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AI is predominantly replacing outsourced, offshore workers

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Re: AI is predominantly replacing outsourced, offshore workers

#41

Post by crazygringo »

candiddevmike wrote: post #12

> Despite $30–40 billion in enterprise investment into GenAI, this report uncovers a surprising result in that 95% of organizations are getting zero return. Oof

This is no different from the personal computer, and it is to be expected.

The initial years of adopting new tech have no net return because it's investment. The money saved is offset by the cost of setting up the new tech.

But then once the processes all get integrated and the cost of buying and building all the tech gets paid off, it turns into profit.

Also, some companies adopt new tech better than others. Some do it badly and go out of business. Some do it well and become a new market leader. Some show a net return much earlier than others because they're smarter about it.

No "oof" at all. This is how investing in new transformative business processes works.

Re: AI is predominantly replacing outsourced, offshore workers

#42

Post by donperignon »

Yes, I agree. And it is not that AI is any good, but those outsourcing shops are most of the time not adding any value, all the contrary takes time to babysit them. Some of this even look like an elaborate scam, someone in the organization launder money through this companies somehow, otherwise I don’t understand how they are useful. Obviously there some good ones, but in my experience is not the norm.

Re: AI is predominantly replacing outsourced, offshore workers

#43

Post by thisoneworks »

cantrevealname wrote: post #38
jcfrei wrote: post #14

IMHO this is going to be part of a broader trend where advancements in AI and robotics nullify any comparative advantages low wage countries had.

> AI and robotics nullify any comparative advantages low wage countries had If we project long term, could this mean that countries with the most capital to invest in AI and robotics (like the U.S.) could take back manufacturing dominance from countries with low wages (like China)?

Hard disagree. You can't just one day wake up and double your energy infrastructure.. China is way ahead.

Re: AI is predominantly replacing outsourced, offshore workers

#44

Post by Aurornis »

cantrevealname wrote: post #38
jcfrei wrote: post #14

IMHO this is going to be part of a broader trend where advancements in AI and robotics nullify any comparative advantages low wage countries had.

> AI and robotics nullify any comparative advantages low wage countries had If we project long term, could this mean that countries with the most capital to invest in AI and robotics (like the U.S.) could take back manufacturing dominance from countries with low wages (like China)?

Manufacturing isn’t one uniform block of the economy that is either won or lost. US manufacturers focus on high quality, high precision, and high price orders. China excels at factories that will take small orders and get something shipped.

The reason US manufacturers aren’t interested in taking small volume low cost orders is that they have more than enough high margin high quality orders to deal with. Even the small-ish machine shop out in the country near the farm fields by some of my family’s house has pivoted into precision work for a big corporation because it pays better than doing small jobs

Re: AI is predominantly replacing outsourced, offshore workers

#45

Post by PhantomHour »

ckorhonen wrote: post #25
jcfrei wrote: post #14

IMHO this is going to be part of a broader trend where advancements in AI and robotics nullify any comparative advantages low wage countries had.

I don’t fully agree. Yes, AI can be seen as a cheaper outsourcing option, but there’s also a plausible future where companies lean more on outsourced engineers who are good at wielding AI effectively, to replace domestic mid-level roles. In other words, instead of nullifying outsourcing, AI might actually amplify it by raising the leverage of offshore talent.

Consider the kinds of jobs that are popular with outsourcing right now.

Jobs like customer/tech support aren't uniquely suited to outsourcing. (Quite the opposite; People rightfully complain about outsourced support being awful. Training outsourced workers on the fine details of your products/services & your own organisation, nevermind empowering them to do things is much harder)

They're jobs that companies can neglect. Terrible customer support will hurt your business, but it's not business-critical in the way that outsourced development breaking your ability to put out new features and fixes is.

AI is a perfect substitute for terrible outsourced support. LLMs aren't capable of handling genuinely complex problems that need to be handled with precision, nor can they be empowered to make configuration changes. (Consider: Prompt-injection leading to SIM hijacking and other such messes.)

But the LLM can tell meemaw to reset her dang router. If that's all you consider support to be (which is almost certainly the case if you outsource it), then you stand nothing to lose from using AI.

Re: AI is predominantly replacing outsourced, offshore workers

#47

Post by [deleted] »

donperignon wrote: post #42

Yes, I agree. And it is not that AI is any good, but those outsourcing shops are most of the time not adding any value, all the contrary takes time to babysit them. Some of this even look like an elaborate scam, someone in the organization launder money through this companies somehow, otherwise I don’t understand how they are useful. Obviously there some good ones, but in my experience is not the norm.

[deleted]

Re: AI is predominantly replacing outsourced, offshore workers

#49

Post by segfaultex »

donperignon wrote: post #42

Yes, I agree. And it is not that AI is any good, but those outsourcing shops are most of the time not adding any value, all the contrary takes time to babysit them. Some of this even look like an elaborate scam, someone in the organization launder money through this companies somehow, otherwise I don’t understand how they are useful. Obviously there some good ones, but in my experience is not the norm.

Yeah I think this will be a noticeable trend moving forward. We've frozen backfills in our offshore subsidiaries for the same reason; the quality is nonexistent and onshore resources spend hours every day fixing what the offshore people break.

Re: AI is predominantly replacing outsourced, offshore workers

#50

Post by xenotux »

jcfrei wrote: post #14

IMHO this is going to be part of a broader trend where advancements in AI and robotics nullify any comparative advantages low wage countries had.

> IMHO this is going to be part of a broader trend where advancements in AI and robotics nullify any comparative advantages low wage countries had.

Then why hasn't it yet? In fact, some lower-wage countries such as China are on the forefront of industrial automation?

I think the bottom line is that many Western countries went out of their way to make manufacturing - automated or not - very expensive and time-consuming to get off the ground. Robots don't necessarily change that if you still need to buy land, get all the permits, if construction costs many times more, and if your ongoing costs (energy, materials, lawyers, etc) are high.

We might discover that AI capacity is easier to grow in these markets too.

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