I wish to discuss IT Outsourcing to India and China in particular. Has anyone actually found it to improve their business performance? From all reports and my experience the results for companies that have used it have been negative to disastrous!! Companies which have used software engineers/programmers from these countries have found that the resulting software was poor, full of bugs and not delivered to requirements or on time.

Companies such as ours have found it very difficult to get bugs fixed and also very hard to find the right person within these outsourced companies who will take responsibility and own and fix problems as they occur. It has been nothing short of a nightmare dealing with them (particularly Chinese as their English is poor) and the quality of the final product has been unacceptable as well as the post-delivery support.

As owner of the business I have now discovered that it would have been cheaper and less time consuming if we had used local Australian people to run the project and use local programmers. Then we would have had more control and it would be easier to make them accountable for the delivered product. We will not use overseas IT outsourced resources again but stick to local Australian ones.

We have qualified people in Australia who graduate from top Universities and yet we rather use people of unknown qualifications and skills from overseas countries and entrust our mission critical business IT systems to them. How crazy is that!!?? Companies such as HP and IBM have found the same thing.

So why are we all being sucked into this overseas outsourcing?? I think it is because we have no idea what it really costs. If we added up the hidden costs of all the lost time, delays, software bugs and delayed fixes, delivery of software which does not perform the requirements, lack of accountability, and the actual quoted cost then we would see this adds up to a lot more than what it would have cost us if we used local IT people.

The outsourcing of IT and other Australian jobs and manufacturing to Third World countries has nothing to do with 'improving' anything, JW White. It's cheaper!

I sympathise with you. But, what have you been doing to prevent our short-sighted, boofheaded politicians from selling out Australia as they have been doing for many years now?

We have seen Australian manufacturing and technology go for years, and you have probably sat back and watched, just like most indolent Australians. It now affects you!

The Quisling, Howard, is now desperately pushing unranium mining as our saviour. There's not much else left. We import fresh food; the car industry is gasping its last because there is not the gumption to build the cars people now want, and we are 'aiding' Third World countries by becoming more like them.

We are stuffed. Get used to it. Now is the time to pay for your complacency.

JWhite, some common sense will eventually return to this situation, but not for a while.

I recently gave up on the IT industry after thirty-plus years, and the one aspect of it that was the same at the end of the sixties as it is in the middle of the noughts is that business management does not understand IT.

They lack the basic awareness that IT is simply a tool with which to perform business functions, like a typewriter or a fax machine. It is not a business in its own right. It is not separate from, but inextricably linked to, the business process it supports.

One of the craziest manifestations of this was the fad that a company should have a "Chief Information Officer". This accreted a new form of power to a department that should, in all but an alternative reality, have been a service function, subservient and responsible to the business functions rather than be seen as its peer.

This gave rise to massive, top-heavy IT departments which were 20% productive and 80% make-work. Which in turn led to the conclusion - because management had lost sight of the basics - "this isn't delivering value, let's outsource systems development [programming]".

Even worse, this was followed by "business process outsourcing". Such a horrendously stupid idea, it could have been invented by an enemy country looking for the quickest way to bring us to our knees.

Think of it this way.

A business is only as competitive as its business processes. Digging gold from the ground is inherently going to produce value, but the business processes that lie between the gold-in-the-ground and money in the bank are what determine the company's success. These business processes are not simply valuable, they are the life-blood. Since most of them are automated, IT in turn becomes a critical component of that value.

Outsourcing those processes is to make them someone else's responsibility, and takes them out of management's control. If you also outsource the software development that goes with it, your crown jewels are in someone else's hands.

How smart is that?

It's the "in-sourcing" (imports) that worries me too.

Being force-fed "fresh" produce from developing countries has its down side.

Last week, the media reported that a Chinese citizen was caught making lard out of sewerage!

eeeeekkkk!

I think all this outsourcing is a big mistake for the firms involved.

I recently reqiured some information from the petrol company I've been doing business with for 35 years. When I phoned the number in the book I got a heavily accented voice, which I discivered was comming from the Philippines. They could not answer my query, & could or would not transfer me to someone who could. I could not get an Oz number from them, either.

I gave up on this Dutch company, & tried another oil co. Their local call center sorted me out easily. I now have a personal policy to do no business with companies who outsource, overseas.

As my hearing is not what it used to be, I find accents difficult on the phone, so I have now gone one further. If a company is discourteous enough to make me struggle with an accent, I just hang up. So if any company wants my business, they had best be carefull who answers their phone, & where from.

Trouble is all large companies have relentless pressure from shareholders to reduce costs. Common targets would be a 10-20% reduction in costs per year.

If the biggest cost is labor (and it normally is), then moving to low-cost countries is the cheapest wayngs to do it. Labor costs in places like China are normally about 5-10% of the quivalent Australian worker, with few of the ancillary benefits. For management whose performance is based on meeting financial targets then this is an easy way to do it.

cheers,

gw