[IP] more on Hopeful Report on Outsourcing
Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Sun, 21 Dec 2003 21:26:25 -0500
From: Suresh Ramasubramanian <suresh@xxxxxxxxxx>
Subject: Re: [IP] Hopeful Report on Outsourcing
To: dave@xxxxxxxxxx
I'd say that in any market, there's a classic pattern of expansion followed
by consolidation, where the market settles down, and the fly by night
operators / more inefficient setups get weeded out and a fewer number of
good quality providers remain solvent and functioning.
Outsourcing is no different.
The last two or three years in India have made outsourcing / call centers
etc what the dotcom boom was a bit before that.
The market is just starting to settle down.
More and more offshore contract firms are now concentrating on retaining
big ticket clients and acquiring more clients by increasing and maintaining
quality.
For example, the outfit my wife works for (http://www.cognizant.com) does
software QA and coding work on contract for outfits like eBay, 3M and
Metlife Insurance, and is one of four or five SEI-CMM5 rated outfits in
India. And there are at least 4 or 5 firms in India larger than they
are. I believe your colleagues at the SEI will tell you that India has
more CMM5 rated outfits than anywhere in the world ..
Further, other companies, in other sectors (such as automotive
manufacturing) are gaining a rep for quality. Companies from the TVS group
(which is an almost century old automotive and heavy engineering
manufacturer, who have manufactured OEM components for GM, Suzuki etc) have
won the Deming award for quality, over the heads of companies from around
the world.
Then there are the overseas branches of companies ranging from Citibank to
GE, that have been in India for several years before the current
outsourcing boom, without Lou Dobbs ever foaming at the mouth about
them. Citibank has been in India for over 80 years, for example.
So - while the outsourcing / offshoring issue is highly overrated, it is
here to stay. And it is a fact of life that even companies that Lou
describes as "American" are global companies, with global markets.
"No man is an island, independent of the main ..." etc, as John Donne once
wrote.
srs
Dave Farber writes on 12/21/2003 7:12 PM:
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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