Outsourcing Is A Win-Win For Business And Consumers, So Why Are Corporations So Shy About Their Offshore Plans? - InformationWeek

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IT Leadership // IT Strategy
Commentary
3/21/2006
10:40 AM
Paul McDougall
Paul McDougall
Commentary
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Outsourcing Is A Win-Win For Business And Consumers, So Why Are Corporations So Shy About Their Offshore Plans?

Dell and IBM are set to add thousands of workers to their payrolls in India as they turn more and more work over to the country's low-cost workforce. Surprisingly, and unlike most of their corporate peers, they're coming clean out about their plans. Michael Dell told reporters this week that his company will add 10,000 jobs in India over the next three years. IBM issued a press release heralding a new center in Bangalore that will house all its SOA solutions development. Here's why more companie

Dell and IBM are set to add thousands of workers to their payrolls in India as they turn more and more work over to the country's low-cost workforce. Surprisingly, and unlike most of their corporate peers, they're coming clean out about their plans. Michael Dell told reporters this week that his company will add 10,000 jobs in India over the next three years. IBM issued a press release heralding a new center in Bangalore that will house all its SOA solutions development. Here's why more companies should follow their lead.U.S. tech firms benefit greatly by tapping cheap, highly skilled IT workers in emerging countries. It allows them to take on projects they couldn't otherwise afford, they have more money to invest in R&D, and their stock price increases as profits grow. Their customers also win because they pay lower prices for goods and services such as software development and application integration.

Ultimately, offshoring's value chain extends to consumers, who suddenly find they can buy, say, a good laptop for less than $500. So instead of keeping mum on the issue and ceding the high ground to critics who claim outsourcing will lead the U.S. back to the Stone Age, corporate America needs to be out there trumpeting its benefits.

Why all the hush, hush in the first place? The fact is, outsourcing is still controversial as some U.S. jobs are inevitably lost in the process (in many cases, these are jobs that would have been killed off by automation, anyway). So most companies that send work abroad take the safe route and do it on the QT. To the extent they acknowledge it at all, they employ euphemisms--like "bestshoring" or "rightshoring"--that would insult the intelligence of a four-year-old and don't fool anyone.

But all this secrecy comes at a cost. While business leaders remain silent, the anti-outsourcing lobby, led by TV ratings whores like CNN's Lou Dobbs and politicians looking for an easy mark, clamor for laws that would end the practice. By failing to explain how outsourcing's benefits ripple through the economy, U.S. multinationals run the risk of prohibitive legislation gaining traction in Congress and state legislatures. That wouldn't be good for anyone.

IBM and Dell have shown that they may be finally getting it. But more companies that operate on a similar scale need to step out from behind poorly conceived PR strategies and let their investors, employees, local communities, and the general public know about their offshoring plans and the benefits they hope to realize. Otherwise, it's a pretty one-sided debate.

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