By silicon.com, 20 January 2004 17:45
This publication today carried a story about IBM and its own moves to offshore certain operations, mainly for reasons of cost. It was notable because here we have - though IBM isn't in a hurry to confirm media reports - an outsourcer outsourcing, or at least using offshore facilities.
Indeed, the highest-profile trend of the year so far, following on from the last few months of 2003, has been major companies offshoring IT and call centre operations. In the UK, the financial sector in particular has seen a host of offshoring projects.
When we broke the story last December of Barclays sending some application development work to India, it was notable because it became apparent a statement was due to be released a couple of weeks earlier, only the flak caught by Aviva's Norwich Union insurance arm postponed any public announcement.
Understandably, most organisations considering such a move are sensitive to how it will play with the media, among Britons in general and, most importantly, affected workers.
But having a good PR machine in place shouldn't be top of corporate wishlists.
Undoubtedly the most important factor should be whether offshoring - or outsourcing even - is the right idea. We're talking about the fundamental business decision. There should be no dogmatic answer, either for or against it.
If, on its merits, offshoring does prove the best course of action - and it quite often isn't, as some users will find out to their cost - then it must be done properly. That means facing up to the xenophobes and ignorant and communicating what exactly is being done and why.
The more enlightened in business realise offshoring is a product of globalisation and normally means exporting the most tedious, most unrewarding jobs. It wasn't that long ago that call centres, for example, were held up as sweatshops, modern 'dark Satanic mills'. And now we want to keep those positions?
It might be asking a lot but any company should be honest about where and how they conduct business. The labour market has gone through countless changes in the last 50 years and adapted. When a large company such as IBM announces cut backs in one area, it very often expands elsewhere. This week it said it will hire 15,000 more staff as the economy rebounds.
Offshoring is an unstoppable tide and PR spin isn't the way to handle it. Presenting the whole picture and long-term benefits - where they truly exist - is the right way.
Comments
There are 7 comments. Join the discussion
1. anonymous
"...normally means exporting the most tedious, most unrewarding jobs..."
The first phase of offshoring removed job opportunities for poorer or less-educated people. I'm certain that they will be impressed by your compassion in removing their "tedious" jobs.
The jobs which are moving now are solidly middle-class. Examples include the work normally done by lawyers, accountants, medical technicians and software developers.
Those jobs are neither tedious, nor unrewarding. They are highly paid, creative jobs. The irony is that some of these displaced workers are being forced into "tedious, unrewarding" work in order to keep the wolf from the door. Ironic, isn't it?
2. Dave Ellis
I am contiually being bombarded with circulars/calls from companies telling me how much our business could save by "offshoring" our call centre. On the basis they don't know our business it is reckless and disruptive to have these statements made to various people in the organisation, including the CEO.
The vested interests of those making the statement too often over-ride impartial and knowledge based advise
3. anonymous
Think of the long term damage being done...
We are telling the next generation not to go into IT or engineering
because we value short-term profit above career development.
I understand the bean-counters that run our industries like
Technical skills "on tap, not on top" but who in their right minds is going to commit to a profession that requires enormous investment of time
and effort (and money) only to find that your job could be moved abroad at any time?
If you are bright and will get good exam results in Maths and the sciences what should you do?
In Germany, Switzerland, France, Japan and Sweden you will go into IT/Engineering. You will have a safe, lucrative and respected career.
In the UK you would do anything but! Medicine, Law, Opthalmology, Dentistry, Economics are all much better bets.
No wonder we don't have a car industry any more - if we don't crush this greed soon we will have real skills crisis in the near future.
4. Mark Cathcart
It is a shame that we can't have a reasonable discussion on this subject that doesn't get bogged down in xenophobia and cheap PR rent-a-qoutes.
Lets face it, programming isn't the mystic art practised by (mostly) men in white coats that it once was(1950's). While it is still the case that sophisticated modelling and programming of complex business relationships and entities requires both a good grounding in practical IT and classical IT education, even that isn't as hard as it once was. We are still years away from non-IT skilled people being able to construct business applications. We may get there...
Technology and business changes, that's life. In fact much of the western economies demand it. Many people and politicians though don't like to be challenged and prefer to remain in their comfort zone, resenting anything new and see any change as a threat!
5. Alexandra Castle
The point is it isn't about low level jobs anymore but about very skilled technical positions. A recent estimate was that a high level programmer in China or India would cost IBM about $13/hr as opposed to $56 here. That is hardly call center wages. And for that matter...watch what happens to US wages for such jobs when the recent Immigration position proposed by the President is put into place..How quickly IBM et al can reevaluate the wages after bringing into the country high tech professionals at wages US workers won't consider. It isn't just farmers that are effected here. It is also interesting to note, however that some off shoring has been returned because there are still significant language and cultural barriers...The code may be the same but the instructions and business logic aren't.
6. anonymous
With offshoring the fashion of the day has no one challenged the legallity of passing sensitive personal data to such centres. Offshore call centres must have this data to work effectively but the legal controls in these countries may be inadequate.
7. M.J.Brassington
I have heard alsorts of arguments about offshoring and I think a lot of them are sound business sense. A thought these arguments is that surely there comes a time when as an example in India, the work force wants the same pay as its 'American and European counter parts. Do we then in-source or is it now stalemate?