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Mydriaz

Outsoursing your HR's offshore (An open debate)

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Hey everyone, I want to start an open debate on this subject to find out what people think on this subject. Here is a quick background: I recently posted a Help wanted thread on this forum (link)to find some extra help to finish our project. Responses where far above what I had expected (Thanks everyone) In the multiple offers we received there was a couple that came from companies offering to outsource the majority of our Human Resources (coding, modeling, texturing etc...) to them. These companies where from emerging economies like Asia and Eastern Europe. One of them offered us a team of 10 full time workers in all fields of production for around 1000$ a week. Here is what I posted on the subject
Quote:
One of them offered us a team of up to 10 people working full-time on our project for under 1000$ a week. That’s insane! That was a very tempting offer but we refused for multiple reasons: 1- I’m all up for encouraging emerging economies, but I would like to be able to say that our titles are Fait au Quebec (Made in Quebec). I would like to keep the overseas outsourcing to a minimum. 2- I don’t like the idea of working trough multiple peoples. Obviously the team would work trough a Team leader. I talk to him, he talks to the team, they talk to him and he gets back to me... That’s way to complicated and rarely works as smoothly as it sounds and your bound to get a few communication issues (Telephone game effect: Guy#1 says: "Please change this line of code" -----> Guy#4 Hears: " I like your sister") 3- I love to see Asian companies bring us amazing video game titles (Go! NIS and ATLUS!) but I find there is something deeply wrong with North American companies outsourcing all their work offshore to save some money. But that’s a debate that I will start on another thread.
So basically this Thread is to debate reason # 3 (or 1 and 2 also if you want) Do you think it’s a good thing for companies to outsource their Human Resources to offshore companies that can offer the services for a fraction of the price?

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Do you think it’s a good thing for companies to outsource their Human Resources to offshore companies that can offer the services for a fraction of the price?

Going with the lowest price may not be the actual lowest price. [grin]

There must be a lot of communication between all the development staff. When the producers are off site from the developers it can be very difficult to coordinate and communicate effectively. Simple "step in to my office" meetings don't exist. Discussions must be scheduled with enough notice, and must be coordinated with the two different time zones. You will pay a fortune for international phone calls and teleconferencing, although the prices are dropping thanks to VoIP. The extra communications burden puts a strain on the human relationships, and that negative issue finds its way into the product.

Often there are cultural barriers. Both groups will assume that the other assumes certain cultural beliefs. Something you say or do may deeply offend the other party. In-game elements will reflect the cultural biases. One common one is for people to bow when greeting, or show societal deference that is not found in Western society. Similarly, outsourcing to countries going through de-Russification often demonstrate their own cultural variance.

International contracts are very difficult to work with, to craft, and almost impossible to enforce without a lot of money. Experienced lawyers can advise you to this often expensive "hidden" cost.

Non-native English is yet another issue you will face. India is popular in part because native English speakers can be trained to speak in American English. If developers speak Chinese, Korean, Slavic, or Baltic languages then you will face the difficulty of translation during your meetings. You will need to review the entire game to ensure it is translated properly to avoid statements like "All your base are belong to us," and "Somebody set up us the bomb".


Often these additional costs far outweigh the additional salary paid to local developers.

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I sent you an email regarding a similar proposal, a lot less formal, but similar nevertheless.You don't have to reply, I know what your position is already and I respect it.

1 - Its a valid point, I am not a fan of nationalism, but its your prerogative, personally I much rather see the © symbol next to my company or personal name than a place of origin.

2 - Unless you're managing a tiny team, you need to have project managers that translate your ideas into the language* spoken by the team, even if you're in the same building. Even if so, you'd have to be knowledgeable on the various areas of expertise in order to communicate your ideas to the team members in a way they understand, as well as to know the limitations of the technology you're working with.

3 - Its not as simple as just "saving some money", as the cost of production goes down so does the consumer price, and you have to stay competitive, what are your options?

Quote:

Do you think it’s a good thing for companies to outsource their Human Resources to offshore companies that can offer the services for a fraction of the price?


Well, I am from a country that has benefited a lot from outsourcing, so I guess you can say I am biased, still I think that whether it is good or not should be decided on a case by case basis.

*: programmers, artists or designers lingo, not actual human languages.

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Lots of companies try it and find it practically unworkable. Language barriers, the skills/experience of the other people, and just the whole timezone thing are all factors.

Sites like GetAFreelancer are full of Asian members but I don't know if those using the site are confident to pick them, even with the absurdly low bids they make. I know I beat such people on a couple of projects.

The one site I know which makes a real go from using Asian developers is TopCoder. Their payments are quite livable in the west, or extremely lucrative in the East - and software development contests are dominated by these countries. TC use a very rigid structure for making sure all software is thoroughly tested and reviewed.

If anyone registers there after reading this by the way, please list me as the referrer!

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Original post by ROBERTREAD1
Outsource everything that's non-core.

What's your core?

Please go back and read his post.

The issue was not about what to outsource. He is already going to outsource a specific portion of the work they do not wish do to internally. His concern was not about outsourcing stuff, but taking it offshore. His topic says "offshore", and his post talks about "overseas outsourcing" and using "offshore companies".

More specifically, the first two issues were about going with contracts in unspecified regions of Asia and Eastern Europe where labor costs are cheap, and working through multiple levels of international middlemen.

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@ Frob:

Great post, i totaly agree with you.

Quote:

Often there are cultural barriers. Both groups will assume that the other assumes certain cultural beliefs. Something you say or do may deeply offend the other party. In-game elements will reflect the cultural biases. One common one is for people to bow when greeting, or show societal deference that is not found in Western society. Similarly, outsourcing to countries going through de-Russification often demonstrate their own cultural variance.


This i find is the biggest hinderence to international outsourcing. Distance can be overcome by new technologies(VoIP, Skype etc...) Time zones can be worked around (I dont sleep much anyway) But cultural differences THAT can be quite a challenge to overcome.

Its quite obvious that you have to consider multiple cultural elements when dealing with foreing countries. (Dont ever give your buisness card to someone from the middle east with your left hand) Things you wold do normaly at home can easly make you look like an ass elswhere. But sometimes there are some unexpected cultural clashes with dealing with your neighbour.

Our company is based in Montreal, Canada. For most people around the world being Canadians makes us Americans by association. (Thats when they are not outright saying that I live in an igloo with polar bears. Yeah I got that once and he was serious) If you work physicly with us you would see that we are in fact from Montreal, Quebec, Canada. A French speaking province that has as much in common with the USA than we have with China. Cultural clashes are bound to happen. We dont share the same values or cultural quirks as Americans or our fellow Canadians. Making it work, thats the callenge. I think the general rule should always be if you require something from someone in another country its your job to eleminate the cultural gap as much as possible. If someone wants something from you its thier job to to the same.

The cultural diffences are what makes it interesting. Thats what i love about working with the international community, you get to see how other people live by experiencing a part of how they work. And after a while you find that pretty much everyone from every country is a nice guy. Just dont ever say that Hockey sucks to a Quebecois, its a cultural faux pas that is to be avoided in the spirit of all getting along

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@ Kwizatz

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1 - Its a valid point, I am not a fan of nationalism, but its your prerogative, personally I much rather see the © symbol next to my company or personal name than a place of origin.


I was suprised when you wrote nationalism. It got me thinking about what i wrote in point 1. At fisrt i tought: What is he talking about, this has nothing to do about nationalism. Its more about encouraging the local video game market by creating jobs localy. Then i tought about it a bit more and i would have to agree with you, there is a bit of nationalism in there to. I guess its a cultural quirk, in Quebec we are a bit more nationalist then the rest of America. Or then again it might just be me

Quote:
2 - Unless you're managing a tiny team, you need to have project managers that translate your ideas into the language* spoken by the team, even if you're in the same building. Even if so, you'd have to be knowledgeable on the various areas of expertise in order to communicate your ideas to the team members in a way they understand, as well as to know the limitations of the technology you're working with.


I agree wholeheartedly. But i think even a tiny dev team sould have a project manager. We recently started implanting the SCRUM project management method and even though we are not a big team ( 8 to 12 at anygiven time) it has helped us greatly in structuring all our production and concentrating all our work in a common direction. SCRUM also does wonders for gradual quality control I recommend that all project managers take a look at it if they can.

Quote:
3 - Its not as simple as just "saving some money", as the cost of production goes down so does the consumer price, and you have to stay competitive, what are your options?


This one nocked me over. Droping the cost of labor is not the only way to reduce the cost of production. I can agree that is the most obvious way but that way lead to the dark side of managing ( Profits are not what they sould be, lets cut in our biggest spending area. Hmm that would be Human ressources, lets lay off some workers) There are so many ways to get other aspects of your production costs down to a minimum. For most of them you have to use some real creative thinking and i wont go into them unless we sign an NDA ;) But in the end i would say that faced with the choice of not being able to produce because of production costs and outsourcing some of the work overseas... I would gladly outsource but only if all else fails.

Finaly i would also say that it should always be analysed on a case by case basis

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Each time I worked with outsourced developpers it was hellish. Communication problems, crappy work, etc. Seriously, software developpers need to meet face to face with the designed/producers on a daily basis. Its not as dramatic for artists, except animators, animators need to be on-site. Modellers and texture artists will still need to meet face-to-face with the art director from time to time. *Especially* when you are finaling the project.

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Outsourcing / offshoring goes well when the specifications are within tight bounds and processes are well-defined. Doing a console port, or doing the multiplayer version can be tightly bound on most cases. But developing a "feel" for a new game and refining gameplay as you go along is something that is ill-defined and highly unstructured to begin with. That's when cultural and communication problems cause projects to wreck. So although that's not the subject of the thread (offshore), what you are outsourcing is part of the overall issue.

-cb

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Quote:

Outsourcing / offshoring goes well when the specifications are within tight bounds and processes are well-defined. Doing a console port, or doing the multiplayer version can be tightly bound on most cases. But developing a "feel" for a new game and refining gameplay as you go along is something that is ill-defined and highly unstructured to begin with. That's when cultural and communication problems cause projects to wreck. So although that's not the subject of the thread (offshore), what you are outsourcing is part of the overall issue.

-cb


Hmm good point. Obviously what you have to outsource is going to be a key element in the succes of the endevour. As you say, doing a console port should be more strait foward and less subject to interpretation, so i would say that this would be a good thing to outsource. Widen de potential market for your game while minimizing production cost without comprimising on the artistic and/or cultural aspect of your project. So in contrast outsourcing / offshoring your artistic aspect would be a gamble at best.

But lets say you dont have a choice in this matter. Either you are in a region devoid of the production resources needed or you dont have the money to hire the resources at the local rate. What would be the best way to outsource in your opinion? (This is a question for everyone not just CB, although i would still like to know what you think on this since you also are from Montreal)

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Original post by Mydriaz
I was suprised when you wrote nationalism. It got me thinking about what i wrote in point 1. At fisrt i tought: What is he talking about, this has nothing to do about nationalism. Its more about encouraging the local video game market by creating jobs localy. Then i tought about it a bit more and i would have to agree with you, there is a bit of nationalism in there to. I guess its a cultural quirk, in Quebec we are a bit more nationalist then the rest of America. Or then again it might just be me


Oh, well, I have nothing against promoting the local job market, and I am glad we agree it sounded a bit nationalist, and that you cleared the confusion.

Quote:
Original post by Mydriaz
I agree wholeheartedly. But i think even a tiny dev team sould have a project manager. We recently started implanting the SCRUM project management method and even though we are not a big team ( 8 to 12 at anygiven time) it has helped us greatly in structuring all our production and concentrating all our work in a common direction. SCRUM also does wonders for gradual quality control I recommend that all project managers take a look at it if they can.


Good [smile]

Quote:
Original post by Mydriaz
This one nocked me over. Droping the cost of labor is not the only way to reduce the cost of production. I can agree that is the most obvious way but that way lead to the dark side of managing ( Profits are not what they sould be, lets cut in our biggest spending area. Hmm that would be Human ressources, lets lay off some workers) There are so many ways to get other aspects of your production costs down to a minimum. For most of them you have to use some real creative thinking and i wont go into them unless we sign an NDA ;) But in the end i would say that faced with the choice of not being able to produce because of production costs and outsourcing some of the work overseas... I would gladly outsource but only if all else fails.

Finaly i would also say that it should always be analysed on a case by case basis


Well, first, I never said anything about laying off any workers, you can open a new branch to expand your business abroad and not a single local worker needs to be lay off, it is a reality that sometimes companies don't do as well and they have to downsize, but downsizing is not synonymous with offshore outsourcing.
I am sure there are many ways to bring down costs, for example using lower quality raw materials (by the way I was speaking in general not just about the software industry), or hiring on the side of inexperienced workforce to cut their teeth with your projects, but I think on those cases the quality of your product may suffer, which may reflect on how well it competes once in the market.

IANAE (I Am Not An Economist [lol])

Anyway I honestly wish you the best of luck with your project. [smile]

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> What would be the best way to outsource in your opinion?

Again, you need to address the *what* part of outsourcing as well as the *how* part. Just solving the *how* part is not sufficient.

If you can find (a) component(s) of your game that an isolated group of guys can take on independently - say, the multiplayer lobby system, DCC plug-ins, - and those can be specified using tight bounds (ex: file formats, code interfaces, etc) then you are on a good start. Furthermore, you will ease communication and interpretation problems if you have strict business processes as well - for example, a well-defined RFM (request for modifications) process, objective acceptance criteria for the deliverables, precise platform performance specification (ex: which PC range you are targetting), etc. Those need to be clear in the contract. Then you need to put someone in charge who can bridge the teams, who has experience in those kinds of projects (and with a high degree of success), and hopefully can speak the language of your contractor(s).

Then you start to see why others have pointed out the increase in management overhead with outsourcing; you need a good lawyer to craft bullet-proof contracts, an experienced project manager who can blend in with the rest of the team while managing the contractors on a daily basis (good luck finding one!), and some extra budget to fly people across the globe if/when things go sour and on a regular basis for tracking progress.

The bummer in game development is that a big chunk of the budget goes towards the artistic side, so there is not a lot of opportunities in the creation pipeline that lends itself to outsourcing / offshoring. That's why I mentionned cross-platform porting and multiplayer add-on as potential candidates; the "look & feel" is already locked down and assets are pretty much frozen so the size of the 'sand box' a contractor can play with can be made very small.

-cb

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A fair amount of companies outsource Art Content to Asia; usually by having Concept Lead / 3D leads in-house, and then outsourcing modeling/texturing/animation of pre-concepted artwork. So if someone's done the style-guide, the concept art, and the content specifics, then outsourcing the actual work. This is what's happening with Codemaster's Malaysian Office. I believe EA Burnaby also outsources car-models for NFS to Matahari in Indonesia.

If you have a totally stand-alone component (like FMV), that's relatively easy to outsource. GlassEgg studios in Vietnam, for example, has done a lot of this for big west-coast studios.

We outsource all our music/sfx creation (to Somaton Studios, in LA). For us it just doesn't make sense to keep that resource in-house, and as a result we get some of the best in the industry. I suspect this is an underestimated aspect of outsourcing, lost in the nationalistic fever; sometimes the outsourcing company has specialized skills because this is ALL they do. The same is true for concept-art shops Imaginary Friends and Massive Black.

Another aspect of outsourcing that often gets overlooked is the ramp up/ramp down effect. You actually need the bulk of those content creators only for the main development (first playable -> beta). A lot of companies that don't have multiple projects running end up carrying that additional cost between projects (or even worse, throw the entire 80 man team on the initial prototype, drowning it in content and designers). Outsourcing allows you to keep a core team (the guys you want building the initial prototype/first playable), and then outsourcing the grunt work in the middle.

You might want to read this article from Wideload Games/Bungie Studios Co-founder Alexander Seropian on outsourcing. For those that still like to keep their national flag tightly wrapped around themselves, you'll notice that a lot of the outsourcing was to companies in the same city.

Anyways; I'll stop ranting now :)

Allan

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