reap what you sow.
The tech problems at the RBS banking group that left millions of people unable to access money for four days last week were caused by a failure in a piece of batch scheduling software, sources have told The Register. And at least some of the support staff for that software have been outsourced to India - as recently as February …
reap what you sow.
I just saw this on another news site:
"The boss of Royal Bank of Scotland and NatWest has told Sky News that senior management will face "proper accountability" over the computer chaos when deciding on bonuses."
When popped into Google Translate (Bullshit -> English):
"We're only going to award ourselves a 1 million pound bonus instead of the 2 million we originally planned. The poor shmucks we've been running ragged with overtime this past week will receive fuck all and we'd really like our ex-IT staff to stop laughing at us now please."
[quote]"I have no evidence of that. The area, if you like, the UK backbone, has received substantial investment."[/quote]
what UK backbone ? It was all outsourced to Chennai. Unless the investment is the money they used to pay the IT staff off (or maybe the money they pay monetise to manage their mobile applications).
Here is a CEO that doesn't have a fucking clue or else his reports are lying to him. If I were him (thankfully I am not) I would be looking for a new CTO because the ones he has aren't going to finger themselves in any blame.
Utterly clueless. And very likely to be found out when reporters start digging.
Would the equivalent job be in the UK?
Indeed. I wonder how much money outsourcing has actually saved them? If it weren't for the taxpayer backstop it'd be f*cking hilarious.
It may serve one purpose however - to highlight the risk to the financial marketplace of outsourcing your IT staff and perhaps any planning to will hold off in fear of being seen as more risky by the wholesale funding markets.
Maybe he's referring to the network work Accenture did for RBS, oh no, hold on, they made a 'James Hunt' of that as well...
There are no equivalent jobs in the UK. That's the problem.
The calculation we used was one good UK IT guy would need to be replaced by 2 in India plus maybe 20% input from a good UK IT guy to ensure quality. Common problem with Indian culture seems to be a kind of "can't lose face" issue, very reluctant to seek help when necessary.
Future problem for UK is how do we grow our own "good IT guys" without having them work lower down the team to build experience, skill, knowledge, insight.
I doubt they will ever publicly say what the issue was, as they would probably be sued.
Possibly sued by Infosys perhaps ?
anon for legal reasons :-)
This article reads like unwarranted finger-pointing. 'Outsourced' and 'India' are not synonyms for 'incompetent', and if RBS hired someone with "4-7 years experience" of the relevant software then hopefully that person will know what s/he's doing! I just hope that insulting salary goes further over there than it does here.
No, employing staff in India isn't a synonym for incompetent, but getting rid of staff who have worked on the same systems for 20-30 years and replacing them with someone who has 4-7 years experience with the software you need doesn't compare.
Also remember: When you offer voluntary redundancy, the people who go first are the ones who are most confident of getting a new job: ie: Your most highly skilled staff.
Lets be blunt: the best brains aren't in India. The reason? because the really excellent Indian IT people have been hired and work in the US and are being paid lots (and lots) of money. The next best are in the UK, the next best are in the Middle East or Singapore. Add onto this that IT people are paid huge salaries by Indian standards and there is an massive IT boom going on there and you get a situation where there are lots of not-very-good people in the market.
Why work in India for 10 laks (about a million rupees, or about 9K) when you can work in the US for 100K USD or in the UK for a comparable amount?
I spent weeks interviewing devs in India. I started off with 1250 CVs, did about 400 phone interviews, and 200 face-to-face interviews. I hired 15 people. And some of them were simply "warm bodies".
"No, employing staff in India isn't a synonym for incompetent, but getting rid of"
Yes, that's of course a fair observation, but not one particularly emphasised by the article writer, which I believe is our fellow commenter's point above.
The article repeatedly mentions the outsourcing to India, but fails to comment on the relevance of it, if any, as regards the mishap.
'Outsourced' and 'India' are not synonyms for 'incompetent',
True, but as an IT professional with nearly 30 years experience who was replaced by an Indian graduate they are synonyms for inexperienced, naive and clueless, and the last one does not only apply to India.
and if RBS hired someone with "4-7 years experience"
That's a big "if" there. That's what they were looking for, but it doesn't mean that's what they got.
>'Outsourced' and 'India' are not synonyms for 'incompetent'
No they aren't but the reason for outsourcing is to cut costs so you have to add in "cheap" and when you do so you get incompetent. It's not the bods fault he's incompetent, he's probably been employed purely because he can speak reasonable Enlgish. Problems with outsourcing lay squarely at the feet of the management who instigated it and then to a lesser degree with the outsourcing supplier who recruits based on cost not ability.
Excuse me for being thick, but 11K is not cheap. In fact, if it costs 11k there, there is _NO_ real saving.
Let's factor in all factors in the equation.
1. The overlap between UK and India business hours is ~ 4h. This means that you need both a development head and a support head for every UK person you replace. In general based on experience from previous projects the "coefficient of inefficiency" here is roughly ~ 2x. Still better than India-US which tends to go into 3x because of the zero overlap between timezones.
2. You have to pay for the infrastructure there, infrastructure here and telecoms infrastructure in-between. Ballpark for that moves the number to 3x+. It is worse than India-US as you pretty much need to buy capacity on Flag/Reliance's network which is booked to the hilt and costs an arm, a leg and a prosthetic.
3. You still have to maintain a "head" in the UK either by rotating people from India or keeping PM, Arch, requirement gathering staff locally. This increases the "coefficient of inefficiency" to ~4x +
4. You now have to employ extra compliance resources to keep DP and various financial regs happy. That 4x just became 5x at the very least.
5... 6... 7....
So all in all we are talking what? The real price is at least 4-6x times the posted salary of that guy. So in reality, replacing one person in UK on a 60K salary with the one imaginatory person in India on 11K salary (in reality you are looking at 2+ and some resource on-shore to feed them) actually ends up costing 60K so no savings. At least. More like loss.
At that price you might as well go to Eastern Europe and save on compliance costs and TZ ineffiency or go even further east where labor is still cheaper and you have cheaper comms by going across USA+Pacific (at the expense of some extra compliance costs).
If you are hiring one person, that true, however, if your hiring, say, 800, Economies of scale kick in.
1), they are usually prepared to work UK hours for the money they are getting.
2), Lots of companies seem to manage fine.
3) Again, economies of scale. 1 head in the UK for every, say, 10 in India?
4) See (3)
If the numbers didnt work, people wouldnt be doing it.
"It's not the bods fault he's incompetent, he's probably been employed purely because he can speak reasonable Enlgish."
So I won't get a job in India and where I do work I don't speak English.
Indian staff that are based in India tend to be very junior and have a high turnover rate.
Understanding a particular software package is one thing, but knowing how it is used in a particular company environment is a very different thing. The result is that you can use them for day-to-day running of a system, providing you have an up-to-date set of docs describing in detail the process and what to do, but getting them to make all but the most basic changes is asking for trouble.
Indian staff working in the UK tend to have much better communication skills and more experience. On the other hand they are much more expensive so the bean counters (who know the price of everything and the value of nothing) don't like to employ them.
Actually while I was at RBS it was widely known that each seat in India (Gurgoan, not Chennai) was costing RBS under £15,000 per year, so considerably less than the UK roles they replaced.
Oh and just because some one over here is on, say, £50k per year, does not mean they cost the employer £50k. by the time you add on their side of tax, NI, insurance, liability, medical, pension (which incidentally RBS was still ratehr good for even after ending the non-contrib final salalrey scheme), training, cost of holidays and sickness, you can add 50%+ on to the sallery. Oh and another 50% ro their first several years if they are a new starter (inductions costs, payments to agencies, cost of training up, ...)
AC because while not bitching about RBS and the fact that didn't just off-shore to India, they off-shored to cheap by local standards Indians, I am ex RBS staff.
While I am sure there are plenty of talented people in India, the outsourcing companies are often terrible, I have seen companies ripped off with work so shoddy they have had to hire in local experts to fix the mess left.
You have to look at local costs before you compare salaries, the UK is very expensive, so comparing like for like is wrong.
I just know I avoid outsourcing to India now, the few times I have tried it, the results were terrible, long term its often better to hire someone locally, even if the cost is higher!
And by outsourcing abroad we loose the benefits of the tax and insurance that would have been collected to pay for our services here.
We lose jobs
We lose income of tax and insurance
"...Also remember: When you offer voluntary redundancy, the people who go first are the ones who are most confident of getting a new job: ie: Your most highly skilled staff...."
Spot on. Voluntary redundancies in this sort of case are generally a really good filter for keeping hold of the dregs and losing the cream. Doesn't stop some management doing it again and again...
As they sowed...
You've never tried recruiting anyone from India then?
At least 90% of the CVs that land on my desk - from organisations like Capgemini and InfoSys - are utter lies.
You read a CV that appears to be a perfect candidate, with 7 years experience working on .NET projects, but upon interviewing it very quickly becomes apparent that they haven't got a clue.
Wrote :- [re economics of outsourcing ] "If the numbers didnt work, people wouldnt be doing it."
Well, they haven't worked, have they? People cannot get to their money. I won't ever be banking with RBS. Is that (and many like me) in your equation?
Getting rid of staff who have a vested interest in getting it right, and replacing them with outsourced staff in a foreign country, who have no proprietary interest in the organization to which they are contracted *might* be part of the problem here.
"If the numbers didnt work, people wouldnt be doing it." is the worst argument I have read so far - great work, mate! It looks great on paper, but it does not work, we see it all the time. Remember: in theory, theory and practice are the same, in practice, they ain't.
Theory is, we can replace our 10y+ experienced staff by some Indian graduates, who cannot mumble proper English if you trained 'em to (no offence, guyz, the same goes for Scott's etc). You put knowledge transfer in place and hope that knowledge/1000 = knowledge + experience. Then, when you have a whole team being replaced, no amount of "knowledge transfer" is gonna work, especially when you have the guyz who get the boot delivering the knowledge transfer. Hello??, think these guyz are stupid, or what? Who really, honestly thinks a bunch of experts who have been asked to leave with a special bonus will really help those that will replace them?
Then you have the "management cretins" practice. In some companies, cretins are promoted to management positions to get them out of the way and stop them causing harm - we see this a lot in France, for example, but not only. This has a very bad effect on outsourcing.
Outsourcing will always fail, the more complex the environment, the more likely the failure AND the more complex the environment, the more costly the failure.
Note, I do not work in the UK, am not and have not directly been confronted with outsourcing ... I have been asked to clean up the mess after a failed attempt, that is all ....
>'Outsourced' and 'India' are not synonyms for 'incompetent'
This is true, but they have got rid of the 20-30 year 'lifers' who have invested blood sweat and tears into an organisations IT; the ones that take ownership of problems and add value in that commitment to their work and the invaluable insight they provide into complex system operations.
You cannot and never will be able to put a price on that.
If I wasn't an RBS customer with no access to my account, I would be laughing at them.
More likely it will be 0-3 years in reality or in fact 0 years which is what some Big US/EU Outsoucers are proudly advertising openly for new "developers" in certain locations.
Does anyone honestly thing there are "unemployed" gangs of experienced CA-7 specialists roaming the streets of Chennai or Bengaluru? If you taser them do they start shouting random COBOL code?
Or 4-7 years experience in SOMETHING (different from what you need), which is what you normally get.
I knew there would be problems if you got Bob Shawadiwadi in, plenty cheapness!
people that were recently laid off in favor of Indian alternatives would buy into this story.
Not sure it's that impartial.
Replace "laid off" with "chose to leave when offered the opportunity".
You never had the "opportunity" of working with them.
Look at landrover/jaguar, now indian owned and run and doing very nicely despite the economy. Nothing wrong with offshoring, but having seen the way it was done at RBS I can only say that it was ONLY cost that was factored in.
QUALITY went out the window.
Actually, I did... I worked there for seven or so years, I left when I was offered the opportunity of a big wedge of redundancy payment. I worked with Indian staff for the last couple of years, some of whom were pretty good, but most didn't stay long enough to become pretty good or learn the systems.
chose to leave when offered the opportunity
The term used by spineless RBS HR was "workstack reduction"
@AC 12:31 GMT
"I worked with Indian staff for the last couple of years, some of whom were pretty good, but most didn't stay long enough to become pretty good or learn the systems."
That is exactly the problem I found in other developing countries. The bright ones you train up to take over from you soon get better offers elsewhere.
They actually called it 'staff augmentation' where I work :)
Remind me of the Borg for some reason...
Anon for obvious reasons
"Augmentation" reminds me of hilariously coy 1980s Harley Street adverts for surgical bosom-boosting in the Daily Heil.
Entirely correct. And who proved to be have such an entirely unsuitable experience type and length that they completely closed down the freshly purchased Indian company in <= 2 years. Of course that still leaves them with them problem of having closed the first office that had the experienced Euro product developers in it.
But the time zone was the real killer, for W. Coast USA -> India,
or UK-> India
or even better W. Coast USA + UK + India developer team meetings on videoconf.
Like, forget it.
Who wants to get up middle of the night every week maybe for 2 days every week to talk to their team?
Clue- Silicon Valley is approx 12.5 hrs behind India.
Well, if you pay peanuts.....
That's not even the problem... the real problem is that when another employer pays 0.001% more, they are gone by the end of the week.
"UK-based piece of software" does not mean it's overseen by UK-based staff.