In a move to obtain the lowest paid workers, Monroe County School District is planning to outsource maintenance and custodial work to external companies. The controversial plan will presumably save the school system $1.2 million. But that comes at a price; some of the lowest paid workers in the district will lose their job amid already high unemployment rates that cloud the country’s economic scene. Read more
From the early 90’s, when offshoring started, Indian ITO and BPO companies have been hiring thousands of fresh graduates to work in various ITO and BPO projects. Though the trend decreased during the peak of the global recession, it has picked up again in recent months. Read more
According to an online report by IDG News, India’s new laws concerning outsourcing of personal data from overseas firms will not account for the revised rules concerning collection of such data. This was reiterated by a data protection standards company executive representing the National Association of Software and Service Companies (NASSCOM). Read more
Just a few short months ago, a college buddy reached out for some advice on a business startup he was considering related to CAD Services (Computer-Aided Design and other Engineering Services). As the Director of a US-based Engineering Services firm, he saw the value in being able to provide low-cost CAD drafting services to western firms at a fraction of the cost. He knew I was experienced with web design, blogging, and online business in general and was interested in ideas on starting a website and promoting the business since he figured most of his clients would come through web traffic. We got to talking, and after a brief conversation, it was evident that with the skill sets we could each bring to the venture, partnering up would be the best route. Fast-forward 3 short months, and we’re already profitable and growing rapidly. Here’s how we did it Read more
Due to the continuation of sluggish US economy, US companies are finding ways to use low-cost regions within the US for their IT work. Though offshore outsourcing is pervasive to find cheap but good IT labor, there are regions within US which have good IT skilled people that are willing to work for less salary compared to people in bigger cities. US companies are tapping these skilled IT workforce and onshoring their IT work. Recently Harvard Business Review published a report that specifies several US companies are started building IT centers within US and hiring IT workers. Read more
Talking on the topic of outsourcing, Microsoft chairman Bill Gates said that US high-tech firms have little choice but to outsource jobs abroad due to immigration restrictions that are outdated. Read more
Media reports say that a North Carolina company has laid off workers before singing agreements with an IT service provider from India. Read more
As the growing debate over outsourcing continues and as political and popular discontent grows in the U.S., studies indicate that the term outsourcing is a misnomer for a myriad of sourcing strategies.
Tower Group Research conducted research in the past that revealed U.S. financial firms sold $200 billion to markets around the world. This has offset $1.3 billion that would normally go offshore. Apart from fears about shipping jobs overseas, sourcing strategies offer a wide variety of options for increasing benefits to the American economy. Global sourcing created operational efficiencies of $1.2 billion in a research conducted in 2003. Additionally, $0.4 billion has been sidelined for innovation. That figure has grown substantially by 2010.
Senior Analyst at the Financial Services Strategies & IT Investments, Virginia Garcia comments, “In the end, it pays to join the global village.” Of the $200 billion that went to international markets, a sizeable portion has gone to U.S. vendors. Outsourcing enterprises like IBM are examples of companies benefiting from a global outsourcing environment.
In a controversy that seems to suggest that outsourcing is a one-way street pertaining to job creation overseas, there is much evidence that shows that outsourcing is creating jobs for Americans too. In essence, global firms conduct business globally. For instance, India’s no. 2 outsource Infosys has on-site facilities in the U.S. Recent news report suggests that Infosys is hiring U.S. engineers, fresh out of college as a loophole around restrictions involving the H1B visa. Moreover, visa fees to the U.S. have also seen an increase this year. Under this economic climate, Infosys saves money by hiring U.S. employees.
In many ways, it makes little sense for multinational firms not to source globally and this has been ongoing for many decades. This also enhances their economic and logistical outlook. When ‘captives’ of financial firms open their IT and BPO shops abroad, this qualifies as “offshore insourcing” rather than “offshore outsourcing.”