10 replies to this topic

[Phil]

Outsourcing

What do you feel should be done about it ?

Should our government (UK) implement laws to stop it / restrict it ?

Do you think it's fair game ?

Just interested on other peoples views.

[Glenn Meyers]

If you have been watching events in the US you will see that Outsourcing is a VERY DANGEROUS problem facing those of us in the IT world.
The Oracle DBA I earned has been rendered worthless due to the outsourcing practices of the larger corporations. The trickle down effect means that as a newer DBA I am competing with folks that have 6-10 years experience even for ENRTY LEVEL positions. The going rate here for a DBA has dropped by 40% due to the surplus of people and the lack of jobs.
I suggest that if you still have the window, that you get your lawmakers going NOW to fight this menace. It is too late to do that here.

Glenn

[wilhelgl]

Phil,

Restrict it if you can. The US businesses have found that in some areas it works great, manufacturing and assembling, but in other areas it creates problems. Try communicating with a company after hours and you'll usually have someone on the line that is hard to understand. I know of companies that have outsourced their programming and the projects took a lot longer than projected to pass quality control.

Gary

[Chris Martin]

Is this question really about "outsourcing", or "off-shoring"?

The company I work for has been involved in many outsourcing deals and the deals I've seen here in Sweden have used local employees - often the outsourced companies own ex-IT department which is purchased by the outsourcing company.

The cost savings are achieved by economies of scale - being part of a large company who's core business is IT instead of being an inefficient part of a company who's core business is something else and who aren't very good at IT.
The savings which are gained in this case are not huge (maybe a reduction in costs of 20% initially followed by 5-10% each year after that), but make an important difference to the clients.
The relationship with the client is necessarily close and they often work on site with the client.

This seems like fair game to me.

Off-shoring, on the other hand, is farming out this type of service to a low-cost country, and that will cause all the problems Mr. Boon mentions.

I suspect that in the very long term it will cause a "re-distribution of wealth" around the globe as these low-cost countries command progressively higher salaries and the high cost countries need to lower their salaries to compete.

Is there some other issue with outsourcing in the UK which I am missing?

[CSuarezdelReal]

The cost savings are achieved by economies of scale - being part of a large company who's core business is IT instead of being an inefficient part of a company who's core business is something else and who aren't very good at IT.
The savings which are gained in this case are not huge (maybe a reduction in costs of 20% initially followed by 5-10% each year after that), but make an important difference to the clients.

I do agree outsourcing is not a bad thing per se, in fact it could become a win-win game IF the internal specialist is not needed 100% of the time (so she/he is inefficient, but a necessity) AND the outsourced specialist would be working for MORE THAN one company.

Conversely, if the internal specialist is needed roughly 100% of the time, or the outsourced specialist works 100% of the time for a single company, I would suggest to insource. "IT is not a core business, so outsource it" looks like a myth to me. If IT is not the core business, there should be an evaluation of the overall environment to decide whether to outsource or not, but based on facts, not on clichés.

[Chris Martin]

"IT is not a core business, so outsource it" looks like a myth to me.

Absolutely - the only argument for outsourcing should be "Will it save me money and/or improve quality of my IT service deliveries".

Even if the answer to this is "yes" it needs to be done in the right way by a company who really understands the clients needs and puts forward a realistic proposal. The profit margins on outsourcing are far lower than the traditional IT/consulting business, so the company who makes the lowest bid may not be the right outsourcing partner in the long term.

[Mike Nicholson]

The cost savings are achieved by economies of scale - being part of a large company who's core business is IT instead of being an inefficient part of a company who's core business is something else and who aren't very good at IT.

Unfortunately a fair amount of the cost savings come from hiring back people to do their own job with a 10% pay cut. Good for the company and the outsourcing agency. Bit of p*ss take for the employees.

[Glenn Meyers]

Economies of scale.......bites.
McDonalds Corp is outsourcing the teenager in the drive-thru line at their hamburger stands.
For every 6 stores they claim they can save one employee. PLUS they claim that the customer is asked more of thier "push-this-special" kind of questions because the call center peole are better trained.
When will it end?

[twallis]

Watch and wait it will all turn around again as the world evens out.
It is just a matter of surviving for my life time the world moves faster
now days and we need to as well.