What is Outsourcing?

We are pleased to announce that we have published our offshoring "primer", Outsourcing 101, under a Creative Commons GNU License. It is intended to be a concise description of outsourcing in terms of its business implications, as well as a (hopefully) balanced summary of the "offshoring debate". The article may be reprinted or distributed freely.

Survey Reveals American Attitude to Outsourcing

A new survey indicates that more than half of workers feel that the government should penalise companies who outsource operations to low wage countries such as India and China. Some of those surveyed even said that they would consider lawsuits if directly affected by outsourcing.

From the Business Standard:

"A survey titled 'America At Work' , conducted by legal consultants Employment Law Alliance — an independent network of labour and employment attorneys — says the bitter feeling exists despite the fact that only 6 per cent of the American workers surveyed have lost jobs because their work has been sent overseas.

"While 58 per cent of the workers feel firms outsourcing work should be penalised, only ten per cent feel their job security is threatened because their employer is considering sourcing out their work.

"Around 20 per cent say they will consider legal action in a situation where their job security is threatened by the possibility of an employer sending their work overseas." Read More

Mercury Interactive Outsources to India

California based Mercury Interactive has joined several other American firms by opening offices in India, hoping to capitalize off of cheaper technology operations there.

From Forbes:

"A U.S. company selling software that programmers use to evaluate their work has opened an office in Bangalore, joining a growing number of American firms shifting their technology operations to India.

"India earned $12.5 billion in the fiscal year that ended in March by providing software development and back-office services, using its large pool of cheap labor.

"'India will be among the most important markets for Mercury, because outsourcing companies are realizing the need (for software testing),' Srinivasan said." Read More

IBM's outsourcing wins at Morgan Stanley, Shell and Qantas reflect growth

IDG.com.hk reports:

"IBM Corp's recent outsourcing wins at companies such as Morgan Stanley & Co Inc, Royal Dutch/Shell Group and Qantas Airways Ltd reflect the growth in the outsourcing market as businesses look for ways to run their IT operations more efficiently, using both onshore and offshore resources.

"The deals, which were made public this month, come as analysts revise their initial offshoring forecasts. For example, Forrester Research Inc. increased its original projections by as much as 40 percent."

Ireland Vies to Remain Outsourcing Destination

Ireland enjoyed an influx of foreign investment throughout the 90's as a result of low corporate tax rates and a flexible work force. With the recent rise of outsourcing to low wage countries such as India and China, Ireland is emphasizing the intelligence of its workforce in an attempt to retain and attract lucrative outsourcing contracts.

From the ECommerce Times:

"Ireland no longer touts low costs not only because they are lower elsewhere but also because a work force's productivity and skill level are becoming more important to companies like Dell, which employs about 4,000 people in Ireland and has operated a manufacturing plant in Limerick since 1990.

"But over the past three years, the attractively low wages found in China, India and Eastern Europe have eclipsed Ireland's financial advantages, spurring many global companies to switch allegiances and scale back or cancel their plans for Irish operations.

"Now Ireland is clawing back to reclaim its status as a major outsourcing destination by emphasizing its work force's brainpower and flexibility, instead of lower costs." Read More

Hildebrandt International Outsources Legal Support

Legal services outsourcing is an often-overlooked area of BPO. New York Lawyer reports:

"...Hildebrandt International wants to make sure that debate takes place among law firm managing partners as well: The well-known law firm consulting group announced today a joint venture to offer American law firms a means of outsourcing their support staffs to India.

"The joint venture between Hildebrandt and New York-based outsourcing group OfficeTiger will not mark the legal profession's first foray into offshore outsourcing, but the prominence of the Somerset, N.J.-based Hildebrandt, which has advised many of the nation's top law firms, will no doubt lend the issue further momentum among lawyers."

Is Outsourcing Good or Evil?

Yomiuri Shimbun of Yomiuri Online has posted a well-written commentary analyzing American outsourcing in an historical context:

"Outsourcing of arguably lower tech jobs, such as basic industrial manufacturing, has been a reality for at least three generations.

"What's different now is that outsourcing is moving up the food chain and threatening the professional middle class.

"Also, outsourcing has become highly visible, almost iconic. And often that icon features a programmer dressed in casual slacks with white shirt or a salwar-kameez presenting an Indian face." Read more