Link This | Email this | Blog This | Comments (1)

Offshoring’s temporary setbacks
May 22, 2007

In response to my recent post on offshoring, Duane Benson commented, “I’d be interesting in hearing about outsourcing backlash.” Such information is hard to come by. Rumors pop up of test-industry outsourcing projects that haven’t lived up to expectations, but on-the-record confirmation doesn’t follow.

That’s not surprising. Notes ebs, a technology research and consulting practice, “Indeed, offshoring isn't always all it's made out to be. Offshore outsourcing failures are rarely reported because firms are reluctant to publicize them.”

Nevertheless, the firm has uncovered six companies—including Conseco, Healtheon, Life Time Fitness, Dell, Lehman Brothers, and Cogent Road—whose offshoring experiences have been less than stellar. You can read the brief case studies here.

The cases presented by ebs are several years old. I’ll be on the lookout for newer examples, but I suspect that companies are getting better at establishing offshoring programs. Commenter BobSound noted in response to my earlier post, “Almost every engineer I know is somehow involved in preparing his company for future outsourcing. So the reason we are not yet seeing huge job losses is that companies have been hiring to speed up their transition to offshoring. I think the real ball will drop in about 5 years or so.”

I tend to agree. I think the ebs cases represent minor setbacks, and workers in developed countries will have to continue to innovate to maintain their relevance in the face of offshore competition.

Posted by Rick Nelson on May 22, 2007 | Comments (1)