Outsourcing Times

Here’s An Alternative To Offshoring

By Priya Jestin, Staff Writer

Imagine a situation ten years down the line, where there is a huge backlash against jobs being moved offshore, whether to India or any other location. This could lead to many American companies deciding to retain their work in-house or within the United States, for fear of rebuke from customers or stakeholders. What happens to the outsourcing industry then?

According to experts, the offshoring trend cannot stop, but it will definitely slow down. Since the demand will slow down, wages will remain under control. This means India will still be able to retain its cost advantage and will still be the global leader in outsourcing. American companies which may no longer be able to outsource, may look to employ qualified people from other countries including India.

This could lead to large-scale immigrations of qualified people from India, China, Phillipines, and other countries to the United States. Now this makes me wonder. Which is the lesser of the two evils: Sending our jobs out of the country or getting outsiders into the country to do our jobs?

Indulging In The Politics Of Offshoring

By Priya Jestin, Staff Writer

Guess what’s one of the hottest issues in the current presidential campaign? Offshoring jobs of course. While John Kerry plays to the masses by blaming President Bush for massive job losses, he seems to have forgotten that in 1993 as Senator, he voted to implement the North American Free Trade Act (NAFTA). So, way back then, Kerry knew jobs would be lost. Interestingly in 1993 alone, Senate had reports that thousands of manufacturing jobs would be lost. Job loss estimates ranged from 22,500 to 912,000.

What people like Kerry forget in their game of politics is that a slew of new jobs has been created since NAFTA's implementation. According to Economic Policy Institute, NAFTA resulted in exports that created 794,194 new jobs. Overall, the political economy has only helped create more jobs than lost.

But, for a moment let’s assume that Kerry and his ilk succeed in restricting offshoring jobs. What happens then? The offshoring phenomenon has helped boost the economies of many countries; people in these lands now have the money and access to American goods. Through this they invest in the American economy. So if we restrict job offshoring, we’ll effectively be reducing OUR revenues and our jobs. So, what’s the better option?

Public Outcry Against IU Outsourcing Decision

By Priya Jestin, Staff Writer

The idea of outsourcing doesn’t seem to have gone down well with legislators in Indiana. Three state lawmakers recently urged Indiana University administrators not to outsource some school operations, as they felt that the move would harm the region's economy.

Democratic Reps. Matt Pierce and Peggy Welch, of Bloomington, and Sen. Vi Simpson, D-Ellettsville, are joining a growing tribe of dissenters in Monroe County and Bloomington in voicing opposition to the proposal. Their contention is that outsourcing will suppress wage and benefit growth in the region.

So what is it that is irritating residents of these counties? University administrators are considering plans to hire private companies for operations such as campus bookstores, food services and printing services. This proposal is sure to affect jobs at all IU campuses. Wonder if all this is the proverbial storm in the teacup.

Outsourcing As A Slur

I knew outsourcing was a touchy subject with most Americans. But I didn’t expect it to sound like a slur for some. What else do you make of a Michigan company that recently asked U.S. Sen. Debbie Stabenow to retract her statements that it outsourced jobs overseas?

Last week, Jackson National Life Insurance Co. sent a letter to Stabenow asking her to apologize for stating that the company outsourced jobs to India and China. She is said to have made this comment during a campaign TV commercial and public talks. Not one to retract on her word, the Stabenow campaign still stands by its statements.

Stabenow is supposed to have said that her Republican opponent, Mike Bouchard, supports Bush administration policies. She claims that these policies have led to the outsourcing of Michigan jobs. Company president Clark Manning Jr. wrote to Stabenow saying that she “falsely denigrating the excellent organization they have worked to create." Wow! Now what do you make of that?

Any company that wishes to improve its profits and thereby shareholders’ revenues will look for means to reduce costs. I’m not commenting on the present situation but I think it’s high time we behaved like we mature people. Yes, it is a bit difficult to think about that when you are the person losing a job. But then throughout history, there’ve been upheavals, which may have seemed unbearable at that point. However, these events always led to something good. So also is the case with outsourcing.

Walter Reed Outsourcing Blocked

Recently, a bill was produced in the Senate that sought to block spending on a contract for operations support services at Walter Reed. However, the bill fell through in the Senate. The House already passed language to keep the Army from moving forward with a plan to transfer work that is being done at Walter Reed. Had the Senate passed the bill, all the spending on the contract would have been blocked. However, it would not have prevented the Army from carrying out a new public-private competition for the same work.

Read my previous post titled "Outsourcing Tips for Small Businesses" to get outsourcing tips for small businesses.

Employees in Los Angeles Protest against Outsourcing

Recently, I had written a post titled "Did Outsourcing Raise Level of Wages? where I mentioned about the impact of outsourcing on wages. It seems that the debate has been intensified. Thousands of county employees gathered outside the Kenneth Hahn Hall of Administration to protest against low wages and outsourcing of work. They believe that outsourcing has affected their wage structure.

Members of Service Employees International Union Local 660 marched up and down Temple Street with slogans and posters. The union represents about 46,000 county employees. The union's contract is set to expire at the end of the month. However, the employees expect that both sides will agree to a new contract before the expiry of existing contract.

Shocking News: Terror Outsourcing

Several countries including India have been the victims of terrorism. The recent serial bomb blasts in Mumbai have unmasked the ugly face of terror in India. According to sources, terrorists have now adopted a new strategy in the form of terror outsourcing. They have adopted this tactics to leave the security personnel guessing about their moves. The major terrorist organizations are now outsourcing the terror task, according to Indian intelligence sources. Such organizations pick up highly motivated boys and provide them training and other support to carry out the operations. They boys work for a specific price.

Wireless interception aftermath Mumbai serial blasts have indicated that operatives of these blasts were not dedicated members of any organizations. The intelligence sources also revealed that most terrorist attacks in the recent days were performed by operatives who were paid by the terrorist organizations. This is a dangerous trend, as it is not easy for the security agencies to check such activities. Security agencies generally keep a tab on the activities of the militant organizations. However, they have succeeded in fooling the security agencies by outsourcing their tasks.

The Statesman reports that -

Intelligence inputs reaching here reveal that terrorist organisations pick up “hardliner, alienated Muslim boys” in the age group of 18 to 26, impart them training and then ask them to do “any terror operation of their choice” and pay them accordingly, said a senior intelligence official.

Australian Federal Government's Outsourcing Deal with CSC

The Department of Immigration and Multicultural Affairs (DIMA) and the Australian Electoral commission (AEC) have extended their outsourcing contracts with Computer Sciences Corporation (CSC). The extended contracts will be worth $112 million. DIMA will extend mainframe and mid-range support for the Border Critical Infrastructure (BCI) and related project work for an additional two years. The original contracts with DIMA and the AEC were signed in 1998 for a three years period. In 2002, it was extended for another four years. CSC provides mainframe services to the AEC. The original contract was the part of the federal government's Cluster 3 outsourcing contracts.

According to Computer World -

Cluster 3 relates to the first group of federal government agencies undertaking IT infrastructure outsourcing, announced in July 1997. The agencies include the Department of Immigration and Multicultural Affairs, The Australian Securities Commission, The Australian Electoral Commission and The Australian Industrial Property Organization.

Bush gives green signal for outsourcing

The visit of President George Bush to India was significant for the outsourcing industry  as outsourcing has been a concern across various segments of the population of both countries. President George Bush faced this issue head-on and stated that outsourcing is a result of globalization and should be seen as an opportunity rather than a threat. However, he did not give the disadvantages a go-by and admitted that outsourcing results in job losses.

The MBA from Harvard further stated that outsourcing is in it's infancy and the huge middle class segment of India cannot be ignored. President Bush has given his best to manage the attitude towards outsourcing in both US and India and stated that his re-election was a testimony of his polices. Chron.com reports:

"The classic opportunity for our American farmers and entrepreneurs and small businesses to understand is there is a 300 million-person market of middle class citizens here in India," Bush said Friday during a discussion with young entrepreneurs at a business school in Hyderabad.

Declaration mandatory for outsourcing outside Colorado

The state of Colorado has brought in a bill that makes it mandatory for any private business seeking contracts from the state government to declare whether any of the business processes involved will require outsourcing to any other state or country prior to the actual commencement of the work.

After a contract is accepted, if is felt that it is necessary to move some of the work process outside the state, the contractor is required to explain to the state the need for such outsourcing. The bill is being introduced by Denver Democratic Sen. Peter Groff, who is heading the Interim Committee of the Legislature to examine the process of government purchasing and contracting practices. The move is not to impose any ban on outsourcing, but to ensure clarity in state expenses. LongmontFYI reports:

Aurora Democratic Sen. Stephanie Takis is also working on an outsourcing measure, which she said she will probably revise and may introduce as a non-committee bill next year. Takis’ draft proposal would require the state Office of Economic Development and the International Trade Office to prepare annual reports estimating the net number of jobs lost in Colorado during the previous year — and the estimated money lost to the state’s economy — as the result of outsourcing and offshoring.