Hopeful Report on Outsourcing

[Dave Farber <dave () farber net>]

Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Sun, 21 Dec 2003 13:12:30 -0800
From: Dewayne Hendricks <dewayne () warpspeed com>

[Note:  This item comes from reader Bob Roy.  DLH]

At 12:48 -0800 12/21/03, Bob Roy wrote:
> To: Dewayne Hendricks <dewayne () warpspeed com>
> From: Bob Roy <bobroy () rjrassoc com>
> Subject: Hopeful Report on Outsourcing
>
> Dewayne,
>
> Here are highlights from a program on outsourcing from National Public 
> Radio's "Morning Edition" last Thursday.
>
> A growing number of U.S. firms are contracting out white-collar work 
> overseas based on promises of huge cost savings. A recent example is IBM's 
> consideration to move 4,000 programming jobs from five U.S. states to 
> India and Malaysia. But several recent studies show a different picture 
> such as (1) The fact that overseas labor rates have dramatically increased 
> recently, sometimes doubling in a mere six months as seen in India, (2) 
> Some U.S. firms that have succeeded in this pursuit have spent years doing 
> the preparatory work at great cost, and even then it sometimes doesn't pay 
> off, as in the case of Dell Computer's recent announcement that they are 
> pulling back a large technical support contract from India because of 
> excessive customer complaints, (3) High overseas employee turnover and 
> poor readiness; in many cases the overseas suppliers turn out to be 
> fly-by-night operations with weak resources, and (4) Concerns about 
> industrial espionage. One survey revealed that 78% of U.S. companies had 
> pulled the plug early on an overseas contract due to dissatisfaction with 
> a contractor. Certainly U.S. and overseas firms will continue to smooth 
> out these wrinkles, but perhaps this grim dose of reality will diminish 
> the "great sucking sound" of contract work going overseas.
>
> The NPR audio segment: <http://www.npr.org/features/feature.php?wfId=1552637>
>
> Bob

Archives at: <http://Wireless.Com/Dewayne-Net>
Weblog at: <http://weblog.warpspeed.com>


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