Outsourcing Losing Its Luster - India loosing massive jobs!
GeekBoy
over to one of the big outsourcing suppliers
IT workers can breathe a little easier. Chances are diminishing that your
CEO will walk in tomorrow and decide to ship your job overseas or hand it
over to one of the big outsourcing suppliers.
TPI, a British management consulting firm, determined that the global
outsourcing market has experienced a slowdown starting at the beginning of
the 2007. The total value of worldwide outsourcing contracts awarded during
this time dropped by 17 per cent compared to 2006 numbers and represents the
smallest number of awards in the first three quarters of any year since
2001.
Looking inside these numbers, one finds that the slowdown is attributed
almost solely to changes among US companies. TPI found a 53 percent
reduction in the value of major contracts in the US from 2006 to 2007. Wow!
So what is causing the precipitous drop?
No More Cheap Labor
Let's begin with the reasons why companies started to turn to outsourcing,
which boomed during the dotcom rise. Cheaper labor was one of the reasons
why corporations opted for outsourcing services. At the time, salaries were
rising along with dotcom stocks. Since then, there has been an adjustment,
so paychecks are no longer totally whacked.
In addition, outsourcing has made the labor pool in other countries more
expensive. India is one area where many jobs have been sent. As a result the
country now finds itself with a growing number of middle class citizens who
want to be paid. Also the rupee, India's currency, has been gaining
strength: trading at about 46 rupee for every dollar now, compared to 41 for
every dollar a year ago.
Such changes are important because observers estimate that three out of
every five US outsourcing contracts involve some kind of offshore activity.
The Hidden Costs
In addition, companies have determined that the cheap foreign labor often
comes with hidden costs, mainly centering on overcoming cultural barriers.
The challenges begin with instituting simple business processes. Then there
are different legal statutes in various countries that companies need to
comply with.
Add to these difficulties the logistical challenges of offshoring.
Coordinating work among employees spread across a dozen different time zones
is more troublesome than making an allowance from the East Coast to the West
Coast. Also an Indian employee may call the home office on July 4th and be
surprised that no one is answering the phone.
The Trucker
> Chances are diminishing that your CEO will ship your job overseas or hand it
> over to one of the big outsourcing suppliers
The dollar is declining in value and the Indians cost a lot more then they
did.
> IT workers can breathe a little easier. Chances are diminishing that your
> CEO will walk in tomorrow and decide to ship your job overseas or hand it
> over to one of the big outsourcing suppliers.
We will also note that the H1B visa quotas have been cut very seriously
and that this was SUPPOSE to make the employers ship your job overseas as
opposed to hiring "guest workers". --- So much for that scare tactic.
> TPI, a British management consulting firm, determined that the global
> outsourcing market has experienced a slowdown starting at the beginning of
> the 2007. The total value of worldwide outsourcing contracts awarded during
> this time dropped by 17 per cent compared to 2006 numbers and represents the
> smallest number of awards in the first three quarters of any year since
> 2001.
Thing are getting thinner..... The Indians are starting to get uppity.
> Looking inside these numbers, one finds that the slowdown is attributed
> almost solely to changes among US companies. TPI found a 53 percent
> reduction in the value of major contracts in the US from 2006 to 2007. Wow!
> So what is causing the precipitous drop?
>
> No More Cheap Labor
> Let's begin with the reasons why companies started to turn to outsourcing,
> which boomed during the dotcom rise. Cheaper labor was one of the reasons
> why corporations opted for outsourcing services. At the time, salaries were
> rising along with dotcom stocks. Since then, there has been an adjustment,
> so paychecks are no longer totally whacked.
Yes.... The American high tech worker is no longer making decent wages.
Only financial people, insurance people, and real estate people were doing
any good.
> In addition, outsourcing has made the labor pool in other countries more
> expensive. India is one area where many jobs have been sent. As a result the
> country now finds itself with a growing number of middle class citizens who
> want to be paid.
Bingo! And good on em.
> Also the rupee, India's currency, has been gaining
> strength: trading at about 46 rupee for every dollar now, compared to 41 for
> every dollar a year ago.
http://www.newindpress.com/Column.asp?ID=IE620060612145000&P=old
We be on the awl standard, Bub. And, BTW, if the dollar costs 46 R as
opposed to 41 then the R's are getting weaker. (takes more of em to buy a
dollar). But the problem is and had been the central banks and
their crap. An this notion that the USA will _OWN_ all the oil in the
middle east.
> Such changes are important because observers estimate that three out of
> every five US outsourcing contracts involve some kind of offshore activity.
H1B visas, sir.... H1B visas.
> The Hidden Costs
> In addition, companies have determined that the cheap foreign labor often
> comes with hidden costs, mainly centering on overcoming cultural barriers.
> The challenges begin with instituting simple business processes. Then there
> are different legal statutes in various countries that companies need to
> comply with.
>
> Add to these difficulties the logistical challenges of offshoring.
> Coordinating work among employees spread across a dozen different time zones
> is more troublesome than making an allowance from the East Coast to the West
> Coast. Also an Indian employee may call the home office on July 4th and be
> surprised that no one is answering the phone.
Ya can't spend money on imperialism without any taxes and create loans to
buy hoola hoops from China and expect the Chinese and the rest to pay more
for oil than they would otherwise. It's the oil, stupid. The dollars are
tokens used for oil purchases. If that changes and the oil owners start
taking Euros then there is gonna a be a lot of worthless tokens all
around the world and it is all over for the outsourcing. Will the Indian
and Chinese economies survive without exporting to the USA? If not now
then sometime much sooner than the Republicans would have us believe. The
real Americans have nothing to fear. Nor do the real Indians or the real
Chinese. But the strutting pigs in all these places may have a tough time.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
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