Tuesday, April 19, 2005

Outsourcing: time to pay the piper?

I’ve written on outsourcing before.

Outsourcing is always a hot topic amount IT professionals because it has to do with their job security. Since I became a software person, I’ve thought that the outsourcing will probably not continue indefinitely. Eventually the costs will rise high enough that it won’t be cost effective.

This article provides some survey facts from Deloitte and Touche about recent outsourcing data:
"-- 70 percent of participants have had negative experiences with outsourcing.
-- One in four respondents realized that they could handle certain functions better in-house, and yanked those back inside the corporate walls.
-- 44 percent did not see cost-savings from outsourcing.
-- 57 percent ended up absorbing costs that they believed were included in the contracts with vendors.
-- Nearly 50 percent cited hidden costs as the biggest problem"

Please forgive me for my next extremely pro-American comment, but it seems like this shows that globalization is not always a good thing. For some of the companies that jumped on the bandwagon, it is time to pay the piper.


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