the most basic thing. If you outsource fulfillment, and your fulfillment partner has a different idea about what constitutes prompt delivery, your customers are not going to be happy, and there’s nothing you can do about it, because it took 3 months to find a fulfillment partner in the first place, and in fact, you won’t even know that your customers are unhappy, because they can’t talk to you, because you’ve set up an outsourced customer service center with the explicit aim of not listening to your own customers.

That’s why both the 866 number and main company phone number are tied to my line. If there’s a problem – I must know about it first. Hopefully we’ll never be big enough to loose customers, especially – due to bad customer service.

Sometimes I wonder, what makes people take the job, promise to make something, after the allotted time tell you that you didn’t promise them enough pay. Not only that is stupid, it is also very non-professional. Since you’ve agreed to the terms – it is expected that you will abide by them. How would it look if you’ve done a job, but then I would say that you didn’t do it good enough and just wouldn’t pay? That would be wrong, indeed, so why do people think that if they spend your time and then tell you “you’re not paying enough” you would offer them more? Just because they are so great that they can’t even accomplish simple design? Amazing.

Another wonder comes from message boards. You post a message to hire a freelancer. Those who have been turned down (or even those who thought they would) start telling others that you are not professional. Who cares? Do they think they are the only ones who can design web sites? There’s a good word that perfectly describes these actions and the word is “masturbation”. Those who want to get paid – they ask for terms. They may like the terms or not, but that’s a whole another story. Weird people, weird indeed.

Sometimes some people can set me off, even though I am very patient and calm person. First they didn’t like the project. Then they didn’t like the terms. Then they didn’t like the payment amount. Then they didn’t like the payment time frame.

Had to give in to the last resort – mentioning that they are not the only developers around. Worked like a charm.

My girlfriend finally gave me my 3-year-aniversary gift, the Canon A95. It’s small, cute and 5 megapixels. It’s so convenient, I plan to take it everywhere now… If only it was a little faster, the shutter lag is humongous… But then again – it produces images with great quality, so if there’s a need to show a designer how an establishment looks like – there’s nothing better then this. And it’s not as heavy as my other camera (Fujifilm S2 Pro, weights around 2 lbs.), so it’s really a pocket wonder.

Yeah, the election day is tomorrow and nobody seem to care about anything anymore. Personally I’d like to see someone else winning then some Texan cheater, but hey, that’s not even up to me.

During this weekend talked to some other folk to see if I was right about the attitude I was getting from the Russian guys and was totally supported. Nice to see the business is not only about making money, but also about making a good impression.

Strange thing about other guys who bid on my project. Where it clearly states that the budget is fixed, they nevertheless put their own price on things. Fun part is they feel discriminated when I tell them I have a budget. Cheapskates.

Some teams are so anxious to get the job, once they get my e-mail, they started sending me their ideas on the web site WITHOUT EVEN HAVING THE SPECS! That’s funny, because if I don’t like their ideas I’ll turn to others and they don’t even want to have a chance to look at what I, as a client, may want. This activity looks like premature ejaculation of some sort. C’mon, guys, save it for a proper moment. You’d please much more then.

Continuing on a subject of carding. I have bookmarked the carders’ web site last year. Yesterday went to it – it’s still up and perfectly running. Either web hosters who keep the site on their servers couldn’t care less or there’s some major twist in people’s minds that I totally missed. I mean – no matter what they tell you about not paying by stolen cards you may as well be their next victim. Not sure if banks would go for this, but I have a plan. It sort of like hiring ex-hackers to harden security that they themselves had breached. Instead of paying high insurance premiums and reimbursements, why not secretly purchase all those stolen credit card numbers and silently alter the accounts affected. It would cost much cheaper then making up for it, at least from my prospective. It would also give banks the edge on alerting insecure vendors that they have security flaws. All in all it would benefit both consumers and banks. If any bank wants to implement such a security measure I’ll be happy to do the research for them.