Flying Blind with Outsourcing?

Eventually people will wake up to the fact that outsourcing = suicide.

If you don't watch what you're spending and why you're spending it, you're throwing money out the window. Would you buy a car and not know how much it costs to maintain it? Would you hire someone off the street and not care what he did for you or what his wages were? This attitude from the European companies doesn't make sense.

Companies that don't measure the impact of outsourcing don't deserve to survive. While the global financial crisis will or already has forced some weaker companies to fail, I fear that some of the negative impacts of outsourcing will get lost in a general explanation of the type "it's the downturn." I know people in the UK, for instance, who swear they will never buy Dell again due to the appalling after-sales service run from India. How is Dell measuring these lost future clients?

Somehow I am not surprised, cause if they actually measured anything after the fact, they might find out it's not helping their bottom lines at all. But they are going to do more, even if doesn't help them financially at all. Makes perfect sense. Business tends to follow each other like lemmings do. And like lemmings, they go over the cliff too.

And these are our leaders. A strategy without planning. Wow, does it get any better than that? And they are going to continue to do it, even if they don't know if it is cost effective. Why, because everyone else is doing it? If I was the CEO of these companies I would definitely want a study done. What is wrong with the CEOs and why didn't they demand a study before doing it??

Cheap labor -> Companies outsource -> US citizens lose job -> CEOs get big fat raise -> Outsourcing gets expensive over time -> CEO gets fired -> Still gets his golden parachute -> US Gov't does not care about reducing foreign work visas, which are the primary way these companies outsource.

You outsource things that you are either:

- Not a core competency (not good at)
- Not a strategic advantage

Too many companies are outsourcing their competitive advantage, or worse, outsourcing their core business components.

Too much outsourcing is being done because it is a fad and not a business plan. This article demonstrates clearly that there is frequently no business plan with measureable results associated with it.

Sam - Outsourcing is more like "Sam can buy a DVD Player for $50 rather than $1,000."

People who use the term "cheap labor" are themselves cheap! It's like blaming someone else for your own problems. And it's even foolish to think that you are smarter than all of your CEOs.

It's globalization dude!

In India all big brands have setup shop. Why is that?

It's not about cheap labor...

Those outside companies have great sales folks that claim much more than what is really offered. I know: our deparment was co-sourced. Reduced cost by 25% but decreased our labor force by 50%. Less output and less value.

Don't put your humman resource in other hands like outsourcing. And don't forget it.

Outsourcing leverages the best of the brains from all over the world. 40-50% of top business and technology acumen of the world is in India, China and Japan - why not leverage it?

If the CEOs do not know how much they are spending on outsourcing, it is a shame. There are proven and successful models of outsourcing that every aspect of organized business can benefit from.

These European CEOs better get their act straight, lest stockholders demand better management from Asia.