June 28, 2004 Program Summary

“Secrets for Making Silicon Valley Professional
Opportunities Work for You on the Central Coast”

by Adele Sommers, Bruce Mills, and Michael Raphael;
photography by Mary Meyer

Speaker Beau CainUsing a sound business case approach, we can compete successfully with offshore outsourcing by getting clients or employers to “outsource” the same projects to technical communicators living on the Central Coast.

That was the theme of our June 28th presentation by STC Region 8 leader Beau Cain, a veteran technical communicator with extensive experience in career management (see speaker details near the end). Beau outlined strategies for taking advantage of career options in the Silicon Valley — and elsewhere, for that matter — without having to relocate.

As many technical professionals are well aware, offshore outsourcing is a rapidly growing business trend in which U.S. companies bypass domestic talent to seek lower-cost, English-speaking professionals in other countries, such as India.

Yet according to Beau, misunderstandings about the financial advantages of outsourcing abound. Further, the playing field is continually evolving as successful offshore countries achieve a higher standard of living. As a case in point, India's perceived advantage as a cheap labor source now faces challenges from newer entrants, such as Romania and the Philippines, which have lower costs of living.

The real outsourcing costs revealed

A common misconception is that advertised offshore salaries will translate directly into actual project costs. Due to several hidden cost factors, however, foreign labor can be much more expensive than it appears, even in the best case scenarios. To compete with offshore skilled labor suppliers, you have to take a different tack, said Beau. Here are some of his key points:

Research is our ally. According to Beau, the jackpot here” is the research done on the true costs of hiring workers in other countries — research that shows it can really cost from four to six times the $10,000 salary paid to a technical writer in India, for instance. We can use these types of analyses to convince potential clients or employers that domestic labor is just as competitive, or even less expensive, than offshore outsourcing. And the cost of skilled labor on the Central Coast is an important element of that equation!

Outsourcing is a major investment. Outsourcing is not just a 'throw-it-over-the-wall' process, Beau explained. It's a long-term investment. For example, companies typically need to build one full year into a project schedule just to overcome cultural differences.” Companies looking for a quick financial fix usually aren't taking this cultural adjustment into account. As a result, they experience significant cost overruns or other symptoms of mismanaged projects.

You can calculate your own scenarios. In an article entitled The Hidden Costs of Offshore Outsourcing that appeared in the September 1, 2003 issue of CIO magazine, Beau called our attention to a couple of interactive worksheets that will let us do the math to calculate the hidden costs of outsourcing. You can explore both best case and worst case outsourcing scenarios by entering contract values into a detailed version of the worksheet.

  • Best cases: In the best scenarios, managing the contract tends to be the most expensive factor. Total hidden costs from all factors combined typically average 15.2% of the contract value.
  • Worst cases: In the worst scenarios, lost productivity/cultural issues tends to be the most expensive factor, and this varies widely depending on the maturity of the offshore vendor, an understanding of cultural differences, the rate of turnover among offshore workers, and the length of contract. Total hidden costs from all factors combined typically average a whopping 57% of the contract value.

Remote project management matters. In the best outsourcing scenarios, Beau elaborated, companies successfully blend talent from around the globe — including, one hopes, from the US— into international virtual teams. However, to be successful, these projects need managers who are specifically skilled in directing remote teams.

And even with the cultural and language issues resolved, time zone differences will require projects to adeptly orchestrate synchronous activities, such as phone, Web, or video conferences, he emphasized. Since offshore and US workers typically sleep at opposite times, someone must decide which groups will work at night to allow direct interaction among team members.

Weaving the economic arguments into a business case

Every company has to be profitable, Beau said. Accountability matters in all aspects of company operations. So the technical communicator must demonstrate an awareness of financial matters from the project level on up to earn management's respect. We won't get respect merely from being great writers, editors, technicians, and designers. We must be vitally concerned with the company's profitability.

So how do we convince companies planning to outsource projects overseas to send them to the Central Coast? First, companies already committed to any type of outsourcing may be particularly receptive to a pitch from someone on the Central Coast. Second, according to Beau, we have two strong sources of arguments for domestic outsourcing:

Economic benefits - maximize profitability, and potentially, return on investment (ROI), using one or more specific strategies.

Intangible benefits - such as the peace of mind that comes from working with competent professionals who intimately understand the culture, speak and write the language correctly, work to best practices, have minimal time zone differences, and are close enough to drive or hop on a plane if a face-to-face meeting becomes necessary.

Don't assume the other party (client or potential employer) understands best practices, Beau cautioned. But remind them about worst practices — some of the many things that can go wrong when companies try to cut corners with inexperienced people. Sell peace of mind. Explain that you know how to save money with best practices. If the staff members are not as expert as you are, they should have it catered’ and let you take care of that particular area of production,” he advised, referring to the wide range of technical communication functions.

Where a choice exists between domestic and offshore outsourcing, Beau suggests emphasizing that the more familiar a technical communicator is with the culture and communication style, the less time it takes to produce predictably effective material. That level of familiarity entails an extensive knowledge of the audience's culture.

Key #1: Use the right economic arguments. To effectively frame the economic benefits, we must clearly understand how and when to use the strategies, Beau said. He recommends developing a business case designed to persuade one or more particular groups or levels within the organization. The case might contain different types of economic arguments designed for each audience. Here are some of the fundamentals.

Note: Beau credited much of his discussion on developing business cases to material authored by Bonni Graham, our former STC Region 8 leader. Links to her material appear in the resource section further down on this page.

Disclaimer: Based on Beau's presentation, Bonni's foundation material, and other sources, our chapter has created its own interpretation of the business case strategies. The overviews and tools that appear in the figure and tables below represent our best efforts to provide a set of practical guidelines. For anything other than illustration purposes, these interpretations may appear to be oversimplified. Please consult a CPA if you need more information on accounting practices.

Since your business case may include one or more strategies to maximize profitability over the life of the product, it's helpful to understand how net profit is calculated.

Figure 1. The Standard Net Profit Formula

Standard formula for calculating Net Profit


Next, Table 1 shows, in general terms, how you can apply three types of business case strategies to increase profitability (and potentially increase ROI):

  • Cost Avoidance
  • Cost Reduction
  • Increased Revenue

Table 1. Three Key Strategies with Examples

Cost Avoidance

When: Before the project is funded...

An organization can avoid future costs by planning or investing in cost-minimizing tools, methods, technologies, or resources.

Methods can include product or process optimizations to generate products or services faster, better, or cheaper.

The target audience for this type of business case is typically executive level management if the optimization will affect the entire bottom line (for example, by shortening cycle time, increasing yield or throughput, or reducing inventory).

These cases may also apply to the operating levels for any improvements that occur within individual departments.

Process optimization, which can help technical professionals create products faster, better, and more reliably, include:

  • More efficient tools, such as up-to-date software applications
  • Development computing equipment that mirrors or exceeds what target audiences will be using
  • Standardized processes that involve technical communicators in every aspect of product development

Product optimization (such as providing dynamic, Web-based Help in lieu of static product-embedded Help) can speed product updating and minimize the cost of maintaining future products and upgrades.

Cost Reduction

When: After the project is funded, and a cost baseline is established...

The organization can make the most of what it's already spending by channeling funds for new purposes.

Methods can include product or content improvements to help reduce product support costs. There are two options:

  • Reduce COGS - by decreasing the cost of labor, materials, order fulfillment, restocking, shipping, etc.
  • Reduce G&A - by decreasing indirect labor or other costs of operation.

Target audiences for this type of business case are typically the operating levels, such as Production and Customer Support.

High-quality, usability-tested product designs or redesigns (of interfaces, Web sites, Help, tutorials, training, manuals, etc.) can help reduce COGS by:

  • reducing return processing costs
  • minimizing inventory of returned products

...and can help reduce G&A by:

  • reducing technical support costs (requiring less phone and onsite support)
  • reducing maintenance costs by minimizing error correction releases
  • reducing training costs (NOTE: Training also might represent a revenue center, so using this strategy may result in a weaker argument)
Increased Revenue

When: After the project is funded, and a revenue baseline is established...

The organization can increase sales revenue by increasing product demand, making the product easier to sell, or minimizing returns.

Methods include product or content improvements to increase the marketability of the product.

Target audiences for this type of business case are typically the operating levels, such as Sales and Marketing.

High-quality, usability-tested product designs or redesigns (of interfaces, Web sites, Help, tutorials, training, manuals, etc.) can:

  • increase marketability and sales
  • contribute to customer goodwill
  • minimize lost revenue from product returns
  • minimize the need for product discounts


Key #2: Use the right lingo. Now that we have ideas for framing the economic arguments, we need to communicate our business cases in the language of our applicable audiences. These audiences may comprise one or more functions, departments, or management levels in the organization. Beau explained that some of them are more familiar with technical communication than others. Therefore, “speak their language,” he counseled. Know what they want to talk about. Be able to show things such as how good documentation reduces support costs,” for instance.

Here are examples of departments and functions, along with some of their key concerns and phrases (listed in order of the most to least familiar with technical communication).

Table 2. Possible Audiences for Our Business Cases

Cares About
Key Phrases
Product Development

Speed, quality, and cost.

Delivery dates, cycle time, metrics, zero defects, TQM, Six Sigma, Balanced Scorecard, ISO 9000, and earned value ratios (percentage of spent labor hours against percentage of work completed compared to the total budget).
Customer Support Customer relationship management (CRM), problem tracking, reducing customer callbacks, reducing the time on calls, shortening problem resolution cycles, and customer satisfaction. First-call statistics, time on call, satisfaction survey data, and customer goodwill.
Sales and Marketing Company and product reputation, meeting sales goals, customer demographics, positive product reviews, competitive market data, and close rate. Features and benefits, market penetration, value, selling points, distinguishing characteristics, customer retention, and satisfiers.
Finance Justifying costs in terms of revenue, using facts and data. ROI, cost avoidance, cost of goods sold (COGS), and general & administrative (G&A) costs.


(C-Level: CEO, CFO, CIO, etc.)

Optimizing capital investment for maximum ROI, strategic planning, strong financials, and market positioning. Business case; critical business indicators; strengths, weaknesses, opportunities, and threats (SWOT); cost avoidance; supplier partnerships; ROI; return on net assets (RONA); and shareholder value.


Key #3: Put it all together. A simplified framework for a hypothetical business case appears below. It targets specific audiences and aims to increase profitability through a mixture of Cost Avoidance, Cost Reduction, and Increased Revenue strategies.

Table 3. A Hypothetical Business Case Example

Key Ideas
Onshore Outsourcing Arguments

Cost Avoidance


Cost Reduction

Cost Avoidance: On a new project, the organization can avoid future costs by planning or investing in cost-minimizing tools, methods, resources, or technologies.

Cost Reduction: On an existing project, the organization can make the most of what it is already spending by considering the use of new suppliers, for example.

Target audience: Executive level and Production

Point #1: Instead of sending work overseas, consider outsourcing projects onshore to skilled Central Coast professionals.

Point #2: When all offshore hidden cost factors are considered, our work will cost less in comparison, thereby minimizing the total cost of the product.

Point #3: Let's not forget the peace-of-mind benefits associated with our being relatively local.

Cost Avoidance


Cost Reduction

Cost Avoidance: Organizations can use product or process optimization to generate products or services faster, better, or cheaper.

Cost Reduction: Organizations can use product or content improvements to help reduce support costs, by reducing either COGS or G&A.

Target audience: Production and Customer Support

Point #4: We guarantee to do better work using best practice methods to create clear, high-quality interfaces, Web sites, manuals, Help, training, tutorials, etc. We can design or redesign your material for optimal results.

Point #5: Our work can reduce phone and onsite support costs, reduce return processing costs, minimize inventory of returned products, and reduce the need for error correction releases.

Increased Revenue

Organizations can increase sales revenue by increasing product demand, making the product easier to sell, and/or minimizing returns.

Methods include product or content improvements to increase the marketability of the product.

Target audience: Sales and Marketing

Point #6: Using your customer feedback, we can design or redesign your product interfaces, Web sites, Help, tutorials, training, manuals, etc.

Point #7: Our approach can increase your product marketability and sales, boost customer goodwill, minimize lost sales revenue due to product returns, and eliminate the need for product discounts.



A review of the highlights. Beau's packed presentation provided tip-of-the-iceberg insights into ways to persuade companies to outsource work to the Central Coast. Here are the highlights:

  • Research your arguments. Gather your data and plan to prepare a cogent and persuasive business case — it's a powerful tool for many different purposes, regardless of whether outsourcing is at stake.
  • Select your economic strategy(ies). Frame the economic benefits in terms of strategies that will maximize profitability and potentially improve ROI.
  • Include offshore-onshore comparisons. To create an effective onshore outsourcing case, include offshore cost estimates as well as onshore cost and peace-of-mind comparisons.
  • Target the right audience. Communicate the business case to the right parties using terms they'll understand.

Areas requiring further research. We've also identified some of the topics we'd like to know more about:

  • Specifics on how to approach and apply the techniques to Silicon Valley companies.
  • Detailed examples and instructions for creating various types of business cases.
  • Techniques for scaling a business case for companies of different sizes.

Feel free to contact Beau directly with your questions at ds8@stc.org.


To access related resources and information: (Need Acrobat Reader?

1) Beau Cain's presentation (coming soon).

2) Links to Bonni Graham's presentations on developing business cases and proving our worth. (These are some of the materials on which the above SLO STC June 28th event were based. Bonni is our former STC Region 8 Director-Sponsor.)

3) Proceedings from the 2003 LavaCon conference, which include expanded presentations by Bonni Graham and others on developing business cases.

4) Relevant links and articles from CIO magazine:

Secrets for Making Silicon Valley Professional
Opportunities Work for You on the Central Coast
Date: Monday evening, June 28, 2004

Beau Cain is a technical communication consultant in Silicon Valley and an instructor for San Jose State University. Beau formerly worked for two outplacement firms in Houston, Texas, during the notorious oil crisis of the mid-1980s. He learned how to consider his time, talent, and experience as valuable commodities that can be negotiated, along with learning how to target résumés to get interviews, and how to interview to get contracts.

Beau served the Silicon Valley chapter of the Society for Technical Communication as Public Relations Manager, Employment Information Manager, and President, and he is currently serving a three-year term on the Society's Board of Directors representing Australia, California, Hawaii, Nevada, and New Zealand.


Secrets for Making Silicon Valley Professional Opportunities Work for You on the Central Coast. Despite all the local anger about it, offshore outsourcing can prove helpful to technical communication professionals who wish to live on California's beautiful Central Coast while working for companies headquartered in Northern or Southern California (or elsewhere). If companies can save money by having work done remotely, then perhaps that work can be done by qualified professionals living on the Central Coast, between the two major technology centers of Los Angeles and Silicon Valley.

However, locals wishing to do so must be prepared to demonstrate economic benefits for those companies who may be considering outsourcing work to our colleagues overseas.

Beau Cain demonstrated how to use two business case approaches that may help persuade companies to outsource work locally rather than outsource it overseas. His presentation included a discussion of career strategies and job interviewing tactics that require a competitive attitude.


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