CAD Manager's Newsletter (#159)

27 Sep, 2006 By: Robert Green

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Calling All CAD Managers!
Don't forget to participate in my 2006 CAD Manager's survey. As always, you have my assurance that your data will not be shared with anyone and your personal identity will not be disclosed. My only goal is to report on the state of the CAD management environment to you, my readers, in the November issue of Cadalyst magazine.

Outsourcing, Part 4: Looking at the Bigger Picture

Do the advantages of outsourcing outweigh the pitfalls? Doing your research is the only way to find out.

In the previous three issues of CAD Manager's Newsletter (click here for archives), I broadly covered the overall topic of outsourcing. If you haven't had a chance to read the first three installments, I recommend that you do so now because everything I'll touch on in this installment will reference material I've already presented.

I know that outsourcing is a touchy subject, but even I am surprised by the amount of mail that I've received on this topic, how global the responses are and how uniformly negative the tone of that mail is. To close out the topic of outsourcing and adequately respond to all the feedback will require both this and the next newsletter. There is simply too much to say about this very important issue to complete the discussion in this edition. Here goes.

Reader Feedback

I received several responses along the lines of this one, from a reader in Australia: "The first thing that needs to be realized is that companies offering these services in third-world countries operate using pirated software. The numbers simply do not add up."

While it is true that software piracy is running rampant in many portions of the world, I truly believe that the main cost differential for outsourcing is in the lower labor rates. It remains to be seen whether the large international software companies will aggressively go after the software pirates, but whether they do or not will neither stop nor encourage outsourcing.

It's simply a fact that annual salaries for engineering talent in China are approximately $3,000, and we see rates of $8,000-$10,000 per year in India. With labor rates in this range, a full package of AutoCAD, Inventor or SolidWorks could be amortized over a year and raise labor rates by no more than $1 per hour. And, like it or not, nobody in the United States, Canada or the European Union is willing to work for anything approaching these low labor rates, so the outsourcing continues. But, independent of that concern, we simply can't control the wage levels that people are willing to work for in other countries. No matter what labor rates might be in Canada, the United States or Western Europe, if somebody is willing to work for $3 per hour in another country, there's no law against it -- and really nothing that anyone can do to stop it.

I also received several responses that were along the lines of this one from a reader in Minnesota: "If I see anything else that could destroy my job and industry printed on this Web site, in this magazine, or online, you can remove me from your list of subscribers. Outsourcing will degrade our profession. Shame on you for presenting this topic to the masses."

Let me state, in my own defense, I don't believe that I've been advocating outsourcing. What I've been doing is trying to explain it and show you how to measure it so that you, as a CAD manager, can be educated about what your bosses may be thinking. If anyone thinks I'm trying to eliminate his or her job, please understand that's not my intention at all. I'm simply trying to help you readers understand the market forces that are in play and how they can affect you. Read more >>

:: CAD Manager's Q&A

Editor's note: Our regular CAD Manager's Q&A takes a break this week. In its place, we hope you find interest in this Q&A from the CAD Manager's Newsletter archives.

Is the CAD manager becoming an endangered species, or does the position have a bright future that I should continue to pursue?

Robert Green replies: This is a great question, and one that more and more people are asking me. I'd answer the question "no" and "yes," respectively. Read more >>

Submit your questions to Robert Green

:: Resource

CAD Management Info
Although Softco Engineering Systems has suspended active operations because of the impending retirement of its principal and developer, the company's Web site provides an array of articles and information for CAD managers. Among the topics addressed are "Issues Facing the CAD Industry," "Managing Performance in Your CAD Department" and "What it Takes for Management to Invest in CAD Standards and Automation.".

:: Events

Webinar: New Dimensions in Technical Documentation
October 4, 2006
Right Hemisphere and Tata Consultancy Services will lead this one-hour exploration of best practices in delivering interactive content. Read more 

Webinar: Extending the Value of ERP for Custom Product Manufacturers
October 12, 2006
The webinar will address the challenges that custom product manufacturers face and recommended solutions to help them deal with product complexity while responding to customer-specific orders more rapidly, accurately and efficiently. Read more 

2006 Structural Engineers Building Conference and Expo
November 29-30, 2006
Washington, DC
This conference will explore the changing roles of structural engineers. Conference attendees can choose from sessions including project management and business strategy, virtual building tools and market opportunity. Read more

SPAR 2007
March 26-27, 2007
Sugar Land (Houston), Texas
Subtitled "Capturing and Documenting Existing-Conditions Data for Design, Construction and Operations," this conference aims to illuminate the business case for using advanced dimensional control work processes enabled by new technologies (such as 3D laser scanning) to achieve safety, cost, schedule and quality values for capital projects. Read more

For Cadalyst's full calendar of events, click here.

:: What's New at

Time for a New Job?
If you're in the market for a new job -- or if you just want to see what's out there -- offers an online Job Search that will help. Powered by Indeed, this search tool offers a state-by-state list of CAD-related job openings, or you can customize a search to find your own list of U.S. job openings based on the keywords and locations you specify. Check it out today! Use the Job Search button under the Resources section on any Web site page or click here for a direct link.

Cadalyst Daily Update
For all the latest news and new products, subscribe to Cadalyst Daily e-newsletter. Plus, every issue includes a feature you won't find anywhere else --hardware and CAD software reviews, success stories, AutoCAD tips and much more! Here's a sample of what you missed recently: