Let's in-source our projects!!!

[Ernest Burden III]

There is a lot of debate over outsourcing work from the major markets of North America and Europe to the developing markets, mostly in Asia. Some of us are saying 'keep it in our own country'. I have tried to do just that when I need help with my projects. But there are issues of cost and timing with domestic talent, and those are the areas targeted by overseas companies trying to grab some of the work from the major markets. Can we in those primary markets compete at all levels of production or is the lower to mid level already all but lost to low-cost overseas providers? I don't know the answer so I'm writing this to get reaction and ideas from all of you.

 

As a small studio in the US I have found it increasingly difficult to compete for work against larger studio in the areas of capacity and speed. Capacity is the ability to do big projects, to scale up or down to fit the scope of the work, and that scope is only getting bigger as we go along. The smaller projects are increasingly being done in-house by our client base. But they need professional help to do big things, and we need to be able to handle those. Speed is similar in that clients are often more interested in how fast they can get the renderings and animation than what they will cost. Time is money, and they wait until the last minute to 'pull the trigger' so we have to work with that. Both require people, and those people can be just about anywhere. Can they be here, wherever 'here' is?

 

When I land a project and see that I will need help with things like modeling and scene set-up, I have to look at what is available from providers of those services and what it will cost and how long it will take. Looking at my own country I see a number of great freelancers who may or may not be available, and will be working pretty much by themselves to complete the work. Nothing wrong with it, but it reflects the same issues I have in being a small studio. Is it possible to have at least one provider of foundational arch-vis services within the US/Europe that can address the capacity and speed issues?

 

Is there anyone willing to form a company to provide modeling and scene set-up and such using domestic labor? I'm not expecting costs equal to those of China or India or wherever. But at least competitive? More important to me is capacity and speed. Is this possible in the US? If no one can make it work then its time to stop complaining about outsourcing and accept it as the way we must work.

 

A company such as I'm thinking about could easily be a collective of freelancers who work under a company banner. The business could be based in any part of the country to take advantage of lower costs in some regions. The important part would be that a studio could come to you and know you will be able to produce whats needed quickly and accurately and at a manageable cost and be accountable. Maybe such a thing already exists and I don't know about it.

 

Arch-vis is changing in ways that requires us to find new ways to work together to provide our products with quality, speed and carefully controlled costs. Can we do that by keeping all of production domestic?

[Hidden_Pixel]

Some very valid points Ernest. Do you still work on your own as a freelancer or am I right in thinking you now have your own company, or are part of a company?.

[neko]

great idea.

 

once upon a time, american companies could look to canada for 'outsourcing' since we had such a cheap dollar.

 

you can't afford us anymore.......

[ikinman]

I dealt with this issue a few years ago, back when I was still in city model land (hell) and trying to work with building detailed and accurate models of cities, which certainly requires outsourcing. You need large numbers of people for both the photogrammetry and the specific modeling. The outsourcing was necessary not just for cost reasons, which were an issue, but more importantly because of the 'gig' nature of the work. It didn't make sense to have a dedicated staff for tasks such as that which needed a lot of people for a month or two at a time, but never for an entire year.

 

The only outsourcing available was China, India, East Europe, etc. The usual suspects. But we ran into a problem with certain government contracts that required security. In certain cases we weren't going to be able to outsource to a foreign country, due to security reasons. And there isn't an available outfit to do modeling work in the US at that scale (there is for photogrammetry). So we thought about setting one up, most likely in Alabama or Mississippi or Louisiana, essentially a low-wage state, but near a University that taught architecture. In the end we never got that far, but it is an idea that we explored.

 

But outside of high security government contracts, the question would be 'Why?' What is wrong with outsourcing to another country as opposed to outsourcing to our own? Are people in our own country better or more deserving of work? There are some issues such as language barriers or cultural barriers (having someone make brick bitmaps in a country that doesn't use 8" brick is going to result in some bad renderings) which make it more useful to work closer to home. But I run a business, just like my clients do, and if someone is faster/cheaper/better why shouldn't I hire them, or why shouldn't my clients?

 

If someone can't compete with faster/cheaper/better, than they need to look at how they are working, not how others are working. They need to offer something that is more than what others offer. I've always been tickled by those entrepreneurs who profess a love for laissez-faire capitalism, but who somehow always forget that the governing force of capitalism is competition, and end up bitching about that. As well, arguing about jobs 'here' versus jobs 'there' risks confusing patriotism with nationalism, always a very dangerous exercise.

 

Of course, all that doesn't mean that one couldn't set up a lower wage outfit here in the US, and be successful. But it will still be playing by rules that were defined several years ago, and be something more backwards looking than forwards. Successful business ideas look at where the market will be in 5 years, not what it's been doing for the past 5 years. What will our clients want out of a visualization company in 2013? Real Time? A quick-start BIM modeling factory to ramp up a project quickly? Maybe city models will finally come of age (though I doubt that).

 

Or maybe just simply the best damn quality possible for an image or an animation. After all, professional photographers have been dealing with changes in the technology for almost 200 years, and they have survived, even thrived, as a profession. We all hire photographers not because of the equipment they use, or whether they're digital or analogue, but whether or not they are gifted. Renderers are no different.

 

-Ian

[Billabong]

Well I'm in. I got the modeling part!

[Ernest Burden III]

But outside of high security government contracts, the question would be 'Why?' What is wrong with outsourcing to another country as opposed to outsourcing to our own?

 

I was putting that question aside for the moment to just look at whether or not we can, practically speaking, even have in-sourcing as a viable option going forward. If we can then 'why' is the next logical issue.

 

I really appreciate your detailed response. Its one thing to ask and discuss, but your description of how you faced the issue and how you handled it is very helpful.

 

Successful business ideas look at where the market will be in 5 years, not what it's been doing for the past 5 years.

 

That's what I'm trying to do. The outsourcing debate is going to have to be resolved since its pitting us against one another. It is my belief that the future holds more and more interaction and collaboration among those in this industry at all levels and across traditional boundaries. If it isn't practical to do all aspects of arch-vis projects in one country or one studio for various reasons, we need to stop fighting outsourcing and figure out how to make it work for everyone.

[Sawyer]

So we would be doing this just as a philanthropic investment? I have thought of this idea as well and I have not been able to imagine that the numbers that any US based company could pull would be close to what I have been quoted from India. So business wise it might be nice but wouldn't give us the same edge as a overseas based collaboration would.

I worked on one job where the carpentry was actually being outsourced. It was insanely detailed stuff that would take a good sized carpentry studio here a while to do. The work was going to China and was being quoted to me as $6 a day per carpenter. I don't know if thats a real number or a conversational exaggeration but this was skilled work not grunt work.

I am still wrapping my head around this outsourcing stuff. Business wise it makes a lot of sense but I have gotten so tired of having clients call up get a price from me and say "My guy in India says it would cost $200." Its a level I can't compete with and I am a bit reluctant to want to take the plunge but in part just because I am pissed about being under cut.

Now if I were to send my work to Alabama I may feel a bit better but I can't imagine that I would be able to have the same sort of benefit that going overseas would give me. But I wouldn't be so pissed about it.

Now as far as the problem of scope a virtual office would be great where we can all bid on working as part of a team put our time in and work collaboratively across the country. That sounds great and I would sure be into that but I do not have the business experience to set it up or to do more than very simple trouble shooting.

[Ernest Burden III]

So we would be doing this just as a philanthropic investment? I have thought of this idea as well and I have not been able to imagine that the numbers that any US based company could pull would be close to what I have been quoted from India.

 

Not philanthropy, a profitable business. I'm not going to set it up, and the point of this thread is to see if its feasible.

 

My studio cannot come close to price quotes from some places and I'm not suggesting an arch-vis support service in the US would either.

 

We are always free to use domestic freelancers. But by its nature that is usually a one-guy team, and that one guy may be busy or get the flu halfway through your project. Capacity and speed requires an available team of many, even if they don't all work in one office together. We can hire a number of people but then have to manage them. Better to have one company doing that for us.

 

Viability always comes down to the money. If a support 'storefront' marked up an hourly rate by $5, then they can make $50/hr having ten freelancers working under them. It scales up from there. But what is a rate that the North American/Europe arch-vis market can pay for this sort of service? I have seen rates for US modelers between about $25/hr and $50/hr. That may have gone up. What would be an hourly number that those of us who could use this service would think was fair for modeling and scene set-up? For example--for most projects, I would probably have trouble going over that $50/hr. and under would be better--let's say $40/hr. for good, accurate work delivered in either Max, C4D, SketchUp or Rhino formats.

 

I know I can get those thing for less elsewhere. How much less I don't know because I've never looked into it seriously.

 

We have to see if it is reasonable to do these parts of arch-vis in our own countries. If it is not, the debate over outsourcing is over. Then its time to stop the dividing of our industry into 'honest and upstanding' vs 'cheap and dirty' and see off-shore suppliers as potential partners instead of enemies.

[Sawyer]

See this is great. $40 wouldn't make sense for me to hire someone. In fact I would be willing to do scene set up at that rate. Its lower than my rates but things are slow and volume work is good.

[Billabong]

This is interesting indeed, If $40 an hr is to high, then I guess outsourcing for you guys is justifiable, I don't make make under 45 an hr now, doing technical modeling, but I just enjoy doing archi, although that really doesn't matter anymore I guess.

 

But if some guys are willing to get together as Ernest has said, then I am willing to deff. give it a shot

[Ernest Burden III]

I'm not trying to set a number, just see what the market will support for a domestic supplier. The rate for one person is one thing, but I'm looking at times when studios would need a dozen so that two weeks of linear work can be delivered in a few days without the need for constant monitoring. That adds value above the actual hourly rate. Is there a market for this?

[TheAllusionisst]

Pretty cool topic the outsourcing discussion going on right now is very interesting as well. I guess if one started this you would have to have either operation capital to start or a group of artist realizing that they are trying to create something and willing to wait for payment until work was finished and client paid, or would it be more Laissez-faire and each artist works directly with the Client and the studio was just a banner to rally under and an identity for possible clients to identify with and contact for recruitment? How do you see it working?

 

Is it possible to have at least one provider of foundational arch-vis services within the US/Europe that can address the capacity and speed issues?

 

Good idea Ernest and you seem to have a very good and realistic perspective on the issue. What I don't quite get though is how using people in Europe isn't outsourcing? Categorizing who and who isn't outsourcing if not by country alone is treading on a dangerous slope in my opinion.

 

Hey you know I have a domain for you! LOL

 

Some very valid points Ernest. Do you still work on your own as a freelancer or am I right in thinking you now have your own company, or are part of a company?.

 

You don't know whoe Ernest is? http://www.acmedigital.com/ comes from architectural deliniation 'Blue Blood'

 

I've always been tickled by those entrepreneurs who profess a love for laissez-faire capitalism, but who somehow always forget that the governing force of capitalism is competition, and end up bitching about that. As well, arguing about jobs 'here' versus jobs 'there' risks confusing patriotism with nationalism, always a very dangerous exercise.

-Ian

 

I imagine they are complaining about a government that is bloated beyond all recognition, continually getting bigger feeding on the blood and sweat of middle class America, putting it's nose into everything possible so that it can continually grow and justify its existence. No need for them to get involved, especially if they don't treat every one equal, we are screwed by unfair trade with other countries, China being one of the biggest culprits. If you are going to butt in, then treat all parties equally, and definitely don't screw your own country over.

 

I have nothing against China, my point being our government forces our hand and allows other countries unfair advantage when trading with us, of course the Walmarts of the world are going to take advantage of this and the guy on the street is going to shop at Walmart because he can save a buck and he needs to because of the taxes he is paying for things like putting Ethopian students through college here in the US or his factory job just got outsourced to another country.... I am all for "free trade", that means "free of government" as well. Of course they will be involved to some extent, rediculous to think otherwise, but in a small governing role would be my preference, not a micro-managing bully.

 

I know there are lots of views on all of this but I truly believe our government is a gluttonist monster screwing middle class America big time. It needs to be about 20 percent of the size it is now, then our tax dollars could be spent on law enforcement and infrastructure and not on some government employees twiddling their thumbs. IMHO

 

I definitely don't believe in isolationalism, but I do believe the corporate sector runs things much more efficiently than our government ever could. Capitalism is successful under fair competition, or unfair in favor of the capitalist, I would settle for just plain fair

 

Ernest,

Based on your recount of experience and a smattering of common sense I hope, for this organization to be successful and offer competitive rates, it would be composed of mostly low to mid skill level individuals to perform modeling and preliminary scene set up and then the artist or firm contracting them would work their magic to make it match their studio style and take advantage of their own in house expertise?

 

P.S. I love these types of topics, I can spew some opinionated rant and then someone else comes back with an opinion different from mine but with merit and I can say hey, I can see that and then it modifies my views to some extent.

Edited June 4, 2008 by Russell L. Thomas

[kippu]

i guess i am not invited to this party huh ! ...

[AJLynn]

...

I definitely don't believe in isolationalism, but I do believe the corporate sector runs things much more efficiently than our government ever could. Capitalism is successful under fair competition, or unfair in favor of the capitalist, I would settle for just plain fair

 

Didn't you just run around in a big circle? People get screwed because stuff from overseas is too cheap. Which hasn't always been the case, or not nearly to this extent - the cheapness of these international transactions has increased as government interference in trade has decreased.

 

This has allowed the corporate sector, including manufacturing, services, etc., to outsource everything possible to countries with lower labor costs.

 

...which has screwed the people who used to do those jobs here. So we lament that government regulates too much, while at the same time lamenting that government regulates too little. Talk about how it's great that the corporate sector does things so much more cheaply while criticizing the mechanisms that make everything so cheap.

 

The whole thing isn't sustainable. Not being a macroeconomist, I'll leave it to others to figure out how to fix it.

[TheAllusionisst]

I am not an economist and do not have the answers. In my un-enlightened state I would say that the governements job in the most general of definitions would be to make competition fair, not on price, but if another country taxes and tariffs heavily stuff from our country then we do the same to theirs. If with equal trade structures they can produce the product of equal quality cheaper then I think they deserve the 'Sale' so to speak, I have no problem with that. In fact that is the "Fair" I was asking for.

 

It really doesn't matter what is fair and right if a government is involved geo-politics are going to be involved, trade is just another tool of leverage for countries and just the way it is. We can still express what we would like to see and realize that reality isn't going to let that happen

[ctk111]

The idea of developing a company with many free-lancers working collectively to compete for larger jobs seems like a great idea. I think it has the potential to create competition as an alternative to lower-priced overseas companies.

 

How formal would it really have to be? Could we develop some loose network among the people on the boards? I'm curious to know how many people take advantage of the community we have here when it comes to working on larger projects?

[Hidden_Pixel]

Hey TheAllusionist, I know who Ernest is, I am just trying to find out his current set up, as I know recently he was looking to hire people. Basically I am wondering if he has changed from freelancer to the owner of a business which could completely change his opinion of outsourcing and the so called idea of "in-sourcing".

When you work for a company as I do you don't like the sound of outsourcing or so called "in-sourcing", as it can have negative repercussions to our jobs. With the idea of insourcing this would mean that there would be less call for low end guys within the workplace. I really think it has been heading that way for a long time. Companies will have a core of high end guys in-house to do the finishing, allowing quality control to be maintained. The lower end work will be farmed out either domestically or abroad. Ernest brings up a very good point as to whether a U.S company could compete for this lower end work. I think they could, of course they would be more expensive but if they could build up a reliable reputation it could work.

[illegalalieninbeijing]

Just a thought. I wonder what would be everybody's reaction if this type of business gets regulated?

 

What if our respective countries, architecture firms or the AIA ( or whatever organization you have ) came up with a consensus to give their work to only accredited 3D visualization companies whether they local or in overseas? Let's say they set up guidelines to only hire people with degrees in architecture, certified copies of software, firm size, etc. Even fees are regulated. This would eliminate all the unfair practices and resorting to unethical conducts in business. This business is becoming cut throat and dirty by the minute. The fees are getting ridiculous and the expectations much much higher. It is not as good as before.

[TheAllusionisst]

Hidden_Pixel

I understand your concern, it is similar to the concern of the freelancer when they hear that the trend is for archvis to become in house, all relative to your particular situation. As Ernest stated, he has been guilty of working on remedial stuff at times. I had to come to grips with a similar notion, one can outsource things like modeling and capitalize on cheap labor force or one can allow artist to work on the project from start to finish, having 'Ownership' of work, not in legal terms but in a personal relationship with the project. This leads to pride in ones work. IMHO I would rather allow the artist to work from start to finish if possible and have some responsibilty for it. I realize that I may have to change down the road to be competitive, but we would rather all be 'RockStars' in the studio and do it all rather than a structured system. So this service probably wouldn't interest me, but then again we are relatively new (3DA Studio) and work keeps coming it, I may have to re-think this down the road, but for now I am going to hang on to my ultruistic ideals

[TheAllusionisst]

Just a thought. I wonder what would be everybody's reaction if this type of business gets regulated?

 

What if our respective countries, architecture firms or the AIA ( or whatever organization you have ) came up with a consensus to give their work to only accredited 3D visualization companies whether they local or in overseas? Let's say they set up guidelines to only hire people with degrees in architecture, certified copies of software, firm size, etc. Even fees are regulated. This would eliminate all the unfair practices and resorting to unethical conducts in business. This business is becoming cut throat and dirty by the minute. The fees are getting ridiculous and the expectations much much higher. It is not as good as before.

 

On a similar note, we were going to start contracting out a long time online friend of mine from Italy. It ended up that they are so highly regulated (he is an architect that has something to do with it I guess, even though he isn't working in the field of architecture currently) that he couldn't work with us because any work agreement he enters into has to be by hourly wages, he must maintain complete ownership of work and Italy had to be the legal jurisdiction of the project in the case of any legal disputes. This my understanding when working with him and going over contracts, I am not an expert on the subject and there could be some translational mis-understandings on my part. But needless to say he can't work with us because I couldn't abide by all his enforced stipulations.

 

So I would say if things got to regulated it would end up like the scenario I just outlined unless it was one international identity that did the regulation, otherwise national organizations would try to maintain control and leverage, I would think.

 

The having a seal or something that showed on your site indicating that you had been reviewed and are using legal software could be interesting but if that was done it should be by the software industry, I don't want my taxes increased so that the government could get involved! LOL

 

I apologize for hijacking this thread.

 

I think Ernest 'InSource' company could be set up as an LLC s-corporation and all the artist sign a contract that states they are independant contractors working on a 'per job' basis to alleviate employee taxes if they worked on their own projects from time to time. As stated earlier the business structure has to make a decision, does management handle correspondence and delegation or is the client assigned an artist and all collaboration handled by the two of them from then on? The first scenario requires a lot of management resources while the second doesn't allow control or standardized services and procedures.

 

The second scenario should have lower overhead and be more likely to compete price wise as I see it. Has anyone else thought about the actual business structure?

Edited June 4, 2008 by Russell L. Thomas

[Ernest Burden III]

I know who Ernest is, I am just trying to find out his current set up, as I know recently he was looking to hire people. Basically I am wondering if he has changed from freelancer to the owner of a business..

 

My interest in hiring talent for a NYC studio was part of a planned merger with another studio. That idea was recently terminated. Which puts me back to looking for answers on production and the balance between how much capacity to have in-house and how much to sub out. These are things many of us are looking at, so its nice to be able to talk about them here.

 

What I don't quite get though is how using people in Europe isn't outsourcing?

 

I was thinking of North America as one overall 'national' market and Europe as another, though you could look country-by-country instead.

 

for this organization to be successful and offer competitive rates, it would be composed of mostly low to mid skill level individuals to perform modeling and preliminary scene set up and then the artist or firm contracting them would work their magic to make it match their studio style and take advantage of their own in house expertise?

 

That was what I was thinking about--a single company that represents the collective talent of a team of people, whether they were in-house employees or a freelance's collective.

 

i guess i am not invited to this party huh ! ...

 

Within the focus of the thread, no, but if this idea is a good one you could use it within your own market. Maybe some of the firms we are talking about pitching from China, India and South America use this model already.

 

The idea of developing a company with many free-lancers working collectively to compete for larger jobs seems like a great idea...

How formal would it really have to be? Could we develop some loose network among the people on the boards?

 

Sure. But it may not work. The cost of living in the US and similar countries may make that sort of business impossible to run at a profit.

[illegalalieninbeijing]

On a similar note, we were going to start contracting out a long time online friend of mine from Italy. It ended up that they are so highly regulated (he is an architect that has something to do with it I guess, even though he isn't working in the field of architecture currently) that he couldn't work with us because any work agreement he enters into has to be by hourly wages, he must maintain complete ownership of work and Italy had to be the legal jurisdiction of the project in the case of any legal disputes.

 

This was probably done to protect them from being duped. I heard a lot of stories of freelancers getting cheated by some random guy they met in the internet or so who promised them a long lasting contract of work. But if we do have guidelines to follow in hiring people to do work for us overseas, would that greatly benefit both parties?

 

The having a seal or something that showed on your site indicating that you had been reviewed and are using legal software could be interesting but if that was done it should be by the software industry, I don't want my taxes increased so that the government could get involved! LOL

 

As soon as I declare any extra work I have done besides my day time job, the government is already benefiting from it. I even have to register myself as a business or small home office just to make everything legal. I did get a little bit of tax relief from the cost of my equipment / software after the year I started out.

[AJLynn]

The having a seal or something that showed on your site indicating that you had been reviewed and are using legal software could be interesting but if that was done it should be by the software industry, I don't want my taxes increased so that the government could get involved! LOL

 

Oh hell no. No no no no no. The software companies are even worse than the government at stuff like this. (Except for the TSA. Nobody is worse than that.) Remember what people went through when Microsoft decided to add a DRM scheme to all HD content playback? Or all that WGA crap? Not the screenwriters, the Windows thing. Do you really think the BSA would put their certification on people and companies if they had anything less than realtime monitoring of the entire contents of a computer and everything running on it? And anybody wanting to maintain their privacy automatically being assumed to be a software pirate... and then somebody gets into their database... No, I wouldn't touch that with a 10 foot pole.

 

Did you know that MacOSX Leopard has no protection at all - no serial number, nothing, you can just copy the DVD and pass it out to all your friends - and in the first few days it was out it sold more copies than Vista, with all its protections, did in its first few months? All 37 Vista versions combined.

[TheAllusionisst]

I realize there are reasons for the regulations, but in this scenario the artist really lost out.

 

As far as government getting involved, I mean they would jump at the opportunity to create a whole new department and we would have to pay the salary of hundreds, if not thousands of government employees for legitimate software review. I don't need big brother any bigger, a volunteer based software industry system would be more to my liking if anything like that was to happen. That was my thought process.

[AJLynn]

The software industry would need to create a department as well, and we'd pay for it of course as software customers. Only it would cost less, as it would be outsourced.

 

Where did this myth of government being vastly less efficient than corporations come from, anyway? On average it's actually not true, with exceptions when the corporations are breaking the law or outsourcing.

 

Edit:

 

I'm not saying there should be a federal department of certifying non-software-pirates. I actually don't think it's a good idea to have anybody doing that.