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What did outsourcing really do?

Monday, September 27th, 2010

In my experience, what I am hearing (and partly seeing) is that the perception of IT outsourcing (to offshore providers in Asia/South America) is closely reflected in the comic strip below.

Source: Dilbert

The folks who are being replaced by outsourcing efforts are obviously mad and enraged. The folks who end up having to manage the outsourced work and who end up “receiving and owning” are literally crying. Complaints range from poor quality of work received, to lack of resource retention at offshore locations. Communication and cultural issues doesn’t get talked as much, but they play equal role in the negativity. There is even a mushrooming in-sourcing industry.

Even though there is an element of truth in these outcries, I am somewhat skeptical if this is a simply an “expected” backlash. In some sense, these complaints raise a sense of job security or at least slows down the movement of jobs out. On the contrary, even a bit of praise for offshoring most likely results in more work shipped out.

Thanks to the recession and rising unemployment in the US, federal and state departments are taking a conservative approach by avoiding this topic or altogether opposing it, as State of Ohio recently did.

Growing up in America?

The reality is outsourcing of IT and in fact, all IT-enabled work is becoming a financial imperative. The US market for most industries is saturating so the only way to show growth in many cases, is by cutting operating costs. The easiest is to ship all desk jobs offshore. Ultimately, the folks who are cribbing must manage these issues (mostly imagined or some real!) and get over it.

The IT and BPO sourcing providers (Indian, Chinese and others) must own up to some of these issues on their part. At the moment, most of the top-tier providers are busy “moving up” the value chain, escaping from what NY senator Charles Schumer calls “chop shops”. But the entire sourcing industry must recognize and focus on its foundation – highest quality of service – to sustain the industry as whole.