Growth in "off-shoring"
I heard a report on MPR this morning based on this article from CFO Magazine on the growth of off-shoring in corporate America. The author states that off-shoring is now so commonplace that it isn't nearly as politically sensitive as it was in previous election years. Her report supports the predictions made by Tapscott and Williams--unfortunately. She believes that only "the most interesting jobs" will be left in this country. While that's very good news for a few people, I want to know what everyone else is going to be doing...
Here's an except: “Companies and offshore service providers alike have expanded their views on which functions can be offshored, with everything from traditional call-center work to legal research on the table. They have also learned how to better manage the outsourcing process. At the same time, finance chiefs have gained a healthier respect for the hazards involved in sending work overseas (see "Staying Put" at the end of this article).
Far less fearful of a public backlash than before, companies today have a world of options when it comes to offshoring arrangements. "It's become a global bazaar," says Raffy Ohannesian of DLC, a finance and accounting-services firm. "Whatever you need, you will be able to find it at a lower cost, with a minimal or acceptable level of quality degradation, or sometimes even improvement. It's just a more mature market."
Offshoring, in short, has grown up.”
From: "Offshoring Spreads Its Wings: From East Asia to Eastern Europe, offshore outsourcing is taking off." Kate O'Sullivan, CFO Magazine March 1, 2008
—Sara
Comments
Just a quick note from my own experience. I work at a small company, and we use outsourcing for several tasks. We prefer to use local businesses, and do hire out some of our design and programming needs to companies from right here in the metro. We happily pay double (or well above) an offshore rate to someone we can train and rely on (and yes, hold accountable) in person.
On the other hand, some tasks are too costly or too tedious to find a practical solution locally or nationally. If not for the global marketplace and the ability to offshore, even a small company like mine has projects that would never get done. Case in point: we have used firms from India for large, very repetitive book digitizing and cataloging. This particular job will bore an intern, temp, or entry-level Minnesota worker to tears in short order, and it is all but impossible to maintain a rate of productivity and quality control that justifies the necessary wages over time. Other companies in the state who might contract for work like this face the same issues, which drives the price out of range. Our contractor in India has an entirely different workforce and economy to deal with. Having access to them and the ability to digitally conference and transfer data without concern for geography has allowed us to start and complete internal projects that would otherwise be years down our in-house priorities list. With those projects done, we have resources that can generate additional business, then revenue, then new researcher jobs right here.
So, there's one anecdotal perspective for the consideration of the class...
Posted by: Jim O. | March 6, 2008 07:21 PM
Off-shoring seems to be more and more common. It's a sticky subject for a lot of people. Some people see it as a threat (i.e. "We're losing our jobs here!"). Some management/decision-makers see it as a way to cut costs for the company. At my last employer, the duties that were not "the most interesting jobs" were off-shored. Those were the responsibilities that did not involve client contact but more data-entry based responsibilities. Off-shoring is a definitely a debatable topic.
Posted by: Hoang-Uyen N. | March 7, 2008 12:31 AM
Thanks for adding your comment, Jim. It's a very complex subject and I find your very local perspective especially interesting.
Posted by: Sara | March 13, 2008 08:01 PM