Should I Stay or Should I Go?

[kalian]

http://www.msnbc.msn.com/id/4710299/

April 19 issue - Wesley Bertch admits he fell for offshore outsourcing "hook, line and sinker." So when Bertch, chief techie for Minneapolis-based Life Time Fitness, a health club chain, needed software to evaluate potential new locations for gyms late last year, he looked overseas where he could pay $6 an hour instead of $60 for programmers. He hired a large, reputable Indian outsourcing firm a few months ago, then sat back and watched his troubles mount. Not only did the offshore team produce code that was full of bugs, they ran up big bills working overtime to fix their mistakes. Bertch finally canned the offshore contractors, hired several local programmers and started preaching to industry colleagues that managing such projects across oceans is doomed to failure. His biggest surprise? "I've since talked to scores of my peers, and we are all singing from the same hymn book," Bertch says.

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Until recently, sending jobs overseas seemed like a bulletproof business strategy. By outsourcing routine tech and customer-service jobs to educated, eager workers in countries like India and the Philippines, companies sharply cut costs—savings that outweighed the inevitable negative publicity. The movement has gained such momentum that it's become a big election issue, with candidates sparring over "Benedict Arnold CEOs" and how best to keep jobs in the United States. But many American companies are discovering that sending work to low-wage countries is not as easy or as inexpensive as advertised. In hotspots like Bangalore, wages and real-estate prices are soaring to record levels—though still generally a fraction of U.S. costs—which cuts into potential savings. As U.S. companies move from exporting call centers to outsourcing more complex work like software development, they're finding overseas workers are often ill-equipped to deliver consistent, quality work. The bad experiences are creating a boomerang effect—the return of jobs to the United States—which some have dubbed "onshoring." Analysts at research firm Gartner have declared 2004 the start of the "trough of disillusionment" with offshoring.

...more...

Good editorial about how outsourcing jobs overseas is causing some
"unforeseen" problems...

[IrishBloodEngHeart]

1. I work for one of the largest insurance firms in the US

and we have found that the off shore workers are good for maintaining what has already been created, but they are not particularly good at creating new programs to fit our needs. There is too much local knowledge needed to have it done by people who don't understand our business.

So, we still have a pretty sizable IT dept. We outsource some, but its only the more routine, maintance, low level work.

[madrchsod]

2. isn`t the same thing

happening in the consumer service industry? i have read about the inability to "fix" consumers problems. cheaper doesn`t mean better when it comes to customer satisfaction...

[brokensymmetry]

3. Good article!

:kick: