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Web Exclusive: A Brief (Recent) History of Offshoring







Web Exclusive: A Brief (Recent) History
of Offshoring

Web Exclusive: A Brief (Recent) History
of Offshoring
04/15/2004 05:02 AM

The CEO of Covansys, one of the first American organizations to explore offshoring, considers how Indian government regulation, the Y2K problem, and the widespread acceptance of the Net contributed to the current job loss and economic insecurity.




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Web Exclusive: A Brief (Recent) History of Offshoring

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Offshoring By Any Other Name 09/24/2004 08:06 PM
Not too many people like the sound of "offshoring" -- literally, the sound of the word -- not just it's meaning. So the euphemisms to replace "offshoring" are springing up everywhere, with not-so-sneaky terms like "co-sourcing" and "global sourcing" peppering our vernacular. Outsourcing is dead, too, replaced with the mouthful: "business process transformation services" agreements. Isn't that so double-plus-ungood? Obviously, offshoring is still with us, and it's going to be with us, and it arguably should be with us. So while avoiding the word offshoring might avoid the spread of panic, hopefully we're not forgetting to address the root causes of our concerns: that we haven't answered the 'What's Next?' question. Though perhaps using bigger words and round-about descriptions is part of the plan to help educate the country to think more critically.

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According to a survey commissioned by Bureau of Labor Statistics, just 2.5% of jobs lost are due to offshoring.  AFL-CIO thinks the survey is faulty.  My own experience suggests the number is bigger, at least in the Silicon Valley where I work.  At one company I have worked with for many years, it's engineering department was downsized to barebones and replaced with a large growing team of engineers in India.  2.5%?  Not even close


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Yet another article that takes a look at the "offshoring trend", but this one actually takes a step back to put the whole thing in perspective. From a historical vantage point, this trend doesn't seem all that different that past trends where products made in the US were eventually outsourced. The article quotes Walter Mondale from twenty years ago, when he was worried about chip production going to Japan, saying: "What are our kids supposed to do? Sweep up around Japanese computers and sell McDonald's hamburgers the rest of their lives?" Instead, what happened was that cheap chips resulted in a technology boom that certainly helped the US economy quite a bit over the next two decades. The article also points out what we've been saying here all along: the rush to outsource is a bit shortsighted for most companies. Those who are only looking at the salary aspect of it, don't realize that there are many more costs involved, and many are already starting to regret the decision to outsource. However, in some areas, it clearly does make sense to outsource, but the number of jobs that will go overseas each year is a very very small number - and pales when compared to the number of jobs lost each year naturally through layoffs and company closings. Finally, the article points out that, when done right, offshoring is a net positive for our economy - and has been historically. This doesn't mean that it doesn't make life hard for some people who lost their jobs. However, instead of thinking up protectionist plans, the US should be making an effort to train these displaced employees for better jobs in sectors that need them.

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I felt really sorry for the guy that called the office last week. I get the holler from across the hallway hey some guy wants to talk to you about offshoring wanna take it? Hmmmmmmm those of you that have been reading here for awhile know my stance on offshoring. (When Hell freezes over) So I take the guys call. The least he could have done is called me via a real land-line instead I get the common static buzz of a net based call. We talk for about 30 minutes while I pick the guys brain nothing really brain shattering came out of the discussion.

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US Chamber endorses offshoring 07/03/2004 12:37 AM
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Cultural Reasons For Offshoring 12/16/2003 02:07 AM
While I've made it clear that I think both sides on the outsourcing debate have taken their arguments too far, I don't deny that the decision comes down to a money question. The companies that are rapidly pushing towards offshoring are convinced that it will save them a ton of money. What many are finding out, of course, is that it's much more costly, for a variety of reasons (from cultural differences to communication problems halfway around the world). However, now some analysts are saying, beyond the money issue there are other good reasons for offshoring. They even believe that offshoring will help rejuvenate the US software industry by allowing developers here to focus on innovative products, rather than mundane projects that can be outsourced. While I highly doubt that any company is taking that into account in coming up with their outsourcing plans, it is a reasonable response to those who continue to favor protectionist policies that will only make the economic situation worse for the American software industry by making us less competitive.

Czech mate for IT offshoring


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Digital Agenda Rather than try to reverse the outsourcing wave, the best way for America to fend off foreign competition is to invent technologies.

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