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.”
Price-WaterHouse (PW) has won a significant struggle with capital markets regulatory body, Securities and Exchange Board of India over Satyam Computer Ltd.’s falsification of funds, which led to a scandal in 2008. Read more
Although the deal is expensive, Britain’s Serco plans to acquire Indian outsourcer, Intelenet, for approximately $634 million. This will be an initiative to drive growth into overseas market that has high-growth. Read more
More and more people in the U.S. are now asking the question, “Is it possible for my job to be outsourced?” Read more
India’s domination of the outsourcing industry has contributed to the growth of key cities in the country; one of these is Hyderabad, located in the center of the state of Andhra Pradesh. Lately, the city has been referred to as ‘Cyderabad,’ since it hosts offices and facilities for the latest tech firms like Google and Dell. Read more
In the wake of the Japanese natural disaster that has ravaged the country, Steve Forbes addressed the impact of earthquake/tsunami on the recovery in the U.S. He was speaking at the Global Sourcing Summit that took place in Florida. Read more
According to PINC Research, shares of outsourcing giant Infosys Technologies are likely to climb. The consultancy firm has tagged the stock with a buy rating. The company’s research suggests that Infosys will hit Rs. 3500 in its report for December 16. Read more
President Barack Obama met with members of the U.S. India Business Council to tackle trade issues concerning India and the U.S. According to news reports, he has taken the bull by the horn in addressing concerns about outsourcing to India. Read more
IT offshore outsourcing, like other industry segments, also suffered the impact of the global financial crisis. Many IT service providers had to re negotiate their existing contracts and saw a freeze for contracting new services. However, unlike many sectors still feeling the pinch, the offshoring of outsourcing is on the rebound, as many organizations continue, and even deepen, their cost reduction initiatives as a means to maintain their competitiveness. Read more