Outsourcing: Curse or boon?
By Angsuman Chakraborty, Gaea News NetworkSaturday, January 24, 2004
Lets take a look at outsourcing from a global perspective.
I have outsourced work and now provide outsourcing services.
Why? I have seen a need in the market for high quaility work done at competitive price, more so when the economy is down. It would be a strategic blunder for any corporation today not to consider outsourcing as a strategic initiative to prosper & even survive in today’s marketplace.
Having said that lets look at the other side of the coin.
I have recently seen a cry that - wait these people from Russia, India and China are taking our jobs, lets stop them!
Interestingly the same cry was and still is heard from small businesses in India, China, Brazil and other economically dis-advantaged (polite term for economically poorer) countries when corporations from USA were capturing and are still capturing the market in those countries. And they wanted the government to stop them, which didn’t happen as they would have liked due to external constraints like pressure from the US government, GATT etc. So today we have pepsi & coke & domino’s in every street corner, whereas many local brands have all but dis-appeared! And my little niece likes best a Pizza (”Pizaa”, as she says it with an eye of love) from Dominos.
Either they are both wrong or they both right! These are all artifacts of globalization.
Either you create a closed society where US doesn’t do any trade outside the country and US corporations has no business interests outside the country in which case you can also close your doors to outsourcing options. Or you vote for opening the barriers to business everywhere which means US business thrive outside the country also and non-US business do the same inside US too. And in the global free market the best & most affordable alternatives win.
This cannot be a one-sided coin. The corporations in an open economic climate will go for options that better their chance of success.
The best response to the challenge would be to optimize your process so you can effectively compete with the outsourcing options and/or leverage the outsourcing options yourself to position your business for success. Do a SWOT analysis and you will immediately realize several key strengths to small US businesses and individuals enjoyed due to geographical proximity and others due to past experience & skills.
Re-orient the business strategy to that effect and you will see that outsourcing is a boon not to just corporations but small businesses and individuals.
Very soon you will see that a state of equilibrium has been reached where the total cost of outsourcing will be approximately equal to insourcing. As Japanese car makers did not wipe out the US car makers, rather they became more efficient and stronger, expect as similar phenomena to happen here too.
What are your thoughts on this?
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May 30, 2009: 6:36 am
I disagree, I will not sit back and see it as inevitable. Greed of US corporations is causing our jobs to be shipped overseas. Keep the dominos we’ll take our jobs back. US could no longer bleed because we feel bad for Indians and Chinese. I pray legislation makes it increasingly difficult for companies to off shore. And it is possible you just wait and see |
 bpo agent |
February 26, 2009: 2:11 pm
Outsourcing is just the effect of globalization, company tend to outsource to go global. And believe me it has a good and bad effect but for me it is good because it lends many job opportunity. |
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November 18, 2008: 1:04 pm
@Somdev I disagree. Take our IIT schools for example. They churn out the best and brilliant of the country, who can compete with anyone from any university in the world. |
 Somdev Mukherjee |
November 18, 2008: 12:13 pm
As an East Indian American, I’ve mixed feelings about outsourcing. While for low skill jobs, it is a boon, whereas for high skill jobs, it may be a curse. Will you prefer to hire a software engineer from a top-notch U.S. University or someone from India or China, I myself did my B.Tech in India, take it from me U.S. Unversities, at least most of them, offer a lot more hands on education that encourages students to think independently and be able to very focused, analytical and driven. |
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July 13, 2007: 3:12 am
Bonjour, L’externalisation est devenu un facteur positif au sein de notre société. En effet, 80% des entreprises externalise dans les pays émergents leurs activités (paie, R & D…). Cette étude parle du boom de l’externalisation : https://www.ent-leblog.net/ent_le_blog/2005/09/fautil_external.html Elle me semble pertinente. |
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June 3, 2005: 7:55 pm
I agree. The issue should be how to properly leverage outsourcing as a tool and not how to stifle it with legislations. |
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June 3, 2005: 2:25 pm
Here is a great book. Even if you don’t buy the book read the first chapter posted on amazon.com “IT, Software and Services: Outsourcing and Offshoring” by Robin Sood. https://www.amazon.com/exec/obidos/ASIN/0976067439/aiaiyobooks-20 The author points out that Lou Dobbs etc should use their power to go after the real issues. |
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March 23, 2005: 4:45 pm
I read your blog on outsourcing. This blog is quite informative for my business, even I have blog on outsourcing so can we exchange the links to share our knowledge resources |
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August 29, 2004: 8:43 pm
Great article! China and India people also pay to buy America’s books, movies. Does those outsourcing-haters mean Chinese and Indians are fools because they are outsourcing books and movies? Or their point is that India pay American is morally right and American pay India is evil? redguardtoo |
 sj |
May 26, 2004: 2:41 am
so many issues are of influence on this deabte about outsourcing. as a student of managment and HRM my studies seem only to get me more confused. To an extent, outsourcing seems to be the latest solution to ignoring internal strategies of making a workforce more efficiecnt. like if senior management simply outsoruce a function that they dont understand, they it becomes a case of ‘out of sight out of mind’.. but what this means, as supported by your article, is that outsourcing, while out of the minds of an organisations managment, is suddenly a political and international issue for governments and organisations all over the world to consider?! |
ChuckDaddy