eric lundquist
(On)shoring up IT
Ou TsOurcIng shOuldn'T mean OffshOrIng anymOre
I
n these tough economic times, it makes Lately, some cracks have appeared in the rush to either acquired or go out acquiring, you need to
sense to consider outsourcing. But, until offshore. For example, a recent article in the Financial know where your costs are. If your remaining custom-now, outsourcing has typically meant Times called into question the benefits of offshoring ers are the only barrier between you and the unem-offshoring. Something has changed, and call centers, citing longer call times to resolve prob- ployment line, you want to make sure those custom-
I think the time is right to rethink outsourc- lems, difficulties in communicating with contractors ers are being treated with the utmost care.
ing and introduce onshoring. and the rising cost of call center contracts. All of this adds up to keeping your resources close
The idea behind outsourcing was based In what can only be charitably called an uncertain at hand.
largely on economics. A company could cut certain
staff—such as in the call center—and contract those
positions to a low-wage country. The economics were A recent study estimated 42
brutal, and in many ways productive for a company’s
balance sheet. The only question was: How rapidly could percent of jobs in the United
outsourcers such as Infosys, WiPro and lots of Chinese
hard goods manufacturers move up the supply chain? States could be offshored.
Several studies suggested those companies could
move way up the supply chain to the land of the
white collar jobs of investment banking; product devel- economy, the wisdom of striking contracts with com- Two other points: With costs going up in other parts
opment and design; and high-content, high-value panies halfway around the world is truly suspect. of the world and costs going down in the United
products and services. For CIOs, this is especially true. If you are really States, the gap between onshore and offshore is
A recent Harvard Business School study estimated going to pare down your technology projects to even smaller. And, with unemployment showing no
that 57 million, or 42 percent, of the jobs in the United those that are absolutely vital to your company, signs of slowing, onshoring may be the right strategy
States could be offshored. The only truly “safe” jobs you probably don’t want to hand those projects off not only for economic reasons but for building a bet-were those that require hands-on activities, such to the lowest bidder. If you are going to embark on ter society. ´
as those performed by a plumber or child-care some cost-saving project based on hosted software
worker. (Of course, if Japan continues with its robotic or extra tight security, you might want to keep those CIO Insight Editor at Large Eric Lundquist can be
advancements, even those jobs are at risk.) under close watch. If your company is going to be contacted at
ericlundquist@ziffdavisenerprise.com.
