http://www.businessweek.com/magazine/content/10_46/b4203016835355.htm
This article focuses on the external factors hitting outsourcing companies located in India. With the US as their biggest market, and Obama working to keep jobs from being outsourced, this represents a serious threat to Indian companies. They have had to react to this factor that is external to the company in 2 majorly different ways. First, they've tried to diversify, mostly into China. Second, they've made acquisitions in the U.S. and tried to move more of their work into the US so there would be more of a sense of near-shoring instead of offshoring. This makes many US companies more comfortable with the prospect of outsourcing these huge IT contracts. Nonetheless, it just goes to show how external factors to your company can change the way you approach business overnight.
While I commend Indian outsourcing companies for working on diversifying into China and into the US, I don't think it will have a huge effect. The reason people outsource TO India and China is the cheaper labor. The cheaper labor comes from a lower GDP per citizen and a lower standard of living. Why would you move your work sites into the United States, where corporations that are outsourcing are losing the competitive advantage of cheaper labor through a lower GDP? Even if the companies can keep their prices lower than nearshore competitors on US soil, it is still drastically less than what it would have been in India.
ReplyDeleteMost corporations are for profit companies. They want/need to make a higher profit. They will do whatever it takes to do just that. If that means offshoring, they'll do it.