Stop Offshoring
Friday, September 09, 2005
Here are two older articles I found that talk about the negative side of offshoring:
Outsourcing Falling From Favor With World's Largest Organizations
What Companies Don't Know About Offshoring Can Hurt Them
Some quotes from the first article:
70 percent of participants have had significant negative experiences with outsourcing projects and are now exercising greater caution in approaching outsourcing. One in four participants have brought functions back in-house after realizing that they could be addressed more successfully and/or at a lower cost internally...
...instead of simplifying operations, many companies have found that outsourcing activities can introduce unexpected complexity, add cost and friction into the value chain, and require more senior management attention and deeper management skills than anticipated.
And some quotes from the second article:
"Even for companies that believe they exist solely to create value for shareholders, the social or sustainability implications of offshoring warrant considerable consideration, since, on a practical level, companies' reputations -- their brand, desirability as employer, and, therefore, their financial success -- are at stake," says Ton Heijmen, Senior Advisor to The Conference Board on Offshoring and Outsourcing.
In the home country, it is not only employees who are hurt through layoffs; suppliers lose business, communities lose tax revenues, and the local economy loses the multiplier effects of direct spending.
"Because many offshore destinations have only a rudimentary infrastructure and little or no environmental regulation, a sudden increase in business activity related to offshoring can often have a dramatic impact," says Heijmen.
