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Outsourcing crises





burqe
Hello every body,

Being a tech guy and in the feild of IT for so many years, I have seen uplifts and downfalls so often. You know that software out sourceing got common to india, china, ukrane and pakistan in the previous few years. But the industry is now facing a crises as more and more people are employed by big IT companies in US ans europe and costs in these coutries are steadily increasing. As a confirmation to this, TCS, the india's largest out sourcing service provider is transferring 5000 jobs to maxico.

Regards
Haris Mushtaq
crdowner
My company has outsourced to developers in Mexico and part of its help desk to the Philippines. I understand the reasons business outsource - mainly to save money. What I hate is calling a support line and getting a person who can barely speak English or whose accent is so heavy that understanding their English is difficult at best.
viraj
Hi!

Outsourcing is great. Its cheap. Its generating jobs. But, I doubt they level of technical expertise it creates to the ppl where it is implemented.

I feel oursourcing is a easy way to make money. This is what the young gen thinks and many grads are already into call centers in countries like India, Pakistan, China... But are we not wasting our intelect capital in silly stuffs like support. Why not make softwares/hardwares more tollerent and more intellegent. And why not make the ppl using them well aware to use them. I feel training is better option than outsourcing.

This is waste of time and resources.

Viraj
gscs
many reason for a company to look for outsourcing. of course, cost saving might be the bigger issue . rather than invest a lot of money for equiptment, product, people, a company looking for outsource . so , they can fully concentrate on their marketing strategy to boots their sales.

some don't have the expertise and knowledge, rather than taking risk , just hand-over to the expert to do so.

outsourcing is happen in almost every kind of business.
i guess i'm right? Wink
iresc
True, outsourcing is every where. At home we outsouce chore by getting the kids to take out the trash instead us doing it. The kids get allowances.

Laughing
fx-trading-education
iresc wrote:
True, outsourcing is every where. At home we outsouce chore by getting the kids to take out the trash instead us doing it. The kids get allowances.

Laughing


Do you really mean that you pay your kids for taking out the trash? or is the allowance a general one?

Anyway for me outsourcing means also that it is done far away in another country. It is not like simple subcontracting.
With your kids I would rather call that subcontracting, but I am not a native English speaker so I may be mistaken.
bogger
Outsourcing is merely the capitilistic way for countries to be forced to be more competitive. While certain countries lose a lot of jobs and complain about it, but don't do anything else, Germany has managed to avoid the worst effects of outsourcing by agreeing to cut pay and to work longer hours
fx-trading-education
bogger wrote:
Germany has managed to avoid the worst effects of outsourcing by agreeing to cut pay and to work longer hours


And if they would reinstore slavery (more cut pay and even longer hours) there will not be outsourcing at all !
iresc
good point. subcontracting vs outsourcing.
Out sourcing is across national border.
Subcontrating is job given to another local company/firm or a multinationals within its borders.
Correct?
viraj
A record appreciation of the Indian rupee in the forex market by 3.8 percent dampening IT outsourcing margins ...


A record appreciation of the Indian rupee in the forex market by 3.8 percent has impacted the operating margins of Infosys Technologies Ltd by two percent during the third quarter (Oct-Dec) of the current fiscal (FY 2007), a top company official said here on Friday.

"In spite of taking forward cover and hedging $373 million during the quarter under review, the rupee appreciated to Rs.44.53 from Rs.46.29 and impacted our operating margins by 200 base points (two percent) and led to a revenue loss of Rs.1.45 billion," Infosys chief financial officer V Balakrishnan told IANS at a review of the company's financial performance in the third quarter. In view of the continued volatility in the forex market, the company has hedged $360 million for the current quarter (Jan-March), pegging the dollar at Rs.44.11 as against Rs.45.40 in the previous quarter. "Higher revenue productivity and increased license fee by 80 basis points and cost-cutting in selling/marketing and general/administrative expenses by 50 basis points have enabled us to minimize the impact of a strong rupee on our operating margins," said Infosys CEO and Managing Director Nandan M. Nilekani.
fx-trading-education
viraj wrote:
A record appreciation of the Indian rupee in the forex market by 3.8 percent dampening IT outsourcing margins ...


A record appreciation of the Indian rupee in the forex market by 3.8 percent has impacted the operating margins of Infosys Technologies Ltd by two percent during the third quarter (Oct-Dec) of the current fiscal (FY 2007), a top company official said here on Friday.

"In spite of taking forward cover and hedging $373 million during the quarter under review, the rupee appreciated to Rs.44.53 from Rs.46.29 and impacted our operating margins by 200 base points (two percent) and led to a revenue loss of Rs.1.45 billion," Infosys chief financial officer V Balakrishnan told IANS at a review of the company's financial performance in the third quarter. In view of the continued volatility in the forex market, the company has hedged $360 million for the current quarter (Jan-March), pegging the dollar at Rs.44.11 as against Rs.45.40 in the previous quarter. "Higher revenue productivity and increased license fee by 80 basis points and cost-cutting in selling/marketing and general/administrative expenses by 50 basis points have enabled us to minimize the impact of a strong rupee on our operating margins," said Infosys CEO and Managing Director Nandan M. Nilekani.


Anyway the USD is going so low that soon one of the best country to outsource and to go for having cheap holidays will be USA.
LumberJack
It is bound to happen, how that countries are opening their borders and companies are becoming more global. There are many jobs being created in North America still. You just have to be in the right industry unfortunately.
edzofcit
Outsourcing is good. It helps people to be competitive and helps the companies save money too. It also give other races a chance to show that they can do what other advance races can. It maybe in an IT field or in Call Center, it helps poor Nations people and keeps them alive. Laughing
TomGrey
Outsourcing is fine for the US -- lower cost products, and fine for the poor workers in the poor countries.

The US "high labor costs" relative to India go down whenever the USD goes down, so the pressure for companies to find lower cost workers goes down a bit.

But whether it's sub-contracting or outsourcing, more specialization in working is generally good for the vast majority of workers.

Free trade is both the most moral, and the most economically efficient system, as well as the one that is most sustainable in helping poor people reduce their own poverty.
viraj
What will be the credibility of outsourcing. What if the country stops support and become reluctant when you have already outsourced most part of your business there.

There are risks involved and this is just like becoming dependent on others. Is this what outsourcing all about?
sopetite
If you're creative enough you should not get affected with the huge outsourcing of industries nowadays
fx-trading-education
viraj wrote:
What will be the credibility of outsourcing. What if the country stops support and become reluctant when you have already outsourced most part of your business there.

There are risks involved and this is just like becoming dependent on others. Is this what outsourcing all about?


I agree with you that it is risky.
In the country that is outsourcing will only remain what is not "outsourcable", like services where you need proximity.
And all production will be done somewhere else including vital thinks like food and energy.

For the moment this risk has been mitigated because the outsourcing countries are the richest and the most armed. Then for instance if a league of provider countries would refuse to sell energy or food (enough countries that it creates a big trouble) then there will be a military action to take control of these countries. (As we have all seen it happened even for single countries as long as they are strategic for oil)
johnBdoe
Outsourcing could be a double-edged sword for a corporation. If it is not managed well, the quality of services or products will deteriorate and existing customers will go to competitors. On the other hand if it is done well, it could save a corporation millions of dollars.

In this case, it really depends on which end you are in. If you are in the receiving end like the mexican, you won't be saying it is a crisis. Outsourcing is just a normal globalization process where giant corporations try to make the most profits out of their business.
fx-trading-education
johnBdoe wrote:
Outsourcing could be a double-edged sword for a corporation. If it is not managed well, the quality of services or products will deteriorate and existing customers will go to competitors. On the other hand if it is done well, it could save a corporation millions of dollars.

In this case, it really depends on which end you are in. If you are in the receiving end like the mexican, you won't be saying it is a crisis. Outsourcing is just a normal globalization process where giant corporations try to make the most profits out of their business.


I would say that for the receiving end it is good but just up to a certain point. The companies will be interested only as long as the cost remains low (meaning the people remain poor). So it will at the beginning improve the conditions for the workers of the "poor country" but it should anyway stabilize at a low level because otherwise the company will switch to another country.
So the benefit is mainly for the company,at the condition that the outsourcing is done correctly. I also have noticed that even if it is not done correctly the companies are anyway mainly focused on the short term advantage (less costs) and ignore the long term damage (low quality, worst support ...) until it is too late.
icecool
fx-trading-education wrote:
bogger wrote:
Germany has managed to avoid the worst effects of outsourcing by agreeing to cut pay and to work longer hours


And if they would reinstore slavery (more cut pay and even longer hours) there will not be outsourcing at all !


outsourcing is the new slavery. it's just now easier to bring the work to the cheap labor force than the other way round. here in africa it's also sometimes called development help by the west, part of the money comes as loans which we have to work even harder to be able to pay back.
catch 22 or what?

cheers
bogger
Capitalism is merely screwing others legally.
It has never been, and will never be fair...

fx-trading-education wrote:
bogger wrote:
Germany has managed to avoid the worst effects of outsourcing by agreeing to cut pay and to work longer hours


And if they would reinstore slavery (more cut pay and even longer hours) there will not be outsourcing at all !


you seem to say that a little bit of something is bad because a lot of it is bad, fx-trading-education. Using your same rationalisation, water is bad, because it can kill if taken in excessive quantities. I never said to stop paying them completely, I merely said that they agreed to lower their pay rate so as to reduce the risk of being payless.

High risk means higher pay. They lowered the risk for lower pay
tony
ya; outsourcing has changed the face of world economics. suddenly, instead of independent economies, the country which has been the world's only superpower since the cold war is now dependent on less expensive labour in asia (and oil in the middle east).

how about that? the eu, imo the up-and-comping second superpower, is now facing some of the same problems.

and so how? i believe in the end, india and china may have some upperhand; as well as the middle east.
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