[IP] Hopeful Report on Outsourcing
Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Sun, 21 Dec 2003 13:12:30 -0800
From: Dewayne Hendricks <dewayne@xxxxxxxxxxxxx>
[Note: This item comes from reader Bob Roy. DLH]
At 12:48 -0800 12/21/03, Bob Roy wrote:
To: Dewayne Hendricks <dewayne@xxxxxxxxxxxxx>
From: Bob Roy <bobroy@xxxxxxxxxxxx>
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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