Friday, July 21, 2006
Off Shore Out Sourcing - When a dollar is not a dollar
Having worked outside the US for what now seems forever, I keep hearing that I must be saving a fortune on the cost of labor compared to the US. Logically it makes 100% sense as the cost of labor in the Dominican Republic is considerably less than that in the US. Unfortunately, so is the level of experience, commitment and professionalism.
For the sake of argument, lets say that a US website designer will cost you about US$50/hour while a DR designer with (supposedly) similar experience will cost you US$25/hour. So far it looks like the argument holds up nicely right? Wrong. One must take into account that the level of experience is significantly disparate - ten years of working in a top advertising agency in US is NOT equal to 10 years of work in a top DR agency, so of the bat we have a considerable difference in the quality of the work being done.
Next we need to take into account that the amount of time being spent on the work is a huge factor. One hour of work by a US designer will yield you approximately the same as three hours of work of a DR designer.
So all other things being equal, lets say we require work on a project that should be approximately 4 hours of US style work. With the US designer, you would end up paying about US$200, while for the same results it would probably take the DR designer a good 12 hours, bringing the total to US$300.
But as I've found, all things are not equal, and my experience has shown me that the quality of the US designer will far out shine that of the DR designer, which means that while working with the DR designer, you will also need to undergo various rounds of revisions and refinements.... adding to the already higher cost. Lets be optimistic and say that it takes the DR designer only another 4 hours... now your up at US$400.
Now factor in the competitive nature of the market and the cost of time/money, and your talking about the difference of almost a week for one designer versus the other. This is time that makes a huge difference in terms of 'wowing' the client.
If on the other hand you are on a tight deadline, you only have one option - to sacrifice the quality of the work, which I imagine explains a lot of the over all quality of advertising in third world countries.
Thus, when examining the possibility of outsourcing, there is a lot more than cost per hour to take into account. In many cases, the difference is so dramatic that for the cost of one US hour, you can hire (depending on the country) 3 to 5 people, and still come out ahead - but this hardly seems practical.
I've always been of the mind that the top dollars should go to the top people, not spread around many mediocre or incompetent folks. While much argument could be made on both sides of the argument, I know that I am right.
So, if you are an EXPERIENCED graphic designer or web developer that would like to lower your cost of living and increase your NET income, and move to a sunny and warm Caribbean paradise, please let me know - the life you save could be mine, and the benefits shared!
UPDATE: It has been brought to my attention that there are plenty of exceptions to what I have posted above, as well as having been pointed out that generalizations do not hold true as there are many inept people in the US as there are in the DR - or any other third world country. I would thus like to point out that this is not based on anything other than my experience in working in both countries, and that I concede that there are many excellent people in the DR, some of which I have had the pleasure of working with. Unfortunately, finding, attracting and keeping these great people is FAR more difficult than it is in the US - especially when you do not live in one of the TWO main cities.
I will no doubt be further exploring this topic and its various angles as I continue to try to succeed in creating the very best Integrated Marketing and Technology company in the Caribbean.
¶ 7/21/2006 11:37:00 AM
For the sake of argument, lets say that a US website designer will cost you about US$50/hour while a DR designer with (supposedly) similar experience will cost you US$25/hour. So far it looks like the argument holds up nicely right? Wrong. One must take into account that the level of experience is significantly disparate - ten years of working in a top advertising agency in US is NOT equal to 10 years of work in a top DR agency, so of the bat we have a considerable difference in the quality of the work being done.
Next we need to take into account that the amount of time being spent on the work is a huge factor. One hour of work by a US designer will yield you approximately the same as three hours of work of a DR designer.
So all other things being equal, lets say we require work on a project that should be approximately 4 hours of US style work. With the US designer, you would end up paying about US$200, while for the same results it would probably take the DR designer a good 12 hours, bringing the total to US$300.
But as I've found, all things are not equal, and my experience has shown me that the quality of the US designer will far out shine that of the DR designer, which means that while working with the DR designer, you will also need to undergo various rounds of revisions and refinements.... adding to the already higher cost. Lets be optimistic and say that it takes the DR designer only another 4 hours... now your up at US$400.
Now factor in the competitive nature of the market and the cost of time/money, and your talking about the difference of almost a week for one designer versus the other. This is time that makes a huge difference in terms of 'wowing' the client.
If on the other hand you are on a tight deadline, you only have one option - to sacrifice the quality of the work, which I imagine explains a lot of the over all quality of advertising in third world countries.
Thus, when examining the possibility of outsourcing, there is a lot more than cost per hour to take into account. In many cases, the difference is so dramatic that for the cost of one US hour, you can hire (depending on the country) 3 to 5 people, and still come out ahead - but this hardly seems practical.
I've always been of the mind that the top dollars should go to the top people, not spread around many mediocre or incompetent folks. While much argument could be made on both sides of the argument, I know that I am right.
So, if you are an EXPERIENCED graphic designer or web developer that would like to lower your cost of living and increase your NET income, and move to a sunny and warm Caribbean paradise, please let me know - the life you save could be mine, and the benefits shared!
UPDATE: It has been brought to my attention that there are plenty of exceptions to what I have posted above, as well as having been pointed out that generalizations do not hold true as there are many inept people in the US as there are in the DR - or any other third world country. I would thus like to point out that this is not based on anything other than my experience in working in both countries, and that I concede that there are many excellent people in the DR, some of which I have had the pleasure of working with. Unfortunately, finding, attracting and keeping these great people is FAR more difficult than it is in the US - especially when you do not live in one of the TWO main cities.
I will no doubt be further exploring this topic and its various angles as I continue to try to succeed in creating the very best Integrated Marketing and Technology company in the Caribbean.
¶ 7/21/2006 11:37:00 AM
Comments:
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Do your designers get decent working conditions and infrastructure? If my experience in Mexico is
anything to go by, unprofessionalism starts from the top. The people doing the actual, creative
work are stuck using machines with 256M of RAM, small CRT monitors, using bad software, no control
control nor staging servers, while sitting on uncomfortable chairs at too-small desks, etc.
(I expect that similar comments apply to other fields of endeavour, but I don't know enough about
them to say anything intelligent.)
anything to go by, unprofessionalism starts from the top. The people doing the actual, creative
work are stuck using machines with 256M of RAM, small CRT monitors, using bad software, no control
control nor staging servers, while sitting on uncomfortable chairs at too-small desks, etc.
(I expect that similar comments apply to other fields of endeavour, but I don't know enough about
them to say anything intelligent.)
# posted by 
: 6:52 PM, August 03, 2006
: 6:52 PM, August 03, 2006
I have no doubt that you’re right in a lot of this post. Quality standards here are only fair…
There’s a basic topic not covered on this post: Creativity is directly attached to the general culture, environment, the people around… The quality standard is modeled by those factors (among others), not only by the certification as “Adobe Certified Designer” (or something similar). In the USA, a human being is target of a lot of creativity models. The environment tells what’s good and what’s not. The standard is based on what he/she is seeing. If people don’t have experience and is located at a non developed country, there’s no standard to follow. Creativity doesn’t exist per se, it’s only a way of imitation. Humans (and by general all animals) learn by imitation. If you get together 100 babies and leave all them alone, without an adult to imitate, you can be sure that sometime they (or their descendants) will speak some primitive language of their own. They will not end speaking English, Spanish or Chinese, of course. So, the quality of creativeness can’t be measured by comparison. Third world’s countries don’t offer such environment available to everybody. Only a small elite can reach it, and that elite usually don’t need a job, because it is better to build the own company.
I’m not meaning that a designer must be a copy/paste or imitator. I mean that all jobs need an experienced leader, with knowledge of what’s right and good (and what isn’t). High quality doesn’t mean success, or low cost or good design... What makes a project successful is the right business model combined with the right people doing the best to reach the goals. Take for example the Apple’ iphone: it was a success months before it reached the market, independent of its quality (unknown before it got to sales), and quality can be taken in several ways (hardware, usability, phone’s OS, phone’s applications, and a long list).
Turning to the original post again: a human being can go to design school or college and there he/she will learn a lot of things (not the specific skills that the employer is searching for); in developed countries, that person will learn whatever he sees around and the competitive market will force him to improve his own skills. That explains why the Chinese have good workers and can produce high volume of work in a robotic manner: they only need to see and apply that knowledge to do that, not attached to creativity, instead only mechanical job. Only the high competitive environment will produce high qualified personnel in creativity and design. It means: by doing a better design than everyone else, this is the only way one can succeed; if there’s not high quality competence, you don’t develop high quality jobs. Another thing must be added: what is good in DR isn’t good in USA, so the designer must know and get closer to their job target culture. The right advertisement is not the same for Dominicans and for Iranians. They will not show our TV ads on their TV. By the way, we don’t show their TV ads on ours…
A creative team needs a dedicated leader who knows how the market is working. Designers need a model to follow, a model to defeat and standards to surpass. In this way, those designers (all of them) need an experienced business leader who must decide if that product can reach the market and succeed (and remember that quality isn’t enough to succeed). Again: everything must be wrapped in the right business model.
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There’s a basic topic not covered on this post: Creativity is directly attached to the general culture, environment, the people around… The quality standard is modeled by those factors (among others), not only by the certification as “Adobe Certified Designer” (or something similar). In the USA, a human being is target of a lot of creativity models. The environment tells what’s good and what’s not. The standard is based on what he/she is seeing. If people don’t have experience and is located at a non developed country, there’s no standard to follow. Creativity doesn’t exist per se, it’s only a way of imitation. Humans (and by general all animals) learn by imitation. If you get together 100 babies and leave all them alone, without an adult to imitate, you can be sure that sometime they (or their descendants) will speak some primitive language of their own. They will not end speaking English, Spanish or Chinese, of course. So, the quality of creativeness can’t be measured by comparison. Third world’s countries don’t offer such environment available to everybody. Only a small elite can reach it, and that elite usually don’t need a job, because it is better to build the own company.
I’m not meaning that a designer must be a copy/paste or imitator. I mean that all jobs need an experienced leader, with knowledge of what’s right and good (and what isn’t). High quality doesn’t mean success, or low cost or good design... What makes a project successful is the right business model combined with the right people doing the best to reach the goals. Take for example the Apple’ iphone: it was a success months before it reached the market, independent of its quality (unknown before it got to sales), and quality can be taken in several ways (hardware, usability, phone’s OS, phone’s applications, and a long list).
Turning to the original post again: a human being can go to design school or college and there he/she will learn a lot of things (not the specific skills that the employer is searching for); in developed countries, that person will learn whatever he sees around and the competitive market will force him to improve his own skills. That explains why the Chinese have good workers and can produce high volume of work in a robotic manner: they only need to see and apply that knowledge to do that, not attached to creativity, instead only mechanical job. Only the high competitive environment will produce high qualified personnel in creativity and design. It means: by doing a better design than everyone else, this is the only way one can succeed; if there’s not high quality competence, you don’t develop high quality jobs. Another thing must be added: what is good in DR isn’t good in USA, so the designer must know and get closer to their job target culture. The right advertisement is not the same for Dominicans and for Iranians. They will not show our TV ads on their TV. By the way, we don’t show their TV ads on ours…
A creative team needs a dedicated leader who knows how the market is working. Designers need a model to follow, a model to defeat and standards to surpass. In this way, those designers (all of them) need an experienced business leader who must decide if that product can reach the market and succeed (and remember that quality isn’t enough to succeed). Again: everything must be wrapped in the right business model.
# posted by : 4:04 PM, October 28, 2007
: 4:04 PM, October 28, 2007<< Home
