posted on Jun, 9 2011 @ 02:37 PM
reply to post by Niall197
Its got nothing to do with the decline of any nation. It is a trend that has been going on for some time and is based purely on economics.
The days when you could source work to pennys on the dollar to India are long gone. A thorough analysis would show that you save at best 15% in
India. Coupled with the marginal savings are the soft costs of lost productivity and poor service. With respect to any activity where a company
specific knowledge or human interaction is critical, off-shoring those functions has simply shown not be be very effective. For example, turnover is
extremely high in India, making knowledge transfer and the resulting disruption of service an issue. The countries that are moving ahead in the
off-shoring markets are Poland, Vietnam, Cambodia and to a lesser extent, China.
There are many communities in the US with well educated workers that can provide a better service and international firms have been building out call
and operations centers in places like West Virginia for a long time. Economics also comes into play with government contracts. The government can
certainly outsource, but it can't off-shore. How does an Indian company secure a fat state government contract? They buy some real estate in that
state and perform the work with in-state workers.
Its labor arbitrauge, same as it always was.
The cheapest and most effective method of outsourcing is without question off-shoring the high end, commoditized engineering work and in-shoring the
human interface components.