Reply to: Lloyds cutting rates by another 10% today

[pzz76077]

I am in the process of offshoring my contract position again ..

One year ago it was my HBOS role.
Now on the last week of off-shoring my RBS role.

As people have said it will be very doubtfull if these contract roles will come back as next it will be the permanent roles going out there ..

Can't stop it too late ..

I do have another contract set up to start but think I will need to find a new career in a couple of years time ..

Big question is what ?

Would agree, my estimate is as many as 10 million jobs have moved from the 'west' to cheaper locations around the world, roles previously filled by both contract and permie staff. None of these will come back IMV.

As for another career, anything that is not IT related!
I retire next April (50) so not much for me to worry about as I have just signed up for another year with a previous client and will work part time for co's that I know for a few more years. I don't have any mortgages or debts to worry about but I would worry if I was just starting out in IT as I feel the rules have significantly changed of the past few years and contracting is no longer sustainable or profitable in the way it was when I started out 25 years ago.

PZZ

[pzz76077]

Those initial savings are false saving in the long term, just like the cheap airlines in Mich's example.

Sure their initial price is a massive cut in what a contractor would cost (though not as much these days as it used to be unless you use really dodgy off shore suppliers) but then they quite literally nickel and dime you death

Place I am working at the moment really got into the outsourcing fad back in the last crash, to the point that there is no real in house development team anymore (except moi ), 99.9% of the stuff is outsourced and has been for a while. Now on virtually every system they have they have to go back to the suppliers for the slightest change and those suppliers are raking it in.

Common to see them charge in excess of £2000 for what I know would be about an hour or two worth of work (they of course always claim it is 20 times more work than it actually is), recently had one quote a PM £2500 to change label text on 5 items in a ASP.NET app…bloody fool was going to accept too until I sat him down and did the changes right in front of him in 3 mins flat

Outsourcing has it's place (mainly one off's that should not require lots of support where company really has no one internal with the necessary skills), but just like last crash majority of projects that are getting outsourced are the wrong type of project to do this with and only reason they are doing it is to save money in the short term, in the long term it will end up costing those companies a lot more than contractors, hell it will cost them even more than permies who spend 30% of the year doing nothing

Back in the day when I used to advise multinationals on outsourcing for a living, I used to tell them never to outsource anything that would impact on their core business if they lost it. So menial tasks, etc, legacy mainframes being run down or replaced etc.

These days, managers only have a 12-36 month horizon and anything that comes to light after that is no longer their problem as they will be promoted or working elsewhere by then. Thats assuming its not one of the big consultancies doing the work on behalf of the board and permie managers dont get a look in.

IT is such a small part of outsourcing deals these days and if it is good or bad it does not make much difference.

As a for example, I recently went back to one of my previous clients to update some strategy documents as a favor to one of the guys there. The client, one of the largest global banking firms, used to run its customer helpdesk with 55 staff in the US, 17 in the UK and 22 in Singapore. A year or so ago, they outsourced the entire CHD to India where there are over 450 staff doing the same work and the supporting IT infrastructure is significantly shrunk in India as it is cheaper to hire bodies to fill the cracks and no need to develop any additional IT infrastructure. The outsourced service has been demonstrated to be 60% lower in costs over 6 reporting periods than the previous in house service desk. As I said in earlier posts, none of us contractors can match business benefits of this magnitude. This is just one example of why client co's don't need us any more.

PZZ

[lightfoot]

Offshoring

I am in the process of offshoring my contract position again ..

One year ago it was my HBOS role.
Now on the last week of off-shoring my RBS role.

As people have said it will be very doubtfull if these contract roles will come back as next it will be the permanent roles going out there ..

Can't stop it too late ..

I do have another contract set up to start but think I will need to find a new career in a couple of years time ..

Big question is what ?

[expat]

Throwing out the skilled onshore workers and all their associated knowledge will indeed lead to crap systems, but that won't cause anybody with any power to lose any sleep. Even less so since it is now entire business processes that are being offshored, not just tech requirements. The crap systems will be analysed and handled within the offshore business process. The damaged processes and tech will not come back onshore to be fixed and give us lucrative contracts picking up the pieces, it will stay offshore, lock, stock, and barrel.

All the big customers are in the process of doing this. The choice that we all face of taking it or walking is not a choice of letting them away with it or not; it is a choice between being out of work now or later.

The foreman said these jobs are going boys,
And they ain't comin' back.....

[Not So Wise]

Clientco have seen the light. We are to replace our external offshore development team with an internal offshore development team.

I know for a fact I could organise a 3 person onshore development team to do the same work for the same money.

Could be worse, could be the "spin out our IT/Dev Department into a separate company with us as their only client"...or as I call it, "lets take the worst of every option, bundle them together and go with that"

[Moscow Mule]

an excuse for the outsourcing company to charge 200 hours work where in house people could have done the job in 2 hours. I´ve seen it happen so many times already, but managermen just don´t learn.

Clientco have seen the light. We are to replace our external offshore development team with an internal offshore development team.

I know for a fact I could organise a 3 person onshore development team to do the same work for the same money.

[Mich the Tester]

Those initial savings are false saving in the long term, just like the cheap airlines in Mich's example.

Sure their initial price is a massive cut in what a contractor would cost (though not as much these days as it used to be unless you use really dodgy off shore suppliers) but then they quite literally nickel and dime you death

Place I am working at the moment really got into the outsourcing fad back in the last crash, to the point that there is no real in house development team anymore (except moi ), 99.9% of the stuff is outsourced and has been for a while. Now on virtually every system they have they have to go back to the suppliers for the slightest change and those suppliers are raking it in.

Common to see them charge in excess of £2000 for what I know would be about an hour or two worth of work (they of course always claim it is 20 times more work than it actually is), recently had one quote a PM £2500 to change label text on 5 items in a ASP.NET app…bloody fool was going to accept too until I sat him down and did the changes right in front of him in 3 mins flat

Outsourcing has it's place (mainly one off's that should not require lots of support where company really has no one internal with the necessary skills), but just like last crash majority of projects that are getting outsourced are the wrong type of project to do this with and only reason they are doing it is to save money in the short term, in the long term it will end up costing those companies a lot more than contractors, hell it will cost them even more than permies who spend 30% of the year doing nothing

Once you've thrown out your own people and outsourced maintenance of legacy systems, you're at the mercy of the supplier. Anything that's poorly documented or complicated, the sort of system that one or two people used to know like the back of their hands but who aren´t there now, is an excuse for the outsourcing company to charge 200 hours work where in house people could have done the job in 2 hours. I´ve seen it happen so many times already, but managermen just don´t learn.

I recently saw a 300,000 euro project plan to add one field to a DB table, a corresponding field to an XML interface and the corresponding field to the report at the other end. 100,000 euros per field; I tulip you not. Trouble is, I was the only person in the room who actually understood the spec and could see that clientco were being conned; try explaining to Mr CIO Sw@nky-Pillock that he's being ripped off left right and centre by the wonderful money-saving BPO supplier where he's hoping for a place on the board.

[Not So Wise]

The market has changed and there is now viable competition that will do your job for 20% of what you will work for. Lloyds are doing you a favor by only cutting your rates by 10%.
PZZ

Those initial savings are false saving in the long term, just like the cheap airlines in Mich's example.

Sure their initial price is a massive cut in what a contractor would cost (though not as much these days as it used to be unless you use really dodgy off shore suppliers) but then they quite literally nickel and dime you death

Place I am working at the moment really got into the outsourcing fad back in the last crash, to the point that there is no real in house development team anymore (except moi ), 99.9% of the stuff is outsourced and has been for a while. Now on virtually every system they have they have to go back to the suppliers for the slightest change and those suppliers are raking it in.

Common to see them charge in excess of £2000 for what I know would be about an hour or two worth of work (they of course always claim it is 20 times more work than it actually is), recently had one quote a PM £2500 to change label text on 5 items in a ASP.NET app…bloody fool was going to accept too until I sat him down and did the changes right in front of him in 3 mins flat

Outsourcing has it's place (mainly one off's that should not require lots of support where company really has no one internal with the necessary skills), but just like last crash majority of projects that are getting outsourced are the wrong type of project to do this with and only reason they are doing it is to save money in the short term, in the long term it will end up costing those companies a lot more than contractors, hell it will cost them even more than permies who spend 30% of the year doing nothing

[explorer]

[QUOTE=pzz76077;878302]The real question is - if all of you contractors left tomorrow due to rate cuts or what ever, would Lloyds die on its knees?? No, it would offshore all of the business processes that your IT supports and not have to worry about it again.
Well, why don't they do it then? what are they waiting for? If offshoring is such a viable option, then instead of reducing the gigs by 10%, they can be off-shored to acheive 80% savings, in these times, when businesses aren't hesitating to calculate the consumption of tissue paper in toilets

[pzz76077]

The real question is - if all of you contractors left tomorrow due to rate cuts or what ever, would Lloyds die on its knees?? No, it would offshore all of the business processes that your IT supports and not have to worry about it again.

Get real guys, Lloyds (and just about any other company you care to mention) are in a transition phase at the moment and will offshore every business process they can if you give them a hard time. They will no longer need any of you then. It is no longer the centre of the universe that it used to be, just another commodity service that can be bought at the cheapest price (forget code quality, think in terms of savings, head count reduction and business outcomes).

The market has changed and there is now viable competition that will do your job for 20% of what you will work for. Lloyds are doing you a favor by only cutting your rates by 10%.


PZZ

[downsouth]

but the way the 'news' was communicated, treated like a 'supplier' certainly was not the impression given by the client.

some clients/agents sure do treat 'suppliers' as permies!

why bother with agency is what i say, but hey that a diff arguement

[Mich the Tester]

Yeah right. And then wonder why the client co cans you when they decide they can afford to let people go.

What tulip 'advice' some tools give out to others.

No, it's business. You're not a permie; you're a supplier. Client doesn't get something for nothing. As a supplier you can take the pay cut and cut the delivery accordingly, and you risk losing the contract. Clientco then has to renegotiate with another supplier; maybe he'll find a supplier stupid enough or desperate enough to give him what he wants, but not without the cost of seeking, hiring and 'working in' the new suppier.

Take a look on the internet at cheap flights, cheap hotel rooms, cheap car rental deals etc; it all looks cheap, but that's because the extras are stripped out. Want to take baggage? Fine, that's 50 quid a bag. Want breakfast? Yes sir, that'll be 25 pounds please. You'd like accident waiver insurance? 20 pounds a day please sir.

Nobody in business sense gives away a free lunch; neither should you.

OK to negotiate deals where you take a rate cut and work at or closer to home, or where you can work 4 longer days to cut your travel costs; that way, you're cutting your costs commensurate with revenues; you might then even be able to take on work on the side. But never give anything away without taking something away.

[_V_]

Yes take it like a man!

Every time they cut your rate mid-contract, put that little bit extra into your job!

Slackers get canned!

Work harder, work harder, work harder....!!!

[BolshieBastard]

Just do 15% less work then. Easy enough; take an extra long dump in the afternoon, schedule a useless meeting with someone like minded and chat about whatever interests you both and if you really can't do better, make a few more posts on CUK.

Yeah right. And then wonder why the client co cans you when they decide they can afford to let people go.

What tulip 'advice' some tools give out to others.

[DimPrawn]

Just do 15% less work then. Easy enough; take an extra long dump in the afternoon, schedule a useless meeting with someone like minded and chat about whatever interests you both and if you really can't do better, make a few more posts on CUK.

WHS.

Don't go the extra mile, drag out each piece of work that bit longer, fill in time studying to improve your prospects in the future.

Clients will reap what they sow.