The Truth About Outsourcing and Offshoring

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The Truth About Outsourcing and Offshoring
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Outsourcing and off-shoring  can have long-term repercussions for your company. In this article we cover the 10 myths of outsourcing and educate readers about the real dangers which await them...

 Introduction

The world laughed as Microsoft rolled out Windows Vista and it fell flat on it's face. Never has a more prominent example of failed outsourcing surfaced since outsourcing began. Despite millions of dollars invested in research, development, and marketing - this product just didn't go the way it was expected to. Are we surprised? Is it so amazing that a product which was outsourced to a foreign country with cheap labour was not what consumers wanted?

What did we expect? I'll tell you what the average consumer expected: more security, better performance, more features, and enhanced compatibility. What did they get? They got: the same or worse security, 50% less performance, no new features, and less compatibility; not to mention restrictive DRM and a "learning curve".

Ten Myths About Outsourcing

I'd like to take a moment to explain the ten myths about outsourcing. Many people fire their workers and hire foreign companies based on myths. Here are the myths and I give explanations of why the are false:

1. Foreign Workers are Cheaper:

Well now that all depends... Are we talking about people with shovels digging a hole or are we talking about programmers? The diggers will obviously be cheaper because they are unskilled labourers. But what about the programmers? They can hardly be called labourers because they produce original code, sort of like a work of art. Therefore they are artisans, not labourers. The truth is that artisans have value based on their skill, not on their labour. A good programmer from abroad is not cheaper than a domestic programmer because their skill is unique and they command the same, or  higher, wages as their counterparts in other countries. If they can't get the wage they want in their country, they can easily relocate to another country and get the prevailing wage. The point is that skilled artisans have mobility and unskilled labourers do not. Therefore the labour may be cheaper but the skilled labour is not. Obviously, the better the artisan, the higher the wage. This myth has been propagated by the insurgence of skilled foreign workers into the market who are not aware of what their skills are worth. Give it time and it will resolve itself.