Why Outsourcing to India is a Bad Idea


19
EdJuly 24th, 2007


One of the books I’m most recently excited about is Tim Ferriss’s 4-Hour Work Week. I actually caught Tim live at SXSW last February, but I didn’t really get interested in his book until I read a great review and decided to give it a read.  I was blown away by it.  Like a lot of other people, I really felt like it was speaking directly to me.

One of the areas I found most interesting was his suggestion at hiring someone through India to be a remote personal assistant.  This would have made a lot more sense if just about every project I ever did with an offshore development firm went to complete crap.  But I decided to give it a try and attempted to hire one of the firms mentioned in his book, Brickwork India.  You can read how that went in my review of Brickwork India.

Since that was a dead end, I tried another company he mentioned, Your Man In India, who has a new site just for this, GetFriday.com.  Again, the response was slow and when we finally did hear from someone I had to listen to the voice mail a few times to understand what he was saying.  I finally caught the words “Ed” and “Get Friday”.  So this was clearly not going to work.

With changes at USWeb, I needed to fill a couple positions quickly.  I put an ad up on Craigslist and found someone who fit the bill pretty quick.  He was available right away, so I started him part time for his training.  This person was handling a very specific task, but I needed someone as an assistant to help me with all my small daily items at USWeb.

While waiting for GetFriday to get back to me, a friend let me know that his wife was looking for a position.  Having met his wife and finding her to be very intelligent and friendly, it seemed like a perfect fit.  I have a rule about working with friends, but after a quick talk that was worked out and we decided to start, again on a part time basis to get trained and see how things go.

If you do some research on Brickwork India, you’ll see that the average rate they charge for a person right now is $15 per hour.  And that rate is supposed to go up because of huge demand.  But I was able to get both the above mentioned employees for $15 per hour.  Keep in mind, these are experienced, educated Americans with no accents, time differences, or telephone issues.  Both people wish to be employed as contractors, and have their own computers and telephones.

I will of course have to offer raises and the occasional bonus to keep them up with the value they have to the company, but like I said, the offshore firms are planning on raising their prices as well soon.

I can’t help but wonder how we go to the point where we pay offshore firms in India more than we pay employees here.  I’m sure that these firms would argue that this price point gets you someone highly qualified, and they often tout MBA’s, but are you going to use someone in a foreign country to do anything that would require an MBA? Personally most of what I need in the people I hired was good communication skills, a little better than basic knowledge of the Internet, and competency.

I’ll do a follow up to this post in 30 days and let anyone interested know how this went with my new hires.

 

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19 Responses to “Why Outsourcing to India is a Bad Idea”

  1. Provider’s point of view

    I am proud to be in this industry and I know how much I have learnt from working with my wonderful clients. It depends entirely on how deeper mutual understanding we have and our commitment towards creating success stories.

    Success rate in such engagements is very significant and I can vouch for that. It takes a while before you manage to identify the right company and right people. In non-virtual scenario too, you’ll still struggle to hire a right person at right cost. Right?

  2. I too have done considerable amount of outsourcing in my work. One thing that I noticed.

    Europeans and Americans were charging 10 times the amount of money that they were in India. For programming it was usually $100/hr vs $10/hr.

    This alone, convinced me to look to India for quite some time.

    However, to keep my options open, I would request quotes from US and European programmers too.

    The biggest laugh I got was the *consistent* difference of time.

    Almost without exception, the Indian firms quoted 10 times MORE hours than the US or European.

    Worked out to the same amount of money in the end. No savings for me at all.

    However, the Indian firms had considerably more hassle in trying to get things done.

    I’ll stick with US and European for now. I’d like to say I’m supporting my own country, but I’m from Canada!

    Dave

  3. I have been using Catchfriday.com in the Philippines for outsourcing, and have been impressed with their command of English. I have a virtual personal assistant working for me UK hours and she is very good. I even was given a number of resumes and a choice. I interviewed the applicants and chose Angel, my clients like her because shes professional and humorous.

    Altogether they have given me a good service, and price wise are much cheaper than if I had hired a full-time person here.


  4. John

    I just went onto the catchfriday.com website and discovered poor English and grammar. Not a good sign — at the very least they should hire a copy editor. When I tried to send them an email via their form, an error page kept coming up saying that the “verification code” that I was supposed to type in a field was wrong, although I had typed in correctly each time.

  5. Good post!
    Why not outsourcing to China!

    BPOVIA is much better virtual assistant provider compare to Getfriday.

    We compared the Cost, Signup Process, Payment Process, Cancellation of Service, Refund Policy of 2 companies.

    Please read the full article here:
    http://www.bpovia.com/blog/china-outsourcing/bpovia-vs-getfriday.html

  6. We are using BPOVIA. They are simply the best virtual assistant service provider.
    BPOVIA is the only virtual assistant service provider ever been nominated for “Red Herring 100 Asia” Awards 2008.

  7. I am using http://www.SupportSave.com they offer are a US Public company that offers American Managed Virtual Assistants in the Philippines for $800!

    The Philippines is a former American colony and they speak much better english than either China or the Philippines and they are very much culturally aligned with western ways. They let your choose your employee and even have a CCTV system to keep on eye on your VA at all times :)

    http://www.SupportSave.com


  8. John Matteson

    I have been using Catch Friday for a few months now, and was very pleased with their turn around – they are now run by a British company.

    Their VAs speak English well, and indeed I used their call center in Davao – excellent work


  9. sandeep

    i have been assisting someone in Belgium as a PA for the last 2 yrs and things have been smooth. I think its just a matter of finding the right person at the right time,


  10. Janani Barath

    I came across your blog when I was looking out for people who want to hire Virtual Assistants. I am very keen to find gainful employment this way. I know this post is almost 3 years old but I cannot resist posting a reply.

    I am sorry that you had a experience when you tried to execute a idea that is fundamentally good. If you had managed to outsource some of your work, it would have been beneficial both to you and to the person you hired in India! Your dissapointment reflects in your post.

    I would just like to make some observations to your post in a hope to clarify some points so that readers to your blog do not get so put off by the idea that they dont even attempt to get some virtual assistance from an Indian.

    Outsourcing to India is not something new. Several very large corporations like Dell and Microsoft to mention just a few have outsourced many business processes to India. Apart from software requirements, there is a large market in India that caters to outsourced service needs like medical transcription, data processing, medical billing and customer support. Thousands of Indians work in this sector and interact on a daliy basis with people from another country, having a different culture and living in a different time zone. I must bring it to your attention that these several thousand Indians are doing an excellent job and many companies in America still continue to view this as an excellent business decision. Infact the BPO Industry in India is only expected to grow.

    If you are reading this mail, I am sure you must have figured by now that Indians do know some English. Atleast enough to have read your post, to have understood it and to have been moved enough to actually write a long response to it.

    Regarding the difference in the time zone you would be surprised to know how many Indians reach their workplace at 3:00am and do it cheerfully too, just so that they can delight an American Customer who is not able to cope with some problem with his AOL mailing account.

    You have pointed out yourself that you have plenty of horrible companies in America. I am sure that in India too they maybe some companies that will fail to meet your high criteria of judgement. But I am rather upset by your generic statemnt about the work ethics of Indians. This is almost as bad as the popular belief Indians have about ALL Americans being overly obese because all they do is sit in front of the TV with a bag of potato chips – and not do an ounce of work all day, as the Governemnt gives liberal social security. haha…..

    Finally before I end this mail I would like to make you an offer. If you are still looking for an Virtual Assistant in India I would be happy to help. I have several years of experience is admistrative and secretarial roles. I can help you in the following areas:

    1. Manage you e-mails
    2. Coordinate your meetings
    3. Help you plan and schedule your day
    3. Provide Reception services (you can be assured that I have a neutral accent. We could speak on the phone before you decide)
    4. Provide customer service over phone / mails
    5. Compile information from the Internet

    But because you have had a bad experience I offer to give you a whole month of free services. We can use this time to understand each other and see if there is a scope for us to continue working together. I assure you that I do not need training in performing any of the above-mentioned tasks.

    If you are interested you can leave a reply to this post.

  11. Month free sounds like a great way to test the waters, I am in!


  12. satish

    Never use your man in India. They will trap into their business. First they will ask they will issue birth certificate and then ask more and more money


  13. rekha_nh_med

    I HAVE HAD HORRIBLE EXPERIENCE GETTING MY PRECIOUS DOCUMENTS FROM YMI. THE PACKAGE WAS MISPLACED DUE TO WRONG ADDRESS BEING TYPED DURING DELIVERY. I HAD TO CHECK WITH YMI THAT I DIDN'T RECIEVE THE PACKAGE AND THEY SAID THEY WILL GET BACK TO ME AND EVEN AFTER 2 DAYS I DON'T HEAR ANYTHING BACK REGARDING WHAT HAPPENED TO DELIVERY WHICH WAS FRUSTRATING AND SHOWS HIGH DEGREE OF IRREPONSIBLE CUSTOMER SERVICE. ON TOP OF THAT I HAD TO MYSELF CHECK WITH TNT REGARDING THIS AND FOUND OUT THE PACKAGE WAS DELIVERED TO WRONG ADDRESS BECAUSE YMI GUYS MADE A BIG BLUNDER OF ENTERING WRONG ADDRESS. PACKAGE WAS FINALLY LOST!!


  14. rekha_nh_med

    yourmaninindia- crappy service
    I HAVE HAD HORRIBLE EXPERIENCE GETTING MY PRECIOUS DOCUMENTS FROM YMI. THE PACKAGE WAS MISPLACED DUE TO WRONG ADDRESS BEING TYPED DURING DELIVERY. I HAD TO CHECK WITH YMI THAT I DIDN'T RECIEVE THE PACKAGE AND THEY SAID THEY WILL GET BACK TO ME AND EVEN AFTER 2 DAYS I DON'T HEAR ANYTHING BACK REGARDING WHAT HAPPENED TO DELIVERY WHICH WAS FRUSTRATING AND SHOWS HIGH DEGREE OF IRREPONSIBLE CUSTOMER SERVICE. ON TOP OF THAT I HAD TO MYSELF CHECK WITH TNT REGARDING THIS AND FOUND OUT THE PACKAGE WAS DELIVERED TO WRONG ADDRESS BECAUSE YMI GUYS MADE A BIG BLUNDER OF ENTERING WRONG ADDRESS. PACKAGE WAS FINALLY LOST!!

  15. So which company currently is best for virtual assistants?
    Regards from http://www.offshore.sg


  16. Andres

  17. Scalable

    I'm interested but how to contact you?

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  19. Tom Brady

    Having motivated by Tim’s book, I decided to hire a VA from an Indian company. I never wanted my VA to speak like an American. All I needed him to do is to process some data on open source software that we would provide. It was very stereotyped and we provided step-by-step instructions. But, sadly it seems to me that the VA didn’t really care about the tasks. It took considerably more of my time in delegating or damage control than I would have needed to finish them myself.

    However, I am badly in need of a VA to take this task off my plate. A google search is pulling lots of VA services, and I am confused. Lifenzyme.com looks promising. Does anybody have experience with them?

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