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This chapter is from the book

Possible Novel Twists on Outsourcing

As indicated at the beginning of this chapter, the most likely scenario for the future of offshore outsourcing of knowledge-based products and services is simply "more of the same." But there are likely to be some novel twists that nobody expects—and the astute COBOL programmer and accounting clerk are likely to spot these anomalies on the Internet before the rest of the marketplace notices them.

The first example—"insourcing"—is not even all that novel, because the same thing has already occurred with the "traditional" industries. A politically sensitive offshore vendor realizes that it can deflect some of the hostility, as well as the possibility of protectionist legislation, by setting up some manufacturing facilities here in the United States and hiring some local workers. The number of jobs might be miniscule compared to the number of employees in the offshore vendor's home country, but it looks good and provides the local politicians with the opportunity for a sound-bite interview, preferably on the factory floor, to demonstrate how they engaged in tough negotiations with the offshore vendor to "save" American jobs.

India's IT industry has begun to emulate this approach. Recently, one of the country's largest and most successful software firms, Infosys Technologies, announced that it was making a $20 million investment to create 500 jobs in a Fremont, California subsidiary called Infosys Consulting32. It's a nice gesture, but in fact, only 75 people are expected to be hired during the first year. It will take three years for the company to reach its goal of 500 employees. Meanwhile, the company has a total of 23,000 employees, with total revenues expected to exceed $1 billion its next fiscal year.

This is not meant as a criticism of Infosys; some jobs are better than none, and it's likely that we'll see the same strategy from other vendors of knowledge-based products and services in the coming years. Japanese auto companies and German engineering firms have done the same thing in the past; why should we expect anything different from the knowledge-based vendors in the future?

Personal Outsourcing

Virtually all of the examples discussed throughout this book involve offshore outsourcing at the corporate level—for example, XYZ Corp decides to replace a thousand call-center employees with a thousand employees in Manila or Delhi. But given the efficiency and the ubiquitous presence of the Internet, why couldn't we carry out some of this outsourcing activity on a personal level?

For example, one of the tasks associated with writing a book like this is to create an index of all the important words and phrases. I can do it myself, but the job is time-consuming, tedious, and intellectually uninteresting. My time is precious, and I would really prefer to have someone else do it. I can let the publisher carry out the task, but they'll deduct a hefty fee from my royalty check, and I'll inevitably lose some control over the product. So why not outsource the job to a competent freelance editor or technical writer, who can carry out the task while I'm busy finishing off some of the other aspects of writing the book? I don't care where such a person is located, as long as we can communicate via the Internet; and if someone in Manila or Madras was able to propose a substantially lower price than someone in Minneapolis or my neighborhood in Manhattan, it wouldn't matter to me.

Perhaps this is a unique example, but I think the concept has broad applicability. We Americans already outsource all manner of jobs, because we're too busy, too bored, too lazy, or too unskilled to do it ourselves. We buy take-out food instead of cooking it ourselves (who ever thought of McDonald's as an example of outsourcing?); we take our laundry and dry-cleaning to the shop on the corner; and we outsource our auto repairs and the onerous task of mowing the lawn.

These are all old-fashioned, "blue-collar" tasks, of course, but we also have no hesitation about outsourcing such knowledge-based tasks as income-tax preparation to companies such as H&R Block, and we outsource the crucial task of educating our children to an institution called "school." On a personal level, many well-intentioned and highly competitive middle-class parents pursue an additional form of personal outsourcing for their children known as tutors. Nobody is suggesting that elementary school or high-school education is going to be conducted from India via the Internet33; but is it really all that crazy—or all that politically unacceptable—to consider an "offshore tutor" to teach the finer points of calculus to your struggling high-school son or daughter if that offshore tutor is demonstrably cheaper and better than the outrageously priced local tutor whose arrogant attitude and lack of punctuality have been driving you crazy?

Personal outsourcing might or might not become a significant component of the offshore outsourcing phenomenon discussed in this book. But if it does happen, it will be as a result of personal choices made between consenting adults, rather than unexpected and cold-blooded decisions made by anonymous executives in huge companies. And that could change public attitudes enormously toward offshore outsourcing.

Figure 5.4Figure 5.4: An example of personal outsourcing. Cartoon copyright © by David Cooney, <http://home.sunlink.net/~dcooney3/website1/illus.html>.

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