June 28, 2004 Program Summary
for Making Silicon Valley Professional
Using 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.
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:
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.
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
Next, Table 1 shows, in general terms, how you can apply three types of business case strategies to increase profitability (and potentially increase ROI):
Table 1. Three Key Strategies with Examples
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
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
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:
Areas requiring further research. We've also identified some of the topics we'd like to know more about:
Feel free to contact Beau directly with your questions at firstname.lastname@example.org.
Secrets for Making Silicon Valley Professional
Opportunities Work for You on the Central Coast
|Date:||Monday evening, June 28, 2004|
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.