13 Outsourcing Articles
13 Outsourcing Articles
Date: Saturday, September 20, 2003 11:18 AM
JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
Article 1:
http://www.thenewamerican.com/tna/2003/09-22-2003/vo19no19_exporting.htm
Exporting U.S. Jobs
Article 2:
http://kansascity.bizjournals.com/kansascity/stories/2003/09/15/daily3.html
Sprint picks IBM, EDS for offshore IT work
Article 3:
http://www.financialexpress.com/fe_full_story.php?content_id=42073
Rockwell To Move High-end Integration Jobs To Bangalore
Article 4:
http://money.cnn.com/2003/09/17/news/economy/outsourceworld/index.htm
It's an OutsourceWorld
Article 5:
http://newstodaynet.com/17sep/bu1.htm
Spryance to invest $5 million for Medical Transcription
Article 6:
http://www.zdnetindia.com/news/national/stories/89597.html
Intel Capital to invest in Indian BPO firms
Article 7:
http://www.pcw.co.uk/News/1143660
Unions still suspicious of outsourcing - UK should not be allowed to
end up as a nation of 'fat cats and hairdressers'
Article 8:
http://www.chinapost.com.tw/business/detail.asp?ID=41339&GRP=E
Offshore job outsourcing leaves white collar Americans in lurch
Article 9:
http://news.bbc.co.uk/2/hi/business/3117520.stm
India firm rolls out next Rover
Article 10:
http://www.computerworld.com.au/index.php?id=1065817862
Analysts query Telstra's moves, jobs plan
Article 11:
http://www.theregister.co.uk/content/4/32730.html
Outsourcing: does it reward theft?
Article 12:
http://forbes.com/forbes/2003/0929/058.html
Giant Sucking Sound
Article 13:
http://www.wired.com/news/business/0,1367,60495,00.html
Bidding Your Job Bon Voyage
http://www.thenewamerican.com/tna/2003/09-22-2003/vo19no19_exporting.htm
Exporting U.S. Jobs
by William Norman Grigg
An engineered exodus of manufacturing and hi-tech jobs threatens to
abolish the American middle class the bulwark of a free society.
We were middle class," lamented former textile worker Jimmy
Bennett in an interview with the Washington Post, before hastily
correcting himself: "We still are." Jimmy and his wife Verleen,
residents of Kannapolis, North Carolina, were among the nearly 6,500
employees of the Pillowtex towel factory laid off in early August.
Just two years ago, reported the August 9th Washington Post, the
Bennetts had bought a modest $100,000 home, "confident their combined
wages would continue to support the comfortable lifestyle that had long
eluded their parents." Like many of their former colleagues, the
Bennetts, who both work part-time at near minimum wage, quickly sold
many of their household amenities to get by on roughly half their
previous take-home pay.
Thousands of other former Pillowtex workers "are fending off eviction
notices, car repossessions and home foreclosures, and making difficult
choices about which prescription drugs to skip and which utilities to
turn off," reported the Post. "People are turning off cellphones,
cutting cable TV, and pleading with creditors," added the August 5th
Christian Science Monitor. "Already, 200 have had their water shut
off."
The Monitor describes the Pillowtex closing as an event akin to a
natural disaster. But it wasnt a destructive caprice of nature that
shut down the plant. Rather, as the paper observes, the firm was
overwhelmed by "a flood of imports from China." Resulting in the
largest one-day layoff in the history of North Carolina, the Pillowtex
bankruptcy dramatically exemplifies the devastation being wrought
throughout Americas manufacturing economy as our trade deficit with
Communist China grows.
As the Monitor reports, "Manufacturing businesses, from electronics to
furniture and fishing lures, are closing their doors or moving
production to China.... Three members of the presidents cabinet on a
cross-country jaunt to promote the Bush economic plan have gotten an
earful from angry businesspeople trying to compete with Chinese imports
made by workers getting 50 cents an hour."
Charles Bremer of the American Textile Manufacturers Institute points
out that as textiles from Communist China and Vietnam flood the
American market, "People are moving jobs faster than you can count." In
2008, all import quotas on Chinese textiles will be removed. "At that
point," predicts Bremer, "the Chinese will completely dominate the
market."
Ironically, at least some of the future textile imports from China will
probably be produced on looms from Pillowtexs Kannapolis facility
but those looms will be in China, operated by Chinese workers. The
August 7th Charlotte Observer reported that "looms and other machinery
[from Pillowtex] likely will be removed from plants, packed and shipped
to manufacturers in China, Pakistan, and India...."
Manufacturing in Decline
As the erosion of Americas manufacturing base accelerates,
communities across the nation are experiencing economic ruin similar to
that of Kannapolis.
This summer, 10 plants operated by the Hooker Furniture Corporation
were shut down. These factories were shuttered even though the
companys profits had grown in recent years "largely by outsourcing
to cheaper manufacturers abroad," reported ABC News on August 14th.
"Every time weve asked them to step up, theyve done it,"
commented Hooker CEO Paul Toms of the employees who lost their jobs. "I
feel like weve let these folks down, and I dont know what Id
do different.... Its unlike anything Ive seen in my 21 years in
the industry. A lot of plants have closed, people have been sent home,
and it really has come quicker than anybody expected. I think its
hard to say, three, four, five years from now, what will this industry
look like domestically."
As with the American textile industry, our furniture industry is being
decimated in uneven competition with low-wage nations like Communist
China. The Chinese "have millions of people that theyre trying to
have employed so its hard to fault them," Toms opines. "But I think
that at some point, this country has to think about whats best for
us.... You have industries and examples of predatory pricing. Thats
the risk we run not just in furniture, but in any industry that were
letting leave this country."
Andrew Brod is an economic analyst in Kernersville, North Carolina,
where Hooker closed a plant formerly employing hundreds. He told ABC
News that many American companies, rather than making capital
investments in the U.S., have decided to "funnel investments abroad,
many to China itself...." "Some have contracted with Chinese producers,
but others have entered into joint ventures to establish new factories
[and] to refurbish existing factories," Brod notes.
The closing of the Kernersville Hooker plant is already having a local
economic impact. "If I dont work, I cant go out and spend money
to shop or buy what I need, so thats going to put somebody else in
jeopardy," observed former Hooker employee Mildred Stiles. Rather than
being "that trickle-down thing," she continued, "I think its going
to be more of a pour-down.... I think its going to hurt everybody
concerned." In some economic circles, the phenomenon she describes is
called the "race to the bottom" the sudden, rapid decline of an entire
population from the middle class to near-subsistence living.
Our nations manufacturing sector has been the gateway to the middle
class for untold millions of Americans, resulting in unprecedented
national prosperity. What will America look like if manufacturing jobs
continue to be outsourced to low-wage foreign competitors? Surveying
Kernersvilles grim economic prospects, Brod declares: "In part, the
answer to that question is, What sort of America do you see now?
Its here already."
Grim portents abound for other manufacturing-dependent communities and
for our nation as a whole. An academic study compiled in 2001 for the
U.S.-China Security Review Commission and the U.S. Trade Deficit Review
Commission reports: "In the months since the enactment of Permanent
Normal Trade Relations (PNTR) legislation with China there has been an
escalation of production shifts out of the U.S. and into China....
[B]etween October 1, 2000 and April 30, 2001 more than eighty
corporations announced their intentions to shift production to
China...." Since 1992, "as many as 760,000 U.S. jobs have been lost due
to the U.S.-China trade deficit," with a comparable number of jobs
disappearing because of outsourcing to Mexico. "The employment effects
of these production shifts go well beyond the individual workers whose
jobs were lost," continues the report. "Each time another company shuts
down operations and moves work to China, Mexico, or any other country,
it has a ripple effect on the wages of every other worker in that
industry" in other words, accelerating the "race to the bottom."
The August 25th Financial Times reported that Communist China is
"rapidly catching up with the U.S. as the worlds most popular
location for foreign investment": Last year, China attracted a record
$52.7 billion in foreign investment, "more than any other country."
"China has been widely blamed in developed countries for flooding the
industrialized world with cheap goods," commented Alan Ruskin of the
4Cast economic consulting group. "But Western investment is largely
making this rise in productive capacity possible."
Mercury Marine, the manufacturer of small boat engines and the largest
employer in Wisconsins Fond du Lac County, has announced that it
"will shift some production to China within the next three years,"
reported the August 8th Appleton, Wisconsin, Post-Crescent. Five days
earlier, the Milwaukee Journal Sentinel reported: "A small group of
Mercury Marine employees from China are coming to Fond du Lac to tour
the plant but not to take work to China, [company communications
manager Steve] Fleming said." But at some American companies, such
visits by Chinese employees have foreshadowed outsourcing manufacturing
jobs there.
The northwest Indiana town of Valparaiso confronts the prospect of
losing a local plant operated by Magnequench, an electronics firm
acquired in 1995 by a consortium including Chinese industrial
interests. If the plant is moved to China, 225 local residents will
lose their jobs. Even more shocking is the fact that the Magnequench
facility in Valparaiso "makes 80 percent of rare earth magnets used in
smart bombs," according to the Chesterton Tribune.
The erosion of the U.S. industrial base "has enormous national security
implications," reported the August 2003 issue of National Defense
magazine. "It has made the United States so dependent on foreign
countries for critical components and systems that it may have lost its
ability to control its supply chains. The United States is becoming
dependent on countries such as China, India, Russia, France and Germany
for critical weapons technology. Its conceivable that one of these
governments could tell its local suppliers not to sell critical
components to the United States because they do not agree with U.S.
foreign policy."
Writing in the June 2002 issue of Harpers magazine, business analyst
Barry Lynn points out that many of Americas premier corporations
including key defense-related firms now consider themselves "virtual
companies" depending on a complex and widely dispersed network of
suppliers around the world. Dell Computer, for example, assembles its
computers out of 4,500 parts manufactured in various Asian countries,
including Communist China. Dell an important defense contractor
maintains an inventory sufficient for only four days production. If
its supply line were interrupted for more than 96 hours, Dells Texas
plants would cease production.
Simply put, "the U.S. industrial base is being taken apart,
piece-by-piece, and relocated to other nations," conclude trade
analysts Pat Choate and Edward Miller. "In the process, much of
Americas industrial and military production base is being sold to
foreign interests, and more importantly a significant portion of it is
being physically relocated into other nations, including our most
likely strategic rival China."
For more than a century and a half, Americas manufacturing economy
attracted hardworking people from around the world eager to become
Americans. Manufacturing jobs offered these new arrivals entrie into
the middle class and helped them assimilate into our nations civic
culture. But as former Treasury Department official Paul Craig Roberts
points out, "The loss of high productivity jobs takes away the ladders
of upward mobility and wipes out our human capital."
As our manufacturing base is being stripped away, Americans may someday
find it necessary to emigrate to find manufacturing jobs. Case in
point: A machinist employed for several years at a major
Wisconsin-based multinational firm the father of a large family
described to The New American how he was told by his employer that
within several years he may have to "relocate to China" if he wants to
keep his job.
A "Political Thing"
John C. McCoy, owner of Omnitech Technical Associates in Bellingham,
Washington, commented to The New American that "China is being set up
as the center of global manufacturing. They have a huge supply of cheap
labor, cheap power, and very modern production facilities. Many,
perhaps even most, of the Chinese-made products being unloaded on our
docks and reaching our store shelves are assembled in automated plants,
and dropped into shipping boxes without ever being touched by human
hands." Many of those ultra-modern Chinese plants have been built by
Japanese firms, but others have been built in recent years by
U.S.-based multinational corporations.
McCoy, an activist with a group called Save our American Manufacturing
(SAM), points out that outsourcing to China has exploded because of a
chain reaction. "Once tooling capacity is lost, manufacturing simply
has to move," he told The New American. "People running companies in
this country generally dont want to go offshore. But once the
process got started, it snowballed, because the specialized tooling
capacity started to shut down and it takes a long time to re-tool, too
long to remain competitive in this globalized economy."
Behind the Decline
McCoy describes our declining manufacturing base as "a political
thing," rather than the result of market forces or irresponsible
corporate greed. "Present American policy has lost touch with knowledge
of how goods are produced," he contends. "America without the capacity
to renew and invent products will perish. The most important key to our
renewal, apart from the entrepreneurial spirit, is the ability to
engineer, and make tooling. Under current trade policy these assets are
quickly disappearing, being traded away. And once theyre gone, we
may never get them back."
The Communist Chinese regime enjoys an unnatural competitive advantage
over American manufacturers because it essentially employs slave labor.
That advantage is compounded by our own governments perverse
insistence on subsidizing, via the Export-Import Bank (Ex-Im), the
relocation of U.S. corporations to China. The Ex-Im Bank was created by
the FDR administration in 1934 for the purpose of encouraging business
investment in the Soviet Union. Through Ex-Im, corporate investments in
China are subsidized, and any losses incurred are socialized (that is,
picked up by U.S. taxpayers) while the profits remain private and
legitimate market competition is undermined.
Government-subsidized corporate relocation to China also accelerates
the process described by McCoy, in which Beijings manufacturing
sector "tools-up" even as ours "tools-down." As the May 1998 issue of
Harvard Business Review reported, American companies seeking to do
business in China "face many requirements to transfer technology or to
export a certain percentage of their products made in China. Controls
on foreign exchange keep them from moving funds freely out of the
country."
"Every firm that sets up for production in China has to turn over its
technology," Jerry Skoff, owner of Badger Metal Tech in Menominee
Falls, Wisconsin, pointed out to The New American. "Intellectual
property theft by the Chinese is very common. And any investment banker
familiar with the Chinese system will tell people preparing to set up
over there that they should pad their expenses by at least 40 percent
to allow for the graft, bribes, and other payoffs involved in doing
business over there." Given the pandemic corruption of the Chinese
system, the federal governments role in socializing risks and losses
for U.S.-based firms looms even larger.
Many U.S. companies were lured to China by the prospect of a vast,
untapped consumer market. But rather than selling goods in China,
American companies are exporting goods from there and completing the
circuit by sending jobs and plants back to China. Consequently,
observed Richard Bernstein and Ross H. Munro in their 1997 book The
Coming Conflict with China, "China has been getting American investment
capital and reaping windfall trade surpluses at the same time. As a
result, China is one of the leading foreign-exchange-reserve countries
in the world a bizarre situation for a poor and developing country."
Beijing benefits greatly from Chinas trade surplus because it can
subsidize predatory trade practices such as directing subsidies into
various manufacturing fields as a way of underbidding potential
American competitors.
In an interview with the Christian Science Monitor, Jay Bender, owner
of Falcon Plastics in Brookings, South Dakota, described "how one of
his customers, a manufacturer of fishing lures, has decided to move its
production from the U.S. to China.... [The fishing lure manufacturer]
asked him to bid on molds to make the plastic bait. He bid $25,000 per
mold. That was a competitive price, he said." However, the
potential customer found a Chinese source charging $3,000 for each
mold. "I cant even buy raw materials for that," Bender observes.
"There are two possibilities: Either they are subsidized by the
government, or they gave away the molds to get the manufacturing
business." To remain in business, Bender has had to lay off nearly
one-third of his workforce.
"Were killing ourselves," laments Jerry Skoff. "Bombs are falling,
but people arent paying attention. Were being reduced from a
manufacturing and hi-tech economy into a service economy and if things
continue the way they are, the service sector will eventually go the
same direction."
Abolishing the Middle Class
At the end of the process Skoff describes is the eradication of the
American middle class derisively referred to as the "bourgeoisie" by
Karl Marx. "Were basically liquidating our whole middle class,
polarizing people on the two extremes, haves and have-nots," warned
Roger Chastain, president of the Milliken & Co. textile firm, in an
interview with the Durham Herald. "Well be a third world country."
"It makes me wonder if there is some merit to the conspiracy
theory the idea that all of this is part of a deliberate scheme to
wipe out the middle class," Jerry Skoff mused to The New American. "The
middle class is always a pain in the neck where governments
concerned. Its where you find most of the people who complain about
taxes, regulations, and other policies. If you wipe them out, you just
have the ultra-rich and the poor a perfect arrangement for a
dictatorship."
http://kansascity.bizjournals.com/kansascity/stories/2003/09/15/daily3.html
1:59 PM CDT Monday
Sprint picks IBM, EDS for offshore IT work
Sprint Corp.'s selection of IBM Corp. and EDS Corp. as information
technology outsourcers will shave hundreds of jobs from the Overland
Park-based company, CIO Michael Stout told The Business Journal on
Monday.
The outsourcing effort, announced Monday, includes sending IT work
offshore, he said.
Stout said that he doesn't know exactly how many jobs will be affected
but that employees will be notified in the next four to six weeks.
"I know that it will be several hundred," he said.
Sprint (NYSE: FON, PCS) signed five-year outsourcing deals with IBM and
EDS. Financial terms of the deals weren't disclosed.
The company said it will save $150 million in the next five years
through the outsourcing effort.
The work being diverted will primarily be software coding, what Stout
called "commoditized skills."
Stout said that he hates the idea of displacing American workers by
sending work overseas but that Sprint must outsource to stay
competitive.
"It's a real conundrum for me," Stout said. "I want to provide American
jobs to American people."
Competitors such as AT&T Corp. and Verizon Communications Inc. have
proved cost advantages by going offshore, he said.
"My competition is already well advanced in this strategy," Stout said.
) 2003 American City Business Journals Inc.
http://www.financialexpress.com/fe_full_story.php?content_id=42073
Rockwell To Move High-end Integration Jobs To Bangalore
New Delhi, Sept 14: Automation software major Rockwell Automation
will move high-end integration work to the Bangalore application
development centre, a senior company official said.
The centre will move towards taking jobs in integrated architecture and
communications in the space of application development where it will be
involved in developing solutions which would integrate different
products and softwares, Scott Summerville, President (Asia Pacific),
Rockwell Automation, told PTI here.
The centre is currently involved in improvement of product
configuration and customer applications for the global customers of
rockwell. It is of tremendous commercial value, he said.
We will continue to add people in the Bangalore centre as conditions
warranted and on the basis of usage of hat activity on a global basis,
he said, adding India would continue to be in the application
development space.
We are not considering India as an R&D Centre.
The centre has 15 engineers currently.
In the Asia Pacific region, China occupies a central role in the
companys operation. Rockwell has an R&D Centre as well as an
application development centre in China.
Rockwell India is expecting a growth of seven to ten per cent in its
2003-04 topline on the back of strong demand from manufacturing and
utility sectors, fmcgs, oil and gas.
Rockwell Automation India is also expecting to increase revenue from
the OEM (original equipment manufacturers) segment from 23 per cent to
30 per cent, Mr Summerville said.
Rockwells India strategy has been to work closely with OEMs of large
manufacturers, he said.
He claimed a 24 per cent market share in India.
India offers 10 per cent of the Asia Pacific revenue currently and is
placed in the fourth-sixth position in terms of revenue contribution
after China, Korea, Australia and Japan, he added.
PTI
http://money.cnn.com/2003/09/17/news/economy/outsourceworld/index.htm
It's an OutsourceWorld
A controversial trend in the IT industry makes its presence known at
New York's PC Expo.
September 17, 2003: 2:47 PM EDT
By Mark Gongloff, CNN/Money Staff Writer
NEW YORK (CNN/Money) - Though it's on the outskirts of New York's
massive PC Expo, it takes up nearly a third of the expo's total floor
space at the Jacob Javits Convention Center, a metaphor for its growing
impact on the IT industry.
It's OutsourceWorld, and it's only getting bigger.
Just past the Hewlett Packard (HPQ: Research, Estimates) exhibit at the
22nd PC Expo, OutsourceWorld pitched its booths, filled with reps from
more than 80 global outsourcing companies who want to help customers --
U.S. firms, mostly -- cut costs and raise productivity by farming out
work, quite often overseas.
In booths decorated with the flags of Nepal, South Africa, Egypt and
many more nations, company and country representatives touted the
advantages of moving work abroad.
An Indian software development company, DSS Infotech International
Inc., promised customers savings of up to 50 percent by moving work to
its development centers. Bulgaria noted its information technology (IT)
professionals make, on average, just $300 a month. IBM (IBM: Research,
Estimates) commandeered a cafe to ply potential customers with free
coffee and brag about its outsourcing abilities.
More and more, U.S. firms, including CNN/Money parent company AOL Time
Warner (AOL: Research, Estimates), are getting the message and moving
jobs in IT and other services offshore -- pretty soon, the whole world
will look a little like OutsourceWorld.
Consulting firm Forrester Research has predicted that, in the next 15
years, 3.3 million U.S. service industry jobs and $136 billion in wages
will move offshore to countries such as India, Russia, China and the
Philippines.
Needless to say, this development is unwelcome news for thousands of
U.S. IT workers, who blame offshore outsourcing for a nagging lack of
IT jobs and stalling wage growth.
"Workers, from software developers to system administrators to
engineers, are very frightened about what this trend means about the
future of the industry and the future of their jobs," Joshua Sperry, an
organizer with the Communications Workers of America, said this week in
a press release announcing a protest of offshore outsourcing.
Exhibitors not so popular
John Sullivan, a senior account manager with Princeton, N.J.-based EPAM
Systems Inc., which has software development centers in Moscow and
Minsk, Belarus, said at his company's exhibit that he'd caught some
flak from PC Expo visitors accusing his and other companies of
destroying U.S. jobs.
Sullivan argued, however, that offshore outsourcing could actually save
jobs by cutting corporate costs and enabling companies to take on
last-minute, short-term projects, for which it's easier and quicker to
outsource than to hire and fire a bunch of temporary U.S. workers.
"We have companies that wouldn't be doing business at all if they had
to develop in the United States," Sullivan said. "They're in business
because of what we can provide."
Curtiss Montgomery, director of outsourcing services for Buffalo,
N.Y.-based IT staffing firm CTG -- which actually keeps most of its
outsourcing in the United States -- acknowledged that the flow of jobs
offshore was causing real pain to thousands of workers in the short
term.
But, echoing the sentiments of most economists on the issue, Montgomery
also pointed out that other U.S. industries, agriculture and
manufacturing, had gone through similar periods, and the country
eventually ended up the better for it.
"The problem is figuring out how to take displaced workers and help
them to do something more valuable for the economy," Montgomery said.
"You can't stop this -- but it can be guided."
http://newstodaynet.com/17sep/bu1.htm
Spryance to invest $5 m for Medical Transcription
NT Bureau
Chennai, Sept 17:
Spryance Inc, a healthcare BPO firm, is infusing $ five million
in its India operations to augment its medical transcription (MT)
activity by upgrading its Quality Assessment (QA) hub at Tidel Park,
Chennai, and to install a second QA facility as a back up and for
catering to increasing global demand for high value health information
management (HIM).
Raj Malhotra, president
and CEO, Spryance Inc Talking to the media yesterday, Raj
Malhotra, president and CEO, Spryance Inc, said, 'since we started
three-and-half years ago we had phenomenal progress in the medical
transcription market and will be leveraging our proven technology and
infrastructure into new arena of health care management like billing
and coding outsourcing'.
Spryance India Pvt Ltd (SIPL), an Indian subsidiary of Spryance
Inc, US, does sub-contract MT processing for over 125 US hospitals and
clinics through 35 medical transcription service organisations (MTSOs)
with a growth exceeding 25 per cent in the past consecutive 12
quarters. The soft arm of the World Bank, the International Finance
Corporation (IFC) ploughed in $3 mn and another $4 mn contributed by
management, resulting in the paid up equity of $ seven million for the
Spryance, Inc. For India operations, Spryance is now investing $ five
million taking its overall investment in the country to $ nine million
till date.
Malhotra says that India is on the right course to become
healthcare BPO capital of the world 'with vast pool of man power
resource yet to be tapped with adequate training for quality conscious
product delivery'.
However, presently India accounts for $80 million of more than
$16 billion MT business worldwide that is part of global Health
Information Management industry worth Rs 200 billion, growing
exponentially every year. The Spryance chief expects India to net $
three - four billion in MT outsourcing alone. As the MT industry in US
face declining takers in that profession, the demand for outsourced
market for MT grows by 13 per cent to touch $ seven billion in 2008, as
per a US industry survey.
Spryance Inc factoring the growing prospects of Medical
Transcription as 'a subset of overall Health Information Management has
given high priority to its India operations which is delivering five
million lines of transcription a month with Total Quality Management
(TQM) has its credo and being handled at its hub centre in Tidel Park,
Chennai'.
In India Spryance employs around 900 people around 500 of them
under home based franchisee system, 150 at QA hub in Chennai and
another 300 micro entrepreneurs. By 2003, it plans to expand their home
transcriptionists to 800, who would be serviced and evaluated by the QA
hub. 'We offer proprietary on-line training programme for our workforce
as per American Association of Medical Transcriptionists (AAMT)
guidelines along with traditional modules for both MTs and editors,'
says Malhotra.
'Spryance will continue to dominate in MT segment of healthcare
outsourcing, as more and more medicare providers, hospitals and MTSOs
in US look upon India as lucrative outsourcing centre for quality
health documentation enhancing cost management and improved
productivity,' asserts the chief executive. But with a rider that
Spryance approach to MT processing would be of 'high corporate
professionalism involving the workforce in quality guidance and helping
them to move up the value chain within the industry'.
http://www.zdnetindia.com/news/national/stories/89597.html
Intel Capital to invest in Indian BPO firms
Suman Layak, HT Correspondent,
September 16, 2003
Intel Capital, the strategic investment division of Intel Corporation,
is looking for investment opportunities in India in business process
outsourcing, software applications and wireless Internet or Wi-Fi.
John Miner, president of Intel Capital and vice president Intel
corporation, told the Hindustan Times in Hong Kong on Monday that Intel
is working with merchant bankers and venture capitals for possible
investments.
Intel has invested in quite a few Indian companies over the years,
including Indianinfoline and Sasken. Miner said: "Business process
outsourcing involves a migration of technology when a particular
function is outsourced and we are interested in deployment of this
technology through Intel products and architecture."
"By partnering with BPO companies, we are able to be involved in the
process and also help in developing the architecture," Miner added.
Intel Capital typically invests around 8-15 percent in a company and
looks at staying invested for at least three years on an average,
exiting ideally through an IPO.
http://www.pcw.co.uk/News/1143660
Unions still suspicious of outsourcing
By Dinah Greek [16-09-2003]
UK should not be allowed to end up as a nation of 'fat cats and
hairdressers'
A ground breaking deal between BT and trade union Connect on offshore
outsourcing has not dispelled union fears of UK job losses.
Connect has made an agreement with BT that if the telco intends to
outsource jobs or move them offshore, it will not lead to compulsory
redundancies.
Connect's members, all of whom are specialist and skilled IT workers,
will instead be offered jobs of similar status on other projects.
But other unions said that the deal does not address the fundamental
problems of potential job losses and lack of future employment
opportunities for UK workers.
The fear is that the drive towards offshore outsourcing may start with
low-skilled workers but move up the skills chain.
An Amicus spokesman said: "We have never had a hardcore attitude
against offshoring and are more than happy in some cases to encourage
it.
"But we don't want this to lead to companies eventually outsourcing
much of their entire operations and we end up as a nation of fat cats
and hairdressers."
The Communications Workers Union (CWU) is even more outspoken in its
condemnation of the trend, maintaining that the kind of deal Connect
was able to make is not robust enough for its members.
The CWU insisted that it could not accept a similar deal because it was
not "meaningful" for its members and placed no limitations or
restrictions on BT.
It further warned that the Connect deal could be the start of a
slippery slope and that many companies were watching BT's progress with
interest.
"The process starts with low-skilled workers and could move into other
job areas as BT will have the ability to transfer all kinds of work
abroad," said a CWU spokesman.
At a fringe meeting during the Labour Party conference the spokesman
also warned that the government is not fully aware of the implications.
"We need a dialogue with government because they do not understand the
impact that this bandwagon will have on the UK," he said.
http://www.chinapost.com.tw/business/detail.asp?ID=41339&GRP=E
Offshore job outsourcing leaves white collar Americans in lurch
2003/9/16
WASHINGTON, Agencies
Theresa Ruf is facing a career change. A medical transcriptionist for
years, she has seen the Oregon job she loved go to India, making her
two-year, US$8,000 college degree suddenly useless.
"Even if I get another job tomorrow, I'm going to have to leave the
medical transcription field because there's no guarantee a job will
last ... All of the services, nationwide, are going to India now," the
35-year-old said.
"I wasted my education for nothing."
Ruf, married and planning a family, wept when she learned she was just
one of 93,000 Americans laid off in August. The steep drop in payrolls
last month brought the number of jobs lost since the 2001 recession's
end to 1.1 million !X the worst "jobless recovery" on record.
And with more and more white-collar work flowing overseas, experts
worry it may be tough to retrain workers quickly enough to avoid
derailing an economic recovery that has only now begun to gain steam.
A recent study by the Federal Reserve Bank of New York found job
cutbacks in many industries are permanent, and warned that the time it
takes for job-seekers to switch careers and obtain new skills may
stifle a rebound in the labor market.
"The task of finding such jobs, difficult and time consuming under the
best of conditions, is likely to be even more complicated now, when
financial market weakness and economic uncertainty prevail," the report
said.
Forrester Research predicted last year that companies would move 3.3
million service jobs out of the country by 2015.
A career health care worker, Ruf is ashamed to admit that until she was
told transcription could be done for 2 cents a line in India !X
compared to 12 cents in America !X she had no idea so many
white-collar jobs were being sent overseas.
"When I went to school they said jobs were guaranteed !X 'They're
always going to need medical transcriptionists' ... I was kind of
ignorant," she said.
While the service sector absorbed many factory workers whose jobs began
going abroad in the 1970s, there is no such white-knight industry on
the horizon to rescue highly educated, white collar workers who now
fatten unemployment rolls.
President George W. Bush, whose 2004 re-election bid could be spoiled
by rising unemployment and the export of jobs, has said jobs growth
should resume later this year.
He is not alone in his optimism. Numerous signs suggest the economy is
finally growing strongly, and many analysts believe it is only a matter
of time before employers begin re-hiring !X even, perhaps, those
workers whose jobs were sent overseas.
"We won't know whether the jobs are coming back until we see a
sustained period of stronger growth," said Peter Kretzmer, senior
economist at Banc of America Securities.
"And my view is that while this trend is somewhat worrisome, let's wait
a few months at least and watch. Given the strong growth that we're
seeing this quarter !X probably about 4.5 percent annualized ... we
think that job growth will get underway," Kretzmer said.
But for the unemployed, the picture remains bleak.
Ruf has had just one job interview in the two weeks since being laid
off, despite 15 years' experience in health care and myriad technical
skills.
She cannot imagine going back to school to train for a new career.
"A degree in another field isn't necessarily going to guarantee me
anything either, so I don't want to take that kind of chance again,"
Ruf said.
http://news.bbc.co.uk/2/hi/business/3117520.stm
India firm rolls out next Rover
By Rory Cellan-Jones
BBC business reporter
Tata Motors, the Indian firm that is building MG Rover's next car for
the UK market, has been showing off the City Rover, which is due to go
on sale in November.
Tata, a former truck maker that expanded into consumer automobiles in
the 1990s, is making the City Rover at its plant in Pune, in the
western Indian state of Maharashtra.
If the project goes well, the Tata's alliance with MG Rover could
expand into a deal whereby Indian-designed cars are constructed in the
UK, says Tata boss Ratan Tata.
In an exclusive interview with the BBC, Tata Motors boss Ratan Tata
said he anticipates the two carmakers could work together on other
models.
'Not a flirtation'
MG Rover's new small car, the City Rover, is based on Tata's Indica
model, which was the first passenger car entirely designed and built in
India.
Ratan Tata, the boss of a corporate empire which includes steelmaking,
telecoms and the Tetley tea business, says the alliance with Rover is
"a very serious relationship, not a flirtation."
If the City Rover project works, he said, "the combined skills and
expertise could make a very interesting combination."
Engineers from Rover's Longbridge plant have been with Tata in Pune for
the last few months, as the factory prepares to start production of the
new model.
Nervous, but proud
On the day we visited, a sign proudly claimed the completion of the
first City Rover.
Nervous managers were not keen for us to examine the front of the car
as the fine details are still being sorted out. But it looks very
similar to the Indica - with more stylish trim and a Rover badge.
But Tata says the suspension has been changed to suit British roads.
"It will feel like a Rover," a Tata manager insisted.
Ratan Tata said one way to develop the alliance would be for new models
to be engineered in India, then produced in the UK.
"We would create efficiencies and economies for ourselves, each
widening our product range and sharing costs," he said.
Cheaper workers
For Rover there is one big advantage in building its new car in India
rather than Birmingham - labour costs.
Pradeep Mali, a 22 year-old who has just graduated from Tata's
apprentice scheme, earns around #100 ($160) a month.
His British equivalent would earn fifteen times as much, but Pradeep is
convinced he is just as skilled.
"We'll produce such quality that our work will compare to a European
workforce," he told me, from under the bonnet of a new Indica on the
production line.
Tata has long been India's biggest truck maker, but its decision to
invest in car production in the mid-90s , without linking up with an
overseas firm, was seen by many as a foolish gamble.
Today the Indica project is profitable but the coming months will show
whether British motorists really do want to invest in what is
essentially an Indian car.
Story from BBC NEWS:
http://www.computerworld.com.au/index.php?id=1065817862
Analysts query Telstra's moves, jobs plan
Julian Bajkowski, Computerworld
18/09/2003 10:01:11
Less than a month after Telstra issued guidance that it would slash IT
costs by half over three years, it has again spooked analysts with
confused messages over sourcing and two major contracts awarded to
Indian-based software house Infosys.
Infosys is understood to have secured contracts for consulting on
Telstra's Siebel-based ERP systems over Deloitte Consulting to the tune
of $10 million, while IBM GSA has been spurned in favour of the Indian
based powerhouse for infrastructure services to the tune of $75
million. Combined IT job losses for both the projects are tipped to top
350, with Infosys delaying local hiring announcements until contractual
ink has well and truly dried.
Yet it is Telstra's newfound passion for outsourcing, after publicly
embracing insourcing - coupled with shrinking revenues that has
analysts wondering.
JP Morgan analyst Lynn Canalese is one watcher still looking for
straight answers, sceptical that the technology-based cuts will yield
the desired savings.
"I'm not sure that [Telstra] will be able to deliver based on its
strategy of insourcing versus outsourcing. The market looks at it from
an overall cost perspective. The [cost cutting] presentation did not
address jobs it did not include labour costs. The cost cutting is
coming from systems improvement.
"The interesting thing is what happens to jobs, and that is still
unclear with aspects of [Telstra] insourcing rather than outsourcing
IT. Some jobs will be done in India rather than here, but you still run
the overhead of having to manage some of the systems that still have to
be here. With the lack of traction on the cost cutting, we are not
giving them the benefit of the full $600 to $800 million over the next
three years", Canalese said.
Telco analyst Paul Budde is similarly unconvinced about the strategic
direction of cost cutting, arguing that ultimately new investment will
be needed to stem the loss of voice revenue.
"The future of the telcos depends on data communications and
applications, and they are not good at that - so they have to pay big
money for applications. That's not going to go away. You cannot expand
your business and develop new applications and all that sort of stuff
by cost cutting. It's ridiculous. There's not a way in the world you
can do that.
"Most companies would go for growth, but there is very little new
investment. Telstra basically maintains its business that's where the
$3 billion goes to annually: to maintain the network. There is very
little to nothing invested in new developments. That's your future
business; if you don't do that, you kill your business. It might reap a
profit now, but it can't go on forever," Budde said.
Budde says that any labour shift to India must be viewed in context.
"We will have to be better at other things. It's really stupid to shoot
the Indian people for being good at something and saying we don't want
something to move to India. It's like saying let's dig up coal in
England."
http://www.theregister.co.uk/content/4/32730.html
Outsourcing: does it reward theft?
By Simon Galbraith, Red Gate Software
Posted: 09/09/2003 at 13:28 GMT
Opinion Simon Galbraith is co-founder and marketing director for Red
Gate Software, a supplier of tools for software developers and testers.
As I was walking down the street last week I saw a young man loitering
around a rich-looking tourist couple sitting down at a cafi enjoying
a coffee - coats on the back of their chairs. There was a commotion and
the young man picked up an expensive leather jacket from the back of
the man's chair while he was distracted. The young man sauntered off
across the square wearing the jacket as if it had always been his.
As I stood waiting for a bus yesterday a young woman approached me
asking if I was interested in a leather jacket. She was attractive,
flirtatious and a little bit desperate. I said "sure - why not"? I
tried it on, it fit, and the girl told me it looked good on me. I'm not
100 per cent certain but I'm pretty sure that it was the same
high-quality jacket I saw being 'lifted' last week at the cafi.
Anyway it was a damn fine jacket. We haggled for a while over the price
and settled on $50. It was a bargain; the jacket would retail for at
least $600.
When I'm not negotiating for possibly stolen goods, I work as an
executive of a small software company with a very simple business
model:
1. We write simple software tools that developers and DBAs who use
Microsoft technologies find extremely useful (comparing SQL databases,
code profiling etc).
2. We market them.
3. Developers and DBAs who use Microsoft technologies respond to our
marketing and visit our website. Some download a fully functional trial
version of our software.
4. They try it out during the 14 days that the trial lasts.
5. Some of them buy it.
6. We use the money that comes from this to pay our costs and invest in
further product development and improvement.
7. We continually try to get better at steps 1-6.
Since we started in 1999 we have had over 4000 customers. Our
evaluators are from all over the software-producing world. Around 15
per cent of them are people based in India, China, Malaysia and other
countries that have become global centres for IT outsourcing. Many
large companies have decided to outsource some of their software
development to these countries, citing the cost advantage as a key
reason to make the switch.
Of the 15 per cent of our evaluations that have originated in these
global outsourcing regions, we have made only one sale. Given our
normal strike rate we'd have managed several hundred sales. I'm all for
accepting a bit of statistical variation without getting anxious, but
there is only one rational explanation - theft. (FYI - the one sale we
made was to a British company's newly outsourced operation; the company
insisted on licensing compliance from its suppliers.)
To put it plainly, a much greater percentage of corporate users in the
developing world hack our licensing systems than do those in the more
developed parts of the world. Incidentally, this doesn't apply to
expats of these countries who when based in the USA and UK are stalwart
customers of ours - we've sold many more licenses to Indian expats
living in Alaska, for example, than we have to the entire
sub-continent.
There are two logical reasons behind all of this - either it is the
refusal of company management in developing countries to give people
the tools to do their job properly and turning a blind eye to theft or,
more seriously, the official management encouragement of the hacking.
Although losing 15% of our income to theft is annoying, imagine how
much worse it is for software tool companies in these developing
countries. Their home market is closed to them, which probably explains
why so few decent vendors have sprung up despite their apparent
abundant pool of talent.
What really gets my goat is the gleeful quotes about outsourcing that
appear in the business press. "Bob Jones from Multinational Inc.
predicts that his company will achieve savings of $23M over the next 3
years on development costs." These stories always make me wonder: Are
these companies saving costs by using stolen software and generally
shafting other people's intellectual property?
If I sent around a company-wide email boasting about how I had managed
to lower my jacket costs for the next two years by purchasing a stolen
one, you would consider it right and proper if my colleagues avoided me
for a while and peed in my coke when I wasn't looking. When the CTO of
a multinational corporation announces a new outsourcing deal, however,
there are bonuses and accolades for 'saving' lots of money.
If you are a CTO reading this, you might be thinking: "What problem is
it of mine that some whining tool supplier is getting shafted by the
company I'm outsourcing to?" Well, consider this: There are some
aspects of what you supply to your customers that boil down to
intellectual property and some portion of what your company earns
relies on that.
Let's imagine that Multinational Inc. takes Tiddly Ltd. to court to
contest an alleged IP violation. Multinational might face a novel but
very effective technique on the part of the defence: Multinational Inc.
has no respect for IP in its own operations; in fact, the company is
happy to use outsourcing as a vehicle to avoid it. Irrespective of the
rights and wrongs of the legal argument, Multinational is going to find
it hard for any judge or jury to rule significantly in its favour.
Multinational might win, but it will probably only get a dollar and no
costs.
If you fail to insist on compliance from companies that you are
outsourcing to, then how can you argue for compliance in your own IP?
If a company wishes to be avoid this legal and ethical issue, it must
put explicit terms in its outsourcing contract that suppliers will use
no stolen or hacked software in the work under contract.
As you might have surmised, I decided not to buy that mythical jacket.
The reason I didn't should be the same as the motivation behind
integrity in outsourcing: people do business with me and my company
because we have integrity. Companies that lose their integrity lose
their business. No-one thought that being dishonest at Enron was a
problem until it was too late. .
http://forbes.com/forbes/2003/0929/058.html
On The Cover/Top Stories
Giant Sucking Sound
Robyn Meredith , 09.29.03
Battered by the tech slowdown, EDS is shipping white-collar jobs
offshore to catch up with low-cost competitors.
The new Electronic Data System office in Mumbai (formerly Bombay) is
half a world away from company headquarters in Plano, Tex. Getting to
this Indian office requires a bumpy two-hour drive from downtown
Mumbai. At every stoplight women dressed in rags and holding emaciated,
dull-eyed infants tap car windows to beg. In the slums lining the
roads, thousands of people live crammed into dirt-floored rooms,
sheltered from monsoon rains by plastic sheets.
At the end of the drive is a heavily guarded, new office tower that
rises above the slums. This is where Amit, 24, works. "This is Andy.
How may I help you?" he says politely, hour after hour, to the
Midwesterners who have forgotten their e-mail passwords or need the
phone number of a colleague. EDS (nyse: EDS - news - people ) hired
Amit and 500 of his colleagues--young men and women dressed in khakis
or saris--to answer phone calls and e-mails on behalf of American
companies that have outsourced tech work or customer service calls to
EDS.
Amit and colleagues are paid $1.25 an hour. His counterpart in the U.S.
would get $10. On that difference rests whether or not EDS can wiggle
itself out of deep trouble. Victimized by cheap outsourcing by
competitors, EDS is playing the low-cost-labor game itself now. It is
rushing to hire thousands of mostly Asian college graduates like Amit,
who are desperate for the kinds of jobs found in the U.S. Frantic to
cut costs, EDSplans to hire 13,800 workers by the end of next year--a
tenth of its current global work force of 137,000--in low-wage
countries like India, Malaysia, Hungary and Mexico, places where
starting pay is as low as $2,400 a year. Meanwhile, EDS plans to lay
off at least 2,750 higher-paid workers, mostly in the U.S. and Europe.
Companies as varied as General Electric (nyse: GE - news - people ) and
Morgan Stanley (nyse: MWD - news - people ) are making the same
calculation. White-collar jobs--in engineering, programming and
accounting--are leaving America's shores for low-cost locales at a pace
of nearly 4,000 a week, according to Forrester Research. The U.S.,
Europe and Japan combined are losing 600,000 a year, says McKinsey &
Co.
Cheap labor is the motivation for these companies; for EDS it's the
heart of new Chief Executive Michael Jordan's strategy to catch up with
the competition. Low-cost outsourcing companies like India's Wipro
(nyse: WIT - news - people ) and Infosys (nasdaq: INFY - news - people
) are snatching away business, while such rivals as IBM (nyse: IBM -
news - people ) and Hewlett-Packard (nyse: HPQ - news - people ) are
aiming squarely at EDS' core business--running the computers of big
corporations. Hurt also by the slowdown in tech spending and
unprofitable contracts, EDS' second-quarter earnings dropped 56% to
$138 million and its credit rating was cut to just above junk.
"The concepts of low cost and high value must be present in every
action we take, in every service we provide, in every piece of new
business we pursue," Jordan told employees in July. Jordan took over
when Richard H. Brown was fired in March after unexpectedly disastrous
third-quarter results led last year to a Securities & Exchange
Commission investigation, which continues.
Jordan plans to triple the number of Indian workers to 3,500 by the end
of next year. Indian programmers are maintaining old software written
in the U.S.--some of it in Cobol--and making it work alongside newer
programs. Indian keypunchers are typing in address changes for American
workers who notify their companies they have moved. Others are updating
computerized records to keep paychecks and 401(k) benefits going to the
right place. EDS' U.S.-certified CPAs in Chennai (formerly Madras) are
preparing corporate tax returns for an American manufacturing giant and
doing bookkeeping tasks outsourced by other big companies. (EDS won't
name its clients.)
The picture is the same companywide. In the same month that Jordan said
hewould lay off thousands in the U.S. and Europe, EDS announced the
opening of the Mumbai office and another in Auckland, New Zealand. It
is scouting for bigger offices in Malaysia, where 100 jobs will be
added in the next 18 months to the 400 already there. Workers do such
jobs as processing bills for phone companies, handling expense report
payments and writing code to keep computer systems from overloading. "I
can offer someone the same capability at half the price," says Michael
Stockwell, managing director of EDS Malaysia.
Why half the price when wages are just one-tenth? Higher expenses for
new computers and long-distance phone bills account for some of the
spread. Wider profit margins are part of the picture, too; suppliers
don't pass along all their labor savings.
Jordan's strategy is even playing out at EDS unit A.T. Kearney, its
troubled management-consulting firm. Jordan isn't hiring cheap
consultants in India--not yet, anyway--but he is hiring the back-office
support they need. So far Kearney has hired 50 workers for a new office
in New Delhi. They sit next to 75 empty cubicles that are scheduled to
be filled by the end of the year as layoffs claim the jobs of Kearney's
staff elsewhere. The consultancy, based in Chicago, employs 5,000
people.
On The Cover/Top Stories
Page 2 of 2 from Giant Sucking Sound
Robyn Meredith , 09.29.03
Half the Indian workers prepare PowerPoint presentations for the firm's
six-figure consultants in the U.S. or Europe. Others help maintain
Kearney's computer network and Web sites. The techworkers earn about
$4,500 a year compared with about $45,000 a year for workers doing
similar jobs in the U.S.
To overcome resistance from U.S. managers, Kearney's Indian executives
had researchers do work overnight that couldn't be finished the same
day in the U.S. When the quality of the overflow work proved
first-rate, more responsibilities were assigned to Delhi. "It is very
addictive, once companies learn what is possible," claims Chandramowli
Srinivasan, head of EDS and A.T. Kearney operations in India.
There are obstacles big and small, the least of them American
pseudonyms like "Andy." Indian workers who take phone calls for EDS
clients attend weeks of classes to learn to speak with American accents
and idioms. And it's too early to say whether certain white-collar work
can be done so many miles and time zones away without foul-ups.
There's also a price to be paid in angry and anxious workers. "I'm sure
I lost my job to offshoring," says Richard Randall Mohler, 51, an EDS
programmer from Midland, Mich. who earned $68,640 a year until he was
let go last year. That job in India pays about $6,500 a year. Mohler
remains unemployed and says his former colleagues at EDS are worried,
too. "They are all scared to death," Mohler says. "When you can get the
same job done for a fraction of the cost, it puts everybody on edge."
Is Jordan the bad guy? If he doesn't export jobs, someone else will.
http://www.wired.com/news/business/0,1367,60495,00.html
Bidding Your Job Bon Voyage By Michelle Delio
Story location: http://www.wired.com/news/business/0,1367,60495,00.html
02:00 AM Sep. 19, 2003 PT
NEW YORK -- TechxNY, the technology tradeshow formerly known as PCExpo,
has evolved -- or perhaps devolved -- from a showcase for cool new
products to a rather bizarre human resources bazaar.
Representatives from Bulgaria, China, the Dominican Republic, Egypt,
Grenada, India, Romania, Russia and Nepal are front and center at the
show, busily trying to convince North American companies to move chunks
of their business offshore.
Once barely fitting on two sprawling floors, PCExpo/TechxNY now
occupies about a quarter of that space. Outsourcing firms' booths make
up roughly half of the 200 exhibitors at the Jacob Javitz Convention
Center this week.
"It's a small world, after all," said Ken Honner, a Brooklyn-based
network consultant. "And when you see all these folks here jockeying
for 'our' jobs, I have to admit it feels like it's getting a little too
damn small for comfort."
Others also said they were disturbed by the outsourcing emphasis of the
show.
"I'm just starting to see a small uptick in my business, and so I came
to look at new business equipment," said Mike Monroe, who runs a small
graphic design shop in Manhattan. "And I'm not at all pleased with what
I'm seeing here.
"Given the economy, and how this city is still struggling to come back
from economic disaster, I think this is neither the time nor the place
to host a 'let's take your jobs away' tradeshow."
"This is disgusting," said stockbroker Martin Gonnet. "Leaving aside
the issue of jobs lost in this country, this strikes me as nothing more
than a slave market where you can buy desperate people very cheaply and
use them until you find someone who will work for even less."
In the Outsource World pavilion, two dozen Indian companies are pushing
people, products and services. Indian firms have recently become
concerned that they may see cutbacks in their bustling outsourcing
industry as other countries begin to offer cheaper rates for the same
work.
In the other corner, occasionally glaring over at the Indian firms'
booths, are the crews from Romania and Bulgaria, whose representatives
insist they are the obvious "correct cultural choice" for European and
American firms.
Russia is offering the services of experienced rocket scientists for
about $40,000 per year.
Egypt is positioning itself as a "mediator," offering outsourcing
services that can "also open doors to new markets in the Middle East
and Africa," said Manal Amin, deputy chairman of the Egyptian Software
Foundation.
Nepalese representatives are trying to convince potential customers
that terrorism isn't an issue in outsourcing work to areas of the world
that have been troubled by political instability.
"It is a sad fact that terrorism now happens everywhere," said Bhavana
Rana, managing director of Data Resources, an outsourcing company in
Katmandu. "No matter what happens, we can still do the work over the
Internet."
Those who are uncomfortable sending critical bits of their business to
places they might not want to visit on vacation can outsource closer to
home. Several American firms are now offering to outsource outsourcing
by managing offshore contractors.
Stephen Muirhead, CEO of Absolute Quality in Maryland, said his company
will manage outsourcing jobs for a fee that's only slightly higher than
you'd pay for just offshore workers.
Visitors to the expo seem taken aback by the breadth and depth of the
services being offered by the outsourcing firms.
"These folks are offering someone to do virtually everything any
business might need done, for amazingly low fees," said Fred Shriver, a
Manhattan computer repair consultant. "I knew that customer support was
moving out of this country, but I didn't realize that stuff like
graphics design, payroll and sales could be outsourced, too."
During what was billed on the tradeshow's schedule as a "lively" debate
to determine whether outsourcing is our "friend or foe," a panel of
outsourcing advocates attempted to convince an audience composed mostly
of other outsourcers that outsourcing actually saves jobs by exporting
them.
Companies in North America save money by paying low wages, in many
cases with no unemployment or health insurance, to offshore employees
who are ready, willing and -- they insist -- able to do everything from
hiring, firing, accounting, software programming, computer security,
graphics and multimedia, as well as the expected product-support
services.
All those savings allow companies to retain their work forces,
outsourcing company reps said again and again during the debate.
Without outsourcing, North American companies would have to fire more
workers.
"Anyway, this is like free trade -- you can't outlaw it," said one
representative from India, who was in the audience during the debate.
Her remark was greeted with vigorous approval from many in the
audience.
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