

Don't Outsource - seejay
http://www.dontoutsource.com

======
mnazim
DISCLOSURE: I am from India and I run a company with more than half revenues
coming from outsourcing model.

The level of threats/attacks from the said man are alarming and completely un
ethical, but there are really good companies also who care about their
clients. But, I have had the (dis)pleasure of knowing companies/people who are
doing activities like putting in kill switches and backdoors for the rainy
days.

Outsourcing can work. It is a good model. Here are a few alarm flags that
should be kept in mind before choosing outsourcing. I have seen these to work
very well over past few years.

Flag 1) No in house tech team:- Hire at least 1 very good developer/engineer
in house, who can actually the verify that credentials of the remote team.

Flag 2) "Oh we charge only $5 an hour":- Work force in India is cheaper than
but c'mon it's not that cheap. Good(not great) developers won't cost less than
$20 - $25. And you can get a really good guys at $35 - $40. The really great
developers won't cost you any less than US/Europe here.

Flag 3) "Oh Oh! PHP, .NET, Rails, J2EE, Drupal, Joomla, Wordpress, Blah, Blah,
This and That? We got it all!":- Stay away from such companies. Look for small
companies/teams with the niche expertize in the field of your requirements. If
you require Drupal expertize, look for companies that specialize in Drupal
solutions, If you need Ruby on Rails expertize look for a Ruby on Rails
company and if you need Django expertize, look for a Django company. Give them
a unpaid timed assignment if they do not posses any demonstrable project.

Flag 4) Need more developers on the team:- Never agree and never push to add
more developers to a late project. Sometimes vendors push for it because of
selfish reasons and some times clients push for it for a false sense of speed.
If you absolutely and unavoidably have to add people to the team, add testers
not developers.

Flag 5) Oh! We don't have/need testers or developers should do testing:- Never
ever agree to working with out professionally experienced tester on the team.
It will save you a hell lot of money in the long run. If company does not have
a proper tester, don't hire them.

Flag 6) Daily so called "15 min" remote scrum meetings:- This does not work in
Out sourcing. I have seen these scrum meetings go on and on for hours. I have
personally sat in daily 3 hr long skype conversations. This leaves very less
time to work and developers keeps worrying about what to report in tomorrow's
meeting than concentrate on work.

Here is what I have seen to work. In a any work week:

* Monday: Specs and week goals meeting - max 2 hrs - whole team participation compulsory.

* Wednesday: Mid Week report - 30 min max - as many team members as practically possible.

* Friday: End of week report - 30 min max - as many team members as practically possible.

Flag 7) Tracker? What's that? Spreadsheets rule:- Use a tracker religiously.
99% of communication should happen trough issue tracker. things tend to get
lost over emails. Use trackers for smallest of things. And do not accept any
project related request over email(this goes for both clients as well as
vendors)

Flag 8) No Time logs:- Ask your vendor to maintain time logs. If necessary,
threaten non-payment for the week if time logs are not finalized and locked by
Saturday. Review time logs every week to avoid any end of month invoicing
disputes. Disputes waste time. Don't use spreadsheets for time logs, modern
trackers have a decent time logging capabilities.

Flag 9) Outsourcing just to save money:- This is a bad idea. Outsourcing to a
good team/company will probably save 30% money but that should not be the main
reason to outsource. One of the biggest benefits of outsourcing is that works
getting done while you sleep.

Flag 10) Not paying on time:- Clear invoices as soon as possible. I am not
saying this happens always, but sometimes payments get delayed for reasons
like confusion over banking details, payment methods etc. Set these things
straight at the start of the project. Delayed payment means lost interest. I
know great companies/teams here who are exceptional in work but operate on a
hair line budget. For them delay payment means delayed salaries for their
employees. And I don't have tell you what delayed salaries mean...

Flag 11) I am the project manager, talk to me:- These are the companies that
are most likely to take you for a ride. Insist every developer on the project
be present in all the meetings. Every developer be present on the project
mailing list. Now there are many companies in India that won't allow this.
They are scared that developers will steal away the projects if they came in
contact with clients and don't trust the developers, but then again you do not
want to work with such people.

Finally, always remember, a common India developer(who is employed by an
outsourcing company) is shit scared of the client paying in dollars. They will
say yes to almost anything. They don't want to offend clients and in turn
their bosses. So get to know your developer team. Talk to them during
meetings. A small amount casual talk will go a long way toward building the
mutual trust and increase comfort level.

These where just my two cents.

------
king_magic
I feel bad that they are being attacked/extorted. But it's somewhat hard to
sympathize with them. First, (IMHO) outsourcing is generally a bad idea, and
it sounds like they were just trying to keep their costs low. But as with
_every single outsourced project I've seen_ , costs ultimately skyrocket, and
the client DOES ABSOLUTELY NOTHING ABOUT IT.

It's insane to go with outsourcing for the purpose of keeping costs low, but
then to not fire the developers when it starts to get ridiculously expensive
(as it always does).

 _Over the years, the cost for TPS skyrocketed. NSC was soon paying $20,000 a
month for coding!_

"Over the years"? Over the years? It took _years_ for it to become obvious
that there was a problem? The criminal acts on the side of the developer are
bad - no question. But the stupidity on the side of the client is just too
much.

------
nhangen
This should be changed to "Don't Entrust Your Entire Business to Incompetent
Programmers and Criminals."

The about page doesn't even work...what is this "campaign" designed to do?

This is like saying not to drive because sometimes people get hit by drunk
drivers.

~~~
highwind81
I think the about page is the homepage. Not that that's a good design.

------
rtperson
I have had personal involvement in one outsourcing horror story, the details
of which I'm not at liberty to discuss. Suffice it to say that, while what
happened at Sapphire is extreme, it's hardly unique.

But let's correctly name the problem here: simple management incompetence. The
managers at Sapphire, no doubt feeling bewildered by all this computer-techy
stuff, decided to send all their source code _and the entire management of
their servers_ to a faraway place. A place where tech problems magically go
away on their own. A place where code writes itself, where productivity is
doubled for half the cost.

No company, be it in the US, Canada, Europe, China, India, or Madagascar, can
afford to think this way any more. Managers can no longer pay someone else to
understand technology for them. We are all technical managers now.

------
TPS2012
I represent TransPacific Software ; Just today we had a look at this thread .
First and the foremost this has nothing to do with Outsourcing, Indian
Programmer ,US programmers…. It is simply an attempt by The Natural Sapphire
Company and its owners to smuggle out our copy righted material through 2 of
our employees. When cornered by law enforcement agencies including (Cyber
Police Mumbai , Mumbai Police, FBI-Cyber department ) Arnstein and his drug
edict smear campaign guy Evan Guttman playing to the Gallery and crying all
over the net (Google for Evan Guttman + sidekick and you will instantly know
what this guy is into) The real story of the case is completely different.
Michael Arnstein and his so called CIO are trying to give it a totally
different colour through disinformation sites like dontoutsource Here are the
real facts We have been working with Michael Arnstein and his company The
Natural Sapphire Company, New York As per the service agreement we are
required to make a customized software for them build over our core ERP
engine, provide our services in stallation of the software, support it 24x7 .
We continued this arrangement since 2006 to Dec. 2010 In December 2010 our
system Analyst who is responsible for overall office IT security detected some
e-mails send by two of our employees in an unauthorised way and through their
person e-mail accounts. On further probing the matter we realised that The
Natural sapphire Company and its owner Michael Arnstein in a 3 months long
hatched conspiracy has stolen and smuggled out our 8 years of copy-righted
work consisting of 1 million lines of code developed in last 5-6 years.
Details of The case The code theft was committed through two of our employees
namely Dhananjay More and Bhaskar vadlamudi who were highly paid and were with
our company for more than 3 years. As the act was blatantly criminal in nature
we filed complaints against them and Michael Arnstein owner of The Natural
Sapphire Company with Bandra Kurla Police station Bandra East Mumbai and cyber
Police station Bandra East as well as order under section 156 IPC was obtained
from Bandra Metropolitan Court for Police to investigate the matter. On
conducting Preliminary Enquiries police registered cases against all the three
accused under IPC and Information Technology Act The matter was Jointly
investigated by Bandra Kurla Police and Cyber. The hard-drive of one accuse
Dhananjay More confiscated ; further police recovered considerable e-mail/chat
communication amongst two accuses, CIO of The Natural sapphire Company Evan
Guttman and Michael Arnstein. The e-mails had considerable communication
wherein Michael Arnstein has coerced two of our accused employees to acquire
false identities namely Dan for Dhananjay and Bob for Bhaskar ; and planned on
how to smuggle out the data .( Both these employees were also promised
immigration to US and accommodation in New York . Further police obtained
details of the banks accounts(State Bank Of India and HDFC bank) of both the
accuses wherein large amount of Forex was sent . Phone records of Dhananjay
More and Bhaskar Vadlamudi were obtained wherein regular phone communication
between Michael Arnstein was traced Over and above Dhananjay More and Bhaskar
Vadlamudi were provided funds to obtained cell phones, an internet connection
and even usd1500 each as legal money in case of any legal issues show up One
of the accused Dhananjay More obtained conditional Anticipatory bail from
session court on 29th Novemeber 2011 the other accuse Bhaskar Vadlamudi is
absconding and believed to be hiding somewhere in Hyderabad India Court order
is available for download on <http://transpacific.in/criminalcase.html> As the
process was on Michael Arnstein resorted to all sort of criminal tactics to
pressurize us to withdraw he criminal case Michael Arnstein further hired Evan
Guttman a known “smear campaign specialist” a drug edict and a pornography
dealer (operates an escort website on-line www.evanwasheremodels.com)

Further to it Michael Arnstein has established a web site
www.dontoutsource.com which has tones of allegations against my company in
particular and Indians in General. The web site contains numerous racial
abuses against Indians. Further to it Mr. Arnstein has posted numerous posts
on various forums calling me a “terrorist” . This has disturbed me beyond
words. Again this was brought to the notice of FBI NY IC3.GOV (wide our
complaints Id: I1104190951275432 and complaint Id: I1101221230305631) We
received an e-mail from FBI that they cannot act due to jurisdictional issue
e-mail copy of the letter attached Arnstein and his CIO off late has resorted
to allegations that whatever is written and expressed against the Natural
Sapphire Company is posted by us. There are numerous Natural Sapphire Company
consumers who have posted negative review on the merchandise which they
purchased. Guttaman is posting on all such forums that we are responsible to
post such complaints. They are attributing every bad remark , every complaint
posted against them on us. In few cases the real genuine buyers who have
posted these complaints have responded back expressing anger over this and
reaffairmed that they have indeed posted these complaints and not us. As the
status stands now investigating agencies are investigating the matter in
India. We have approached Director General of Foreign Trade to prevail upon
FBI NY to get Michael Arnstein behind bars. Communication from FBI is
positive. Any questions feel free to contact us on connect@transpacific.in
Again I would like to assert that this is a case of criminal offence and has
nothing to do with outsourcing or alike.

------
jeremymcanally
This is pretty common in my experience, which really sucks because it leads to
stereotypes. I know some fantastic Chinese and Indian developers, but far more
often than not, I've dealt with charlatans. I think it's just much easier for
criminals to get an actual business going and get money flowing in when
they're (a) not held to the same legal standards and (b) can hide in complete
and utter anonymity due to geographic distance.

I don't know if there's a good way to solve that other than to seek out well-
reviewed, established firms, but at that point you'd be spending nearly as
much for a US developer. :)

------
rondon1
That is sad that a criminal is attacking him. I don't think that India is the
only country where criminals exist though.

~~~
highwind81
I think that's not the point of the article. I think he was trying say that if
you run into criminals it'll be more cost effective to deal with them locally
than overseas.

Frauds and scams exists everywhere, but I guess it's easier to fend them off
locally than overseas. So there seems to be bit of a merit to the article's
stance.

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michaeldhopkins
After paying so much money, they refused to spend a few thousand on bribes to
stop the guy? That doesn't make much sense.

~~~
halostatue
If they did so, they would be breaking U.S. law—and it’s one that is being
fairly well enforced (the Foreign Corrupt Practices Act, I believe).

~~~
NyxWulf
Bribing the foreign officials would definitely violate the foreign corrupt
practices act. Paying the developer 100k to sever the relationship would not
have been a bribe. They may have been outraged by that, but depending on the
nature of the relationship that may have been a reasonable fee. It also sounds
like it would have been a lot cheaper in the long run.

~~~
Rodrigo_Thauby
And what's stopping them from asking for another 100k further down the road
again? Paying extortion money is ALWAYS a raw deal. Your argument is
illogical.

------
ggwicz
This article seems more like simply "don't be a fucking idiot".

And judging china, India, etc. is unfair. I once worked with a guy in Toronto,
Canada, maybe 4 hours away from my home in New York. He ended up stealing
$3,000 from me and there was nothing I could do.

So "don't outsource" isn't necessarily a good message in my opinion. A better
one would be "try to avoid working with random people you've never met or
heard anything about".

~~~
Rodrigo_Thauby
How often do you have the privilege of actually knowing (and knowing well
enough) who you're working with? I think the biggest lesson for me is don't do
business with companies based in a lawless country.

------
judofyr
Sounds more like "Don't Outsource to Criminals" to me.

~~~
NyxWulf
Criminality is related to breaking laws. Doing business internationally is
difficult because the laws are not consistent and cross-border enforcement is
difficult in the best of cases. When entering into a business relationship you
often don't know much about the people you are doing business with. People
make similar mistakes in the U.S. by giving full and complete access to their
source code to unknown and untrusted agents and then get screwed.

To be fair though, the developer probably has a different viewpoint. I've been
screwed out of ridiculous sums of money on different deals through
unscrupulous business owners thinking they had me over a barrel. Ultimately I
always found it cheaper to walk away rather than trying to resolve it even in
the U.S. court system. I have to wonder what would cause this person to react
so hostilely for such a sustained period of time. This is personal somehow,
there is no profit in this for TSC according to the story (100k wouldn't
justify this).

There are always two sides to every story, this is suspiciously one sided and
perhaps more disturbing it paints the entire indian culture and economy with
the same broad brush.

The lesson here should be that development in general is hard. Outsourcing is
even harder. Business disputes often get very messy, cross border disputes
even more so. When engaging in any business transaction give serious
consideration to what happens if this transaction goes south. Do they have
access to your core systems? How bad can they hurt you? These exercises are
just as valid with internal developers as they are with any external agent.
Once you grow beyond the startup stage, building a sustainable and protectable
business should be one of the main focus points of any management team. These
guys made mistakes, who doesn't. This developer is acting childishly, it
happens. Don't over-generalize from this single example.

------
adaml_623
I think a better title would be 'Don't outsource if you don't have any way of
overseeing the process locally'. Really it's a valid warning for anybody who
outsources whether locally or internationally. I guess doubly so if
outsourcing to a country where you don't have trustable local contacts and an
easily accessible legal system.

------
synnik
This article raises red flags on the author's credibility. This looks less
like a truthful account of a story, and more like a frustrated small company
who had a partnership go bad, and are trying to defame their partner.

A whole web site, with linkbait headlines, set up to tell one story? Their
about page doesn't even say they are trying to start a discussion... it just
rehashes the story. With a few other pages to give a token appearance that
they will tell more stories later.

I am sure there was fault on both sides, and I am equally sure the other side
would have a vastly different story.

But this whole site sure looks like juvenile vengeance.

~~~
levifig
Ya, thousands of dollars (and years of their time) wasted dealing with a
scammer seem like "juvenile vengeance" for me too…

------
gm
This is typical drivel from someone who refuses to learn the lesson: "The
problem is unscrupulous developers, hired guns. It could not possibly be me."

I wager the real problem is lack of oversight, lack of understanding of the
problem being handed off to someone else, and lack of acceptance of ultimate
responsibility for the mess.

So the title should be "Don't outsource if your intention is to not retain
ownership in your project (Ownership as in understanding your project, the
development process, and accepting responsibility for oversight the project's
progress)"

Anyway...

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jister
This Prashant guy is insane and I don't think this has something to do with
outsourcing. Guys like Prashant are everywhere so companies will just have to
be careful who they hire or work with.

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swombat
New article: Don't walk down the street!

John Doe was walking down the street, when some thugs mugged him and took his
wallet. Don't walk down the street!

(flagged for xenophobism, over-generalisation, and general "omg them terrists
in other countries want to kill us" feel - this shit does not belong on HN)

------
voidr
This only proves that this particular company failed to handle outsourcing.
They should have realized early on that they are getting screwed. Also there
are horror stories the other way around too.

------
levifig
Outsourcing sucks for MULTIPLE reasons. I wrote an article about a year ago
about another side of outsourcing that will hurt your business regardless of
where you outsource it to: brand equity -- <http://d.pr/B4dJ>

Sorry to hear this one though… Having worked with multiple people from India
and other such countries and having good friends there, one thing I can tell
you: it's a cultural paradigm. While there are many good, honest, hard-working
people there, the ones that get bigger and more visibility are usually the
scammers. It's a sad reality and I'm sorry for those working hard for these
types of guys, getting underpaid while their bosses are ripping everyone off.

------
Father
I wouldn't go as far as generalizing all outsourcing efforts as dubious, but I
do find it particularly shocking that government bodies deny assistance in a
million dollar shamble.

------
powertower
Looks like this thread has been flagged and taken down. What a shame that
there is someone out there that thinks oursourcing works 90% of the time (vs
10% of the time).

------
brianbreslin
I have to believe there were red flags very early on. I'm guessing the price
skyrocketed from $2k -> 20k/month and they didn't think that was strange?

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infocaptor
What is the other side of the truth?

Common, who would spend 240k/yr on a ecommerce website in today's world? There
are so many ready to use open source stuff. And how can someone who has access
to your server steal the domain? This is like handing over your email account
to the developer that has access to the godaddy account in order to manage the
server.

