Outsourcing is nothing new, but recent outsourcing is different, both in the nature of the activities we're outsourcing, and where the sources are. No longer do we outsource only manufacturing; no longer are the source countries all industrial powerhouses. Today we're outsourcing thought work, too, and the source countries — India, the countries of the former Soviet Union, and Eastern Europe, for the most part — have large numbers of people who can think.
Outsourcing now threatens the jobs of engineers, scientists, doctors, technicians, and decision-makers — people who are much closer in demographic type to the people who make the outsourcing decision. As decision makers, we're now outsourcing the jobs of one another's friends and relatives.
Since what we're doing might have a direct and negative impact on our lives, it pays to examine it more closely than most of us have done so far. Here are just a few issues that any outsourcing plan should address.
- Bright flight
- People whose jobs haven't been outsourced might believe that they haven't been outsourced yet. Since the brightest of these always have alternatives, they might depart preemptively, and you could end up losing people whose jobs you had no intention of eliminating. Retention costs money, and losing good people costs even more. How much?
- Uncontrolled transfer of insights
- If your supplier develops an innovation or acquires an insight, will you ever become aware of it? Can that innovation or insight propagate to your competitors? If it did, in violation of your contract, how would you know?
- Routine miscommunications
- Outsourcing now threatens
the jobs of those
in the same demographic
as the decision-makers
- Cultural and language differences, and less effective person-to-person relationships, can lead to increased incidence of miscommunications. Although both parties to a communication might feel that they understand, they often have strikingly different understandings. Colossal errors are possible. How often will they happen? How much will they cost?
- Healthy in-house teams can deliver results more quickly than outside vendors can. For instance, when the vendor resides in a time zone 10 to 12 hours away, a typical round trip communication by voicemail or email can take a day or more. What's the cost of these and the dozens of other similar delay phenomena? What's the cost of a six-month extension of time-to-market?
- Forced "progress"
- Suppliers provide lower prices not only through lower wages, but also by spreading costs across multiple clients. As they gather more clients, the heterogeneity of their client base increases. Unless the supplier can encourage technology homogeneity among its clients, sharing costs becomes more difficult. Could you be compelled to upgrade systems against your will? What would be the cost of forced progress?
Failing to include all costs in your financial projections can lead to performance below what you've promised. And then your employer might encourage you to consider outsourcing not only your friends and relatives, but yourself. Top Next Issue
Are your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!
Much is available in the business press about outsourcing and offshoring. A recent accessible example is by Scott Thurm: "Lesson in India: Not Every Job Translates Overseas," The Wall Street Journal, March 3, 2004, p A1.
For an overview of some novel retention tactics, see "Retention," Point Lookout for February 7, 2007.
Your comments are welcomeWould you like to see your comments posted here? rbrencOJwALHJhehTLDsyner@ChacPFVSoGVjWrVHOiZyoCanyon.comSend me your comments by email, or by Web form.
About Point Lookout
Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.
Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.
Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.
More articles on Organizational Change:
- Now We're in Chaos
- Among models of Change, the Satir Change Model has been especially useful for me. It describes how people
and systems respond to change, and handles well situations like the one that affected us all on September
- On Beginnings
- A new year has begun, and I'm contemplating beginnings. Beginnings can inspire, and sometimes lead to
letdown when our hopes or expectations aren't met. How can we handle beginnings more powerfully?
- Definitions of Insanity
- When leaders try to motivate organizational change, they often resort to clever sloganeering. One of
the most commonly used slogans is a definition of insanity. Unfortunately, that definition doesn't pass
the sanity test.
- Letting Go of the Status Quo: the Debate
- Before we can change, we must want to change, or at least accept that we must change. And somewhere
in there, we must let go of some part of what is now in place — the status quo. In organizations,
the decision to let go involves debate.
- The Passion-Professionalism Paradox
- Changing the direction of a group or a company requires passion and professionalism, two attributes
often in tension. Here's one possible way to resolve that tension.
Forthcoming issues of Point Lookout
- Coming February 27: Brainstorming and Speedstorming: II
- Recent research into the effectiveness of brainstorming has raised some questions. Motivated to examine alternatives, I ran into speedstorming. Here's Part II of an exploration of the properties of speedstorming. Available here and by RSS on February 27.
- And on March 6: A Pain Scale for Meetings
- Most meetings could be shorter, less frequent, and more productive than they are. Part of the problem is that we don't realize how much we do to get in our own way. If we track the incidents of dysfunctional activity, we can use the data to spot trends and take corrective action. Available here and by RSS on March 6.
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenQwODPcPUPMsFjIyEner@ChacOyjNzcvZLCzMWrDvoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.
Get the ebook!
Past issues of Point Lookout are available in six ebooks:
- Get 2001-2 in Geese Don't Land on Twigs (PDF, USD 11.95)
- Get 2003-4 in Why Dogs Wag (PDF, USD 11.95)
- Get 2005-6 in Loopy Things We Do (PDF, USD 11.95)
- Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, USD 11.95)
- Get 2009-10 in The Questions Not Asked (PDF, USD 11.95)
- Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, USD 28.99)
Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info
- The Power Affect: How We Express Our Personal Power
- Many people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.
- Your stuff is brilliant! Thank you!
- You and Scott Adams both secretly work here, right?
- I really enjoy my weekly newsletters. I appreciate the quick read.
- A sort of Dr. Phil for Management!
- …extremely accurate, inspiring and applicable to day-to-day … invaluable.