Outsourcing, cheap markets - ethics

[pailhead]

Lately, I keep getting outbid by people from the 3rd world whenever i bid for a project that's not somewhere in my immediate vicinity.

I'm surprised that there is no ongoing thread on this subject, as I'm sure that a majority of us has dealt with unfair competition at some point or another in the last few years.

I kept looking for similar threads on this subject on a number of CGI/archviz forums, and most of them were pretty outdated with arguments that have been proven as wrong by now.

First to demystify some of the popular ideas.

1.) The communication problem - I don't think that it is a problem anymore. You can probably get a better line when using skype than when calling someone on their cell phone.

2.)The language barrier - While people complain that it gets hard to outsource to China for this very reason, the problem is non-existent when outsourcing to India.

3.)The quality - It's been greatly improved, to say that something is not good simply because its coming from over seas, is bogus.[/list]

4.)The fact that companies that deal with projects that are worth millions of dollars won't bother to save a few dollars by going overseas for something as not as important... well I never confirmed this as a fact. From my experience, yes even the richest clients will settle for a much lower price even if it means lower quality.



Another thing that surprised me is that a lot of people justify this competition as being fair, mentioning the free market, the global market, the fact that it's not just 3d that suffers and so on.

But another topic, which is rarely brought up is the issue of software piracy, which I believe, plays the most important role in this story.



OK so, global outsourcing has been around for a while, factories have been moved to cheaper economies, nowadays big companies all have their call centers in India, we all know the story about that doctor that sends x-rays to his colleague in India, and so on.


What bothers me is the fact that when a really large Company decides to outsource their production to a country like India, it has to make some serious investments - expenses. You can't set up a complex call center operation without a building and without equipment. The same thing goes for a factory, one needs to be built, and that's a considerable investment.

It's not like any Punjab Joe can set up his own operation and challenge the likes of dell. He has to wait for dell to be gracious enough to walk in with capital investments.


With 3d, especially with our line of work, it's a much different story. I am terrified with the way things are unfolding.

Investments are almost non-existant for two reasons. What used to be a $10k workstation just a few years back, it's now replaced by an inexpensive $1k rig. Everyone can afford to render.

Software is really expensive... for us. While you have to earn thousands of dollars to buy software, and upgrade it, our counterparts from the third world can simply download it for free.

While it's not feasible to spend too much money on latest updates, when you can get it for free it makes perfect sense!

And at last, the biggest threat of them all - EVERMOTION. At first i thought that the whole world having access to free high quality models was ridiculous, but when they started releasing fully set-up scenes, I was stunned.
Buying all that stuff, like libraries, training dvds, may turn out to be quite a hefty sum, and i'm sure that you always think twice before buying something like that. But when you're clicking on download links, i guess that the only thing you have to worry about it if you can afford another harddrive, because thats a very luxurious item for someone who thinks that 150 dollars is a fortune.


I could call the 3rd world competition fair, if there was no such thing as software piracy. It would probably take 50 years for people there to save enough money to buy all the equipment and software that they need, which means that we would have only companies that shifted their production to cheap markets, to deal with.

And if you invest 100.000 dollars for 10 workstations, you won't go charging $100 for your renderings. You'll pay the poor CAD or rendering monkey $100 dollars, and you'll charge $5000 on your end.

And finally, this is the latest email that i've received.

http://www.archicadd.com/

The flashing $10/hr is the worst detail, it's looks like a porn site.

Now tell me, how many $10 hours do you think it takes to afford all the software and all the libraries that you own, and how much money would you be left with afterwards?

[studioDIM]

mmmh. will reply with some arguments later tomorrow.
I think you have some dough there.

Lele

[pailhead]

Please do, so far i haven't seen this topic discussed from this angle.

[Neilg]

From a reasonably neutral point of view (I'll leave the serious points down to lele ) every outsourced job ive been involved with or heard from has been a disaster - quick cash, but they wont last. Ive even seen a model done for a verified view which was outsourced (which we picked up, and had to re-model from scratch because it was completley fucked up). They can undercut you as much as they want, but at the end of the day, its quality and reliability that matters. If you can offer that, you'll get the repeat clients, and thats where you make your money.

Piracy and one man bands are one thing, but when you get a client that knows you can can deliver shit hot work on time and to a solid standard, it doesnt matter who you get undercut by.

[studioDIM]

Well, I actually meant to say that there is an inherent unbalance to start with.
Only it drives in the other direction: I could afford many things, when working in London for 200£ a day.
Computing hardware, legit software, nights out, a rent, and so on.
I would get loads of stress and insane hours as exchange for the money, of course, but that's pretty much true for any freelance, even though i never actually happened to top the 40hrs in a row i recorded once.

I then came back to Italy, and all of a sudden those kind of money evaporated. 1200 euros here are a monthly wage, not the result of 4 days of work.
Work's been a lot slower, the market a lot less educated in knowing what's good and what's not, competition came from students aged 20, with a fraction of the needs a 30 years old with his own house has.

I hear in HongKong 200 euros are a monthly wage.
I can't say for true, but i doubt the quality is far removed from what we can produce over here, for that amount of money (that is, i have seen crap models and renders coming from all over the world, be it London, the states or anywhere else).

It's just a fact of life, we "westerners" put this system in place, inflating our markets to the point of bursting (housing, basic goods costs and so on), and leveraging on an extremely quick turnaround of products with low quality. Consumerism, to use one word.
Buy something, it's cheap, it'll last little, you'll need another item of the same type soon.

We ought to ask the likes of Nike, Wal-Mart, IBM and so on,why that is.
In a situation where craftsmanship is to all effects dead, people do not look for it, and have serious troubles recognising it when they meet it.
How hard has it become to explain a client that cheap is bad, intrinsically?
We'd like to cost more because we care, because we had access to expensive training options, because we do things legit, because years of hands-on experience taught us to avoid or correct issues that always pop up during a production, because we bloody live in places where a pint is 5 euros, but we have constantly to perform an educational action on most of our clients, and still get price-cuts to hammer the point home.

My point is this: it's OUR cultural setup which is killing the market, not THEIR different living conditions that allow for cheaper work.

This said, though, i have just found, from a few months, a jolly good partnership with another craftsman.
He has top notch clients which can tell quality when they see it, because it's them, in the first place, which create quality items.
He pays good money, in a timely fashion, with no fuss.
It took me a good couple of years to find him, but boy i'll now do whatever i can not to let him go
It's maybe a drop in a vast sea, but i can assure you he's not the only one.

My suggestion is not to get tied up into blaming "them", but rather to concentrate on raising our own standards to a point where it is made clearer to any client why the choice should fall upon us.
It may take time, and effort, but it is our own to achieve, or to lose.

Flame on, now

Lele

[ene.xis]

My suggestion is not to get tied up into blaming "them", but rather to concentrate on raising our own standards to a point where it is made clearer to any client why the choice should fall upon us.
It may take time, and effort, but it is our own to achieve, or to lose.

Totally agree!
raising the standards is and will always be the key!
quality ads up an extra value to ur work wich makes it stand up from others...i ve had several ocasions were i was faced with ridicolous low budgets, and lost a few jobs...but fortunately for me they regreat it for too many reasons and deliver me the next jobs...
beside the obvious $ income, this gave my work recognition, and allowed me to have much more creative room!

of course quality isn t a static position...ur investement in new software, hardware, knowledge and thechnic has to be constant in order to provide u to raise ur work standarts above the rest...

other then that relating the third world to piracy is a little to much...i don t know about u guys but i face the same fact indoors...
and i guess i m not 3rd world....yet

[ShaunDon]

Very eloquently put, Lele, and I think you're right on.

I very much like your craftsmanship point, and it's especially true here in the U.S. The vast majority of people, even in creative professions, I feel are working for a paycheck and derive little satisfaction in exceeding expectations in their work. Then we penny-pinch the money we make by buying substandard crap that will fall apart in a few years just because its cheap.

In the end we've focused the bulk of our business on higher-end clients who know that our costs are very reasonable on the domestic scale and place more value on dependability and quality work. And when we come recommended by other clients, it's understood that we've earned a reputation that we will do everything to maintain. That's something that you can't expect when going far and abroad for our type of service.

Shaun

[pailhead]

Huh,

Do you think that there will be enough clients who are interested in our high set standards? Let's say that all of our standards in this thread are set very high, we produce high quality images in a timely and professional manner... but there is only one client who will buy that. Won't the simple laws of supply and demand turn our high standard service into a commodity?


And why are you so gentle to the fact tha piracy is shifting the whole industry down by a few steps? Sure i've seen a lot of crap models and renderings coming from all over the world, but just because they're crap doesn't mean that they should be sold for peanuts. In my book, those models and images should be sold for enough money to cover the expenses and a little premium, while outstanding quality and service should be sold for the overhead and a huge premium.

Because of software piracy, it is possible for every person in India, or a college student in Italy to undercut the market and sell something that is crappy, because no one is interested in paying tenfold for the same thing, simply because the merchant is not a thieving criminal.

[studioDIM]

because no one is interested in paying tenfold for the same thing, simply because the merchant is not a thieving criminal.

It's NOT the SAME thing
The quality, and this forum is testament to it, cannot and will not be the same.
What i suggest is double faced:
A) Believe in the hard work you do to get higher standards, as it's fed from places like this one.
B)The whole mindset of piracy first, quality last is the same that feeds the minds of those who think a TOOL will do the JOB, rather than their ART making it true.

I'm "soft" on piracy because i know for a fact it's real, and eminent as a PHASE in the development of good skills.
But when you have a lot of choice (a search on emule) you also focus less, and hence achieve a lot less.
You can't, anyways, ask a person with 300$ a month to buy a 1200$ software (plus the host one, hey) in good conscience.
Turn to our own mindset for revenge, not unto them

Lele

[pailhead]

I don't really understand the point you are trying to make. This forum might be a testament to something, but so is evermotion.

Architectural illustration cannot always be referred to as art, it's more of a craft. And i really don't like the idea of having to become an artist, because all of a sudden that is the only way to sell my product.

[unknown]

"Architectural illustration cannot always be referred to as art, it's more of a craft. And i really don't like the idea of having to become an artist, because all of a sudden that is the only way to sell my product."

i guess it depends on how you work. people that bash out renders, with bad views bad modelling, bad lighting, and no major photoshop work, then yeah. but its artistry, good creativity, good artistic skills in colour, light form and composition. if your not doing that, then there is something wrong.

its what sets the 'we do renders for cheap' from the 'we produce the best images possible'

that links into the other thing. being undercut.....im not too worried, and i dont want to work with people whos only focus is price. quality of work and reputation speaks for itself, and will bring clients that want to pay for it.

[mdi]

its never really effected me, though im sure one day it might.


What I always think it strange is that client try to find work cheeper abroad....wheres the logic in spending £100,000 - £20 million on a housing development or a single building or whatever and trying to save a few £££ on the visuals?

Iv had one client who used a viz firm from Russia...according to him the work was good, but..... Time zones made everything a nightmare, certain british phrases where lost in translation...and even though it started cheeper, once they finaly got the final image he said the saving was not worth it.

Personaly I think the whole outsoarcing thing is blown out of all proportions (mostly by Americans), its already been said before.. the west is pretty much resposible for it...its just somthing we are all going to have to get used too

[studioDIM]

I don't really understand the point you are trying to make. This forum might be a testament to something, but so is evermotion.

With all due respect to evermotion, this forum is WAY above the standards that are shown there.
The quality of most posts is higher, the precision in nailing issues with the tool of choice is very very high, there is a developer and the tech support chiming in every day to answer.
It's not the same of a forum which is there so that people may buy the collections and bits, a forum open to posting to just anyone, ultimately, a commercial project with a definite goal.
Here, you buy first, post later.
There, is the exact opposite.
I'm sure you can well appreciate what the difference is.

Lele

[thablanch]

What I always think it strange is that client try to find work cheeper abroad....wheres the logic in spending £100,000 - £20 million on a housing development or a single building or whatever and trying to save a few £££ on the visuals?

Belive me, even biggg compagnies are trying to do that, but they are trying to to it at every level of the business,

Decisions in bigger compagnies are taken by people who don't care about the end result, they just care about the bill, so they are looking good to upper managment.
So if my visuals are way better than the outsourcing compagny, but i'm twice the price, I have to fight a lot more with a big compagny that with the small architecture business, corner of the street, that wants to meet me, know me and be able to make a little ajustment to the image 30 minutes before his meeting.

I guess it is all back to the service industry, price vs service... (mabee that's why Walmart and friends are doing so great...)

[teabag]

hello pailhead,
i would like to know what exactly is your definition of the third world in geographical terms.
Evermotion as far as I know is polish company, which is located in the centre of EUROPE...not sur eif i got it right from your post but if u call Poland 3rd world then thats a bit ridiculous. I am not a big fan of Evermotion as some of their stuff is cooked really quickly and some of their Archinterior models are a real pain to decompose. On the other hand their comunity brings the know-how to a vast majority of 3d enthusiasts and professionals which makes the market a real challenge, which in my opinion is great. It makes me try even herder each time i start a new project.

When it comes to pricing....quality should reflect the price....if the client wants low quality render for evaluation purposes at low price ...then so be it....i can come up with such a render within a day and set its price equally.

I would not blame any "3rd world" country (as u call it) for flooding western markets (west is a very subjective term) with cheap viz....take a look at the viz companies in the UK....there is loads of them exporting viz exactly to those countries u were talking about...

there is no such thing as dumping.....if one i capable of producing good render at a good (in someones eyes) cheap price i dont mind its good for him...let him make some money...those people need them!!! and if he uses pirated software thats is his problem if he gets a good sleep....question of honor i guess

there is so many opportunities for viz on almost any market nowadays...its only how u approach the clients, what u can offer them in terms of services, quality etc....work is everywhere u just need to grab it...with the developement of internet technologies, software and hardware, sooner or later this industry will become a gold mine....until then try hard to become a real pro in all aspects (artistic, modelling and lighting skills) and u will be set

its always easy to blame others. no need to get upset about job stolen by someone else

Best regards

Martin