On Sat, 11 Mar 2006 10:46:41 +0000, Anirban <> wrote:
>I have been following this interesting discussion for sometime now. I work for a India based company providing CAD documentation services to prominent architectural firms in the US. Through my extensive interaction with AEC firms, I have come to understand that the primary reason to outsource is NOT TO SAVE MONEY (although that is definitely a bonus) but to handle peak production loads without practicing an internal hire-train-fire policy and without burning out existing staff through regular late hours spent on routine tasks.
Sorry. The ONLY reason companies outsource to low wage (hence low
cost) countries is to save money. If that was not the case, then you
would see companies outsource to countries where wages were similar to
their own. You simply do not see that. I have yet to hear of a company
anywhere in the world that outsources its work to a country where
wages are higher than they would be in their own company. As for
"burning out staff", what staff? They have sacked their staff (or
rather those who would have been doing the work they are now
outsourcing) so there is no one there to "burn out". As for hire-and
fire, the companies outsourcing do NOT have to keep hiring and firing.
They can just as easily outsource to contracting companies in their
home company. If you want an example, many farmers do not have all the
machinery to carry out their own harvesting of their crops, so they
contract out the harvesting to contracting companies who just do the
harvesting for such farmers. Now they cannot outsource that task
overseas, however even here in Australia, some companies have managed
to exploit a loophole. There are numerous instances where a company
has contracted out their labour hiring to a company in Eastern Europe.
The contracting company in Eastern Europe organises the labour and
necessary work permits for people from anywhere in the world who are
willing to accept a fraction of the wages that would normally be paid
here. These people are then sent to work on projects in Australia, and
because of the labour hire arrangements, they get away with it - until
that loophole is closed.
So you see, the ONLY reason for outsourcing to a low wage country is
to save money. Pity that the senior management roles cannot also be
outsourced. Just imagine the huge savings to be made there!
There is one question I have that no one seems to want to answer.
Given that AutoCAD costs the same the world over (actually prices are
higher outside North America), how do these low rates pay for the
software and hardware? I mean, AutoCAD sells for just under $AUS 7,000
in Australia and this would be something like Rs231,000. Then there is
the hardware, operating systems, upgrades of all this, and the like.
With companies in India charging something like 1/10th to 1/20th what
it would cost to do the work here, how can those companies afford the
hardware and software?
--
Regards,
Ian A. White, CPEng.
| /| / WAI Engineering
| /_| / Sydney 2000
|/ |/ Australia
www.wai.com.au
mailto:ianwhite@wai.com.au
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