The relentless offshore challenge

Thursday, March 31, 2005

Here's a good article on the next wave of "offshoring". In a global economy, there is no place to hide. Read more.

My own view is that this article falls into the trap of over-estimating the short-term impact, while not exploring the profound long term implications.

I started out in economic development after serving as a corporate consultant in the early 1980's...during the first wave of outsourcing. Companies have a tendency of focusing only on cost factors when they outsource. Comparing labor costs is easy. They do not have the accounting systems established that enable them to capture the full systems costs.

So for example, on paper you can see how software engineers in India beat software engineers in New York every time. But outsourcing also carries hidden costs and increased risks that accounting systems rarely reveal.

posted by Ed Morrison |

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