Offshore Outsourcing — Good or Evil? Clothing, toys and shoes are manufactured overseas. So why not make software there too, where labor is cheaper?

What is Outsourcing? IT Outsourcing In the first sense, “IT outsourcing” means hiring somebody outside your company to provide IT services. Outsourcing is most common for companies whose IT needs are well known in advance. IT outsourcing can also mean hiring someone to be your IT department. Such a partner must have people who can work closely with your staff to understand your unique business problems so that you can deliver, implement, and service unique solutions. Offshore Outsourcing of software is simply software development at another location, a facility connected with the client’s location using high-speed data communication links to allow engineers and managers to communicate on a real-time basis. Clients on the other side of the globe can monitor developments and project milestones on an up-to-the-minute basis, ensuring both quality and progress. Two kinds of outsourcing IT Outsourcing IT Outsourcing Offshore Outsourcing Offshore Outsourcing

Top Five Tactical Reason For Outsourcing One Time Applications Reduce Or Control Operating Cost Make Capital Funds Available Generate A Cash Infusion Secure Resources Not Available Internally

Top Five Strategic Reasons For offshore Outsourcing Improve Business Focus Gain Access To World Class Capabilities Accelerate Reengineering Benefits Share Risks Redirect IS Resources To More Strategic Activities

Reasons for offshore outsourcing Offshore Outsourcing has proved to be a differentiating factor for companies, offering cost, time and quality advantages. Today, it is common practice to look to distant shores for: Offshore outsourcing is a high-gain - high-risk proposition, powerful and perilous. The elusive key to a successful offshore venture resides in a twelve-letter word - relationship. Offshore outsourcing development is as much about technical skills and quality as it is about a relationship based on compatibility, trust and mutual respect. 1. Expertise in latest technology 2. Rapid deployment 3. Lowered Costs

Companies outsourcing offshore Oracle Microsoft Boeing Prudential American Express Franklin Mint IBM Exxon Mobil Ernst & Young Reuters Office Depot Northwest Airlines Amazon Intel Kaiser Permanente America Online and Aetna. There are many familiar names among companies that outsource and offshore, across a wide range of industries: Some of the big recruiting companies in India

Why India? large numbers of highly trained software and hardware engineers by lower development costs High volume of English speaking population American technology companies are increasingly shifting part of their research efforts to India

How India Became a Global Force According to JOHN RIBEIRO India’s popularity as an outsourcing hotspot didn’t happen by chance Indian professionals, venture capitalists and entrepreneurs of Indian origin helped promote India as an outsourcing destination, according to a study conducted for the World Bank Institute in Washington, D.C., by Evalueserve, a business intelligence and research firm The decision to outsource to India comes from “India's reputation as a location for low-cost and quality services that companies like GE helped build,” Gurbaxani says

Kinds of jobs that are going offshore Technical Support Call centers Software Hardware Computer programming

Prosperity has it’s perils In a recent survey by India’s Dataquest Magazine, 40% said that they have suffered from sleep disorders 34% have complained of digestive problems Night shift depression is on the rise at call centers Time Magazine, March 1, 2004

Can offshoring of jobs be stopped? Legally there is no way any of us can stop the jobs from being offshored “A recent survey of 145 U.S. companies by consultant Forrester Research found that 88 percent of the firms that look overseas for services claimed to get better value for their money offshore than from U.S. providers, while 71 percent said offshore workers did better quality work.”

Can offshoring of jobs be stopped? According to News Forge magazine’s business section, dated December 06, Struggle: “many people who have lost high IT industry paychecks and are struggling financially because their jobs are now being done in lower-cost countries. But none of the legal remedies currently proposed are going to stop this problem – assuming it really is a problem in the long run. Solution: “Your next “IT job” may be in an industry you didn't even think about a few years ago. It may be in a place you never thought of as an “IT mecca.” But if you have solid skills, whether as an entry level programmer or sysadmin or as a top-level IT manager or CIO, some company out there almost certainly needs someone just like you. The trick is finding that company” by Robin ‘Roblimo’ Miller 243Robin ‘Roblimo’ Miller 243

Is it going to change? No, probably not In the long run... John Maynard Keynes, an economist says, “perhaps spreading the IT industry worldwide will raise living standards everywhere, and make us all better off. This is a moralist’s approach to the concept of exporting jobs.” /08/27/132243

Can Americans Learn To Love outsourcing? Outsourcing has become the essential element of corporate strategy, even for small/start up companies This move will help our companies and it’s resources to concentrate on product development – be a designer To come up with innovative ideas Travel to different countries, and learn other cultures

The End Thank you Vimala