21 May 2010
08:23 am

Drupal rates disconnect

There is a huge disconnect between american and asian market (mostly indian) when it comes to rates charged by drupal shops, I have not seen indian drupal shops charging over 40-50$/hr however established and number of years they have been in business. North American and European clients usually turn towards India, China to cut their costs and is but obvious that an attempt for straight comparison would be stupid, but even when you talk about proportions the best shops have a difference of over 6 times when it comes to per hr rates (50$/hr in comparison to 300$/hr)

Why do you feel there is so much difference? Some things that comes to my mind:

1> The perception that going to india/china means multifold cost cutting.

2> Perception (and to some extent the fact) that the efficiency of these shops is much less than that of american/european counterparts (I am actually interested in efficiency aspects and how it affects the rates)

3> Quality delivered?

4> Lack of community participation -- I feel india has never had the right attitude towards open source software, we love to use them but dont wanna waste time contributing back (except for a minority) and we fail to understand how open source contribution is implicitly affecting our reputation and hence rates (Though, its a refreshing change to see that 6 out of 18 students are indians as part of drupal GSOC 2010)

5> We cave in at the looks of $'s and the fact that there are freelancers in abundance who would work at 5$/hr and more often than not do shitty job coz they agreed at a very low rate in the first instance and wrong estimations to win the project.

Would love to know what do you think? Do you feel there is a disconnect or thats the norm in all outsourcing businesses irrespective of technology and service? Are the clients who come to india are happy with the service they get or they are just happy about the prices they get?

P.S -- At some level, I also feel that we would loose these jobs and projects if it was not for the low rates, and the fact that there are so many of us. Every 3rd of us claims to write php and html as we have passed from an engineering course.

almost 2 years ago jacobsingh responded:

I think you've touched on all the major points. The reality is that both sides of the pond screw up the relationship.

I think the primary thing Indian contractors can do to raise their rates is communicate better. Americans like high touch communication about the project status and do not tolerate even slight dishonesty (unless it is from a politician or CEO, than we forgive for some reason). Not everything has to go perfect, but everyone need to know ASAP. Modern Indian culture has serious problems (IMO) with honesty. It is expected that everyone will lie to your face and you will forgive them. Not the same in the US. If someone lies once, they are likely to never be trusted again, even for small stuff.

Also, you've got to apologize to customers *every time* you miss a delivery, even if you forget to email them on Friday like you said, etc.

Re: Quality: There is poor quality everywhere, but US firms are able to mask it better because they are inherently more trusted (racism), and more importantly, they are able to communicate in a language which convinces the client that they did the best they, or anyone could have done.

People make decisions with their heart, not their head. That means it is based on the relationship. It's just easier to get to know people from your similar cultural background. Hence, we have good old boys networks and white privilege which is totally unintended in most cases, but a very very real problem.

If I was to start a shop in catering towards Americans in India, here's what I would try to do differently:

1). Stringent interview process. I would only hire people who had self-directed experience and enthusiasm. College degrees mean nothing unless they are from an IIT, and even then I want to see passion and creativity.

2). Team orientation, personal growth labs. I feel US companies need to do more of this and discount the relationships within companies, but I would insist that we spend time establishing ground rules of honesty, open criticism and 100% customer focus.

3). Infrastructure and Capital: Pay few people the best rates, give them the best machines and connections and employ them full time and deliver high value. This means being cash strapped at the beginning and maybe running red for 6mo to a year. That's okay.

4). English skills. Absolutely no mistakes and no silly lolcat language, especially in client communication. If someone's english is poor or sloppy and they are too brilliant to not hire, I would pay them to improve it and firewall their communication until it was better.

5). Agile. I'm surprised you don't see more and better agile shops in India since I think it lends itself to the culture of teamwork, mentorship and supporting each other.

Best,
Jacob