Good news for US and outsourcing

[samby]

http://www.cnn.com/2004/US/08/27/home.advantage/

I guess outsourcing isn't always the best option for companies, this is really good to see.

 

[avsrule]

Indeed. Thanks for posting.

 

[billwald]

Why is it good news?

 

[samby]

Why is it good news?

*The cost savings of outsourcing is less than what companies had thought it would be.


Not all companies would have to be regulated to do the right thing. Some are finding ways in which to keep American jobs in this country and keep their commitment to employees and communities.

Most U.S. multinationals that outsource, or ones that plan to do so, generally cite a 40 percent cost savings per exported American job as their main reason for doing so.

A New York state outsourcing study, says Howard Rubin, executive vice president of META Group, recently concluded that the actual savings figure is closer to 20 percent.

Sure, the labor itself may be cheap, but Rubin said the hidden costs that many companies ignore could level the playing field in a hurry. Costs like corporate planning and training, making the transition abroad, severance and layoff fees, travel, security and the chance of losing business from customer complaints can easily cut into those savings by more than half.

"The rush to Indian call centers was driven by cost," Rubin said. "It was a semi-robotic approach that was driven by people doing technical diagnosis...But the myth and reality are now crossing each other," he said. "Especially with things that require secure communications or severe risk management, suddenly a worker in India and a worker in Utica [New York] are at parity."

That parity is not only good for the corporate bottom line, but it could mean one more unemployed American back on the job. Quality and public relations concerns, political backlash and potential lost business already caused a few well-known companies to repatriate their call centers to America's small towns.

Dell recently brought a call center back from India after repeated customer complaints, planting itself in Twin Falls, Idaho. I can only hope this becomes the new trend in so-called corporate cost savings.

Other companies have either moved from bigger cities or simply set up call centers in small towns. U.S. Bank contemplated a move to India, but eventually decided to put the call center for its credit-card division in Coeur d'Alene, Idaho, a city of less than 40,000 with high unemployment. Also, financial services call centers from companies like American Express and Citi Cards, a division of Citigroup, have boosted the local economy of Guilford County, North Carolina.

 

[serendipity79]

Economically, outsourcing is great. the problem lies in employing the workers that used to do these jobs. However unfortunate that is, keep in mind that places like NY that used to be major manufacturing hubs still produce lots of money, the jobs are just different, technical and service types of jobs. business jobs, sales jobs. these jobs also pay more. outsourcing will eventually I believe work out for the better. as we outsource clothing and the such, we continue to manufacture extremely high tech chips for computers, planes, automobiles. So, even though we are no longer sewing sweaters, we now have plants that are making microchips forMRI machines, and networking computers for offices, and designing better functioning websites. so while it is unfortunate that a lot of our workers lose jobs, there still new jobs, many that pay much more.