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Thoughts about the offshore outsourcing trend

By MaryWeilage Editor ·
News.com's special outsourcing series, "Outsourcing: The reality behind the politics," strips away the hype behind this controversial trend and examines the social, economic, and political dimensions of outsourcing. Here are links to the four articles in the series:

U.S. needs reforms, not rhetoric
http://builder.com.com/5100-6404_14-5210485.html

Where to draw the line
http://builder.com.com/5100-6404_14-5212239.html

Backlash targets India
http://builder.com.com/5100-6404_14-5212246.html

The next technology battlefields
http://builder.com.com/5100-6404_14-5212252.html

Offer your views about the offshore-labor trend and let us know whether you're directly impacted by this issue.

This conversation is currently closed to new comments.

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Information security

by RexWorld In reply to What about national secur ...

It's not just economic security we should be worried about. The one aspect that really concerns me is information security--if all our medical records are going overseas for transcription services then the data could be compromised. Some unscrupulous or disgruntled worked could release your medical records to the Internet, and since they're in a foreign country we would not have the same legal controls to try and stop the spread of the data.

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Information security

by deanesn In reply to Information security

I absolutely agree. I know it's cheaper to send out all that information overseas, but how do I know that I?m protected against theft. In my opinion I think there should be an international law that controls the transactions of sensitive information. The US government should do something about its citizens.

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Body of experience

by blarthomore In reply to What about national secur ...

I agree with ddasilva so far as greed is concerned. The
"management stars" of American coporation are allowing
analysts on Wall Street to make their decisions for them; namely
stock price, not value. One other thing to keep in mind with the
offshore situation is that loss of the "body of experience" that
comes from entry level people working their way up the ranks
and gaining skills without having to re-invent the wheel. The
offshore situation will end when the middle-management and
senior management jobs start going off-shore.

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Business - Security - Offshoring Jobs

by nancigiuffre In reply to What about national secur ...

I worked as an employment agency bookeeper for 30 years. I am gradually teaching myself more programming, etc. and run into cases where I am forced to speak with my ISP (happens to be Earthlink - and I know their Harrisburg, PA offices have closed and moved to India - newspaper article several months ago). My major complaint is the language barrier (and I am fluent in a few simple nations' )....but I could effectively accomplish my business faster without having to spell out specific words over and over to cross that barrier. But that's me.
I've grown old and intolerant, unfairly.

Don't any of these so called Executives (who of course, want their "bottom line" fattened) know that the more the enemy areas can access (not all countries are looking to beat at us) - But, I've seen in my "retirement" how some of the younger employees in banks and institutions such as hospitals, service industry, etc. would be totally LOST without their computers...
and yet - we remain bare-naked to the world - and expose ourselves to an entirely possible, and probable threat that an enemy force could TOTALLY CRIPPLE our business and industry totally IN ONE SWIPE of an excellent virus or contaminated / corrupting data transfer into our mainline systems.
Who in the world hasn't heard of AOL or MSN ? Not to mention thousands of servers dedicated to Government services ?!?!
I pray, that we wise up, tighten-up and stop this foolishness about Balance Sheets, and consider the larger picture of total Freeze-Up in our databases.
The IT community is surely aware that this is a viable threat, but the major business and government folks just "pooh-pooh" it as only a remote possibility ?
God Bless the World, right now.
Someone has to Wake Up.

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Offshore -- Productivity is less than anticipated

by crobbins3 In reply to Thoughts about the offsho ...

What originally began in year one as a pilot program of 5 of our business applications has grown to a program where we offshored in our second year the maintenance and support of 12 business applications, and there are more planned for year three.

As as application manager I have identified that when I compare my original support groups to the current offshore groups that the productivity has dropped by two-thirds, and the drop in the quality is signifanctly noticable by my end-users.

The most fustrating part of the offshore experience is that the offshore contractor is more concerned about process, and not throughput or the quality of work. The explanation from the contractor for the drop is quality and productivity is always explained as cultural.

The bottom line is though the offsore talent pool certainly knows processes there ability to create a quality product in a reasonable amount of time is inferior when compared to the U.S. talent. The "Trend", is to reduce the recurring cost of IT. The trend is not to improve the quality and quantity of work.

If the offshored IT organization were a manufacture of automobiles, then the autos that they make would be rated as poor in quality, and total cost of ownership would be 3 times the original cost. The stockholders would also experience that only one-third of the promised products would make it to the market place. The impact to the shareholders would be that no divends would be returned. Did someone say "Yugo".

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Amen to that

by blah029384 In reply to Offshore -- Productivity ...

My thoughts exactly

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It is our reality...

by bill In reply to Thoughts about the offsho ...

I recently underwent a 'career change' as the result of the company I served as the CIO of for 10 years, deciding to outsource all of IS/IT. The decsion was made to allow them to focus the company on their 'core-business' and not on the software that they use to manage that business.

As I had a front row seat, so to speak, during the process, I can tell you that if *I* had been in their shoes, I might have made the same decisions.

The sales pitch is strong, 'reduced costs', 100% up-time, 'managed server' environments, automatic updates to all Microsoft applications and server infrastructures, etc. all for a fixed monthly price/user.

No one talks about, nor does executive management really want to hear about the potential pitfalls. The potential cost savings, or at the least the cost 'fixing', coupled with the promise of 'no IS/IT headaches, is too strong a motivator to ignore.

However, as another poster mentioned, this outsourcing process actually has its own 'cycle'. Many organizations have found this approach actually takes more internal planning (especially by senior management) once they lose their experienced IS/IT folks, if it's to be successfull.

For those companies fortunate enough to be able to 'pilot' some components, evaluate the pros and cons, and then decide which portions can be successfully placed with an outsource firm, this can be a great balance of resource utilization.

For smaller companies, I fear the downside can have disasterous consequences. These small and medium sized businesses are the core of our economy, if they get burned in this process, we'll all suffer far more than some transient unemployment problems.

I've found however, that this trend has also created some decent opportunities if you're willing to stretch a little, try some new technologies and 'pay your dues' once again.

It's our (those of us in IS/IT) reality, we need to stop looking to the government to help.. they won't. We need to find ways to be the 'source' companies look to, to leverage our cultural advantage and to develop applications in such a way that we deliver them, to spec, on time and on budget.

That's my focus, and honestly, as a consultant once again, I'm having more fun than I've had in years!!

-Bill
www.billcoupe.com

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