Offshoring: The race to the bottom (or a better world)

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While most contractors and sub-trades don’t need to worry directly about the increasing tendency to shift work offshore, the challenges (and potential) of economic globalization continue to reshape the way business is done.

I first discovered the apparent savings through offshore contracting about a decade ago when, to rebuild a website cheaply, I contracted with someone in India through elance.com. The service proved to be excellent, with one big catch: Four years later, when I sought to rebuild the site again, the contractor had disappeared from orbit (or at least my sight-lines).

That led to an important lesson-learning disaster in 2005. I had hoped to create an integrated collection of domains, supported by Google AdSense advertising revenue. One contractor used a bait-and-switch tactic to increase prices dramatically.  Another couldn’t do the job he or she committed (you often don’t know the gender when you are dealing with remote suppliers purely by email and text messaging.) In the end, two contractors, one in India and the other in Pakistan, bolted together some mediocre sites, which left to languish, resulted in a dreaded AdSense “account disabled” email  a few years later.

These experiences taught me off-shoring’s extreme limits. However, I’ve learned how to overcome these risks.

We are preparing now to relaunch the websites canned in the mid part of last decade. However, we wouldn’t consider completing the core design offshore. Our North Carolina contractors, Qudeso, are relatively expensive on the surface, but they communicate quickly, use state-of-the-art designs and, once the work is completed, we will own the rights to use it as we wish.

(This legal/copyright ownership should not be underestimated when you go offshore. Getty Images and other stock services earn substantial fees by hounding publishers for copyright violations, often because offshore designers, not caring or knowing about copyright, simply lift images off the web.  The offshore vendors don’t see the dunning legal letters and claims for anywhere from $1,800 to $10,000 or more.)

We will also use local writers who know their communities.  Sales representatives will also be in Canada and the U.S.  All customer service and direct client contact will be with Canadians and Americans.  (We’ve all experienced so-called customer service from offshore call centres, where you can barely understand the English at the other end of the line.)

However, I’m still using offshore contractors, with these rules:

  • No one is hired or contracted without testing and evaluation;
  • No agencies or sales reps or “big organizations” can be involved.  (They just add to costs, inconvenience, and mis-co-ordination;
  • No contractor is ever allowed enough play in the story to have mission-critical importance.

The latter rule is essential because you don’t want to be held hostage offshore. The others are intended to prevent over-paying for really crappy service.

With these rules in mind, I set out to resolve a couple of challenges.

First, our websites need to be updated frequently. We have two types of content: Original material and rewritten news releases. The original material must, of course, be produced locally (or at least within Canada and the U.S.) However, offshore vendors can rewrite the news releases and crop and upload images and text.

I decided to use odesk.com for the writing and uploading services. Here you can pay by the hour or on a flat rate contract, but Odesk (unlike Elance) focuses more on hourly pay. This attracts more “employee” types than true independent contractors. Of course, since we are hiring totally offshore, North American wage, benefits, and other labour laws don’t apply.

First, I posted for the writer/rewriter. This work requires the contractor to scan the web for relevant stories, and then rewrite them (with appropriate source credit) sufficiently that they don’t run afoul of copyright and Googele’s copied content rules for search engine optimization. I received about two dozen responses. Five appeared worthy of further testing, so each received a brief test assignment, with pay. (We use this test assignment approach to evaluate potential Canadian and U.S. employees as well.) Two didn’t complete the assignment, and two got it wrong. But one, based in Pakistan, performed perfectly. We’ve contracted him to continue working with us for about $5.00 an hour.

Next, I needed to find a data uploader. This work doesn’t require writing skills but the contractor needs to understand basic software and have enough literacy to make sure the right things are moved to the right places. When I posted this one on Odesk, I received 70 applications in two hours. Here, I simply eliminated anyone seeking more than $5.00 an hour, and then invited them to complete a test assignment that didn’t involve any of our own resources (and so I wasn’t asking for any free work). Five of the 12 applicants returned the test completed correctly. One said he would work for $1.00 an hour.  I’ve given him a further paid test (three hours work will obviously not break the bank here) and he has done it well. (Notably, my Pakistani writing contractor communicated that he would like the extra work, but he seemed satisfied that his time is better spent earning $5.00 rather than $1.00 an hour for higher-skilled work.)

These contractors may flake out, they may flame out, but they won’t threaten the business if they do. They’ll just save me a pile of money if they succeed.

Jon Goldman has described another offshoring success in which he has discovered a way to crowd-source cheaply for graphic logo design. (I won’t do this, because our current designer, while expensive in the offshore context, does great work, on production/results basis, and there is no need to upset that apple cart. However, as a cost-savings measure, many Canadian and U.S. publishers are indeed offshoring portions of their production and design, using central office co-ordinators to manage the work.)

Meanwhile, last night I received a spam-type email from a Chinese printer. Previously, I would have dumped this email in the garbage . . . but a few weeks ago, at my Canadian gym, I met a fellow (non-competitive) publisher who, years ago, I tipped off about an ongoing bonus revenue source, from which we both earn several thousand dollars a year. “I’d like to repay you the favour,” he said. “I didn’t believe it until I tried it, but I’m now printing in China — and even with shipping costs, my printing is half the price.” Obviously you need to be careful about delivery speed and back-end services such as mail preparation and distribution co-ordination. But maybe that email I received last night isn’t really spam, after all.

Clearly, offshoring is changing business for many organizations. I can’t say whether it is good or bad.  Sometimes I think the savings are false and far too many businesses, for example, have fallen for crappy offshore search engine optimization services, which have destroyed their websites’ reputations. Also, I’ve described some of my disasters and failures. If you wish to go offshore, be careful. You may run into minefields, but you may also save a small fortune in costs.

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