Offshore analysts speak with forked tongue
As the political backlash over the wholesale movement of IT services and business process outsourcing jobs to cheaper labor markets gathers pace, those with the most to gain from offshoring are keeping very quiet. Many companies considering an offshore strategy are very reticent to reveal their plans because they are wary of a backlash from consumers and their soon-to-be-redundant workforce...
One BPO vendor recently said at a conference that as these companies go to ground, they are leaving the vendors to take the flak. But now vendors have joined them in a virtual vow of silence, and are trying to deny that moving work to lower cost countries should be called offshore at all. For example, an IBM spokesperson recently said that IBM does not do "offshoring" because it is a global company and has always had operations in places such as India.
Such doublespeak is already rife in the industry, and the use of the word "offshore" is often replaced. Cap Gemini Ernst & Young calls it "Rightshore", Computer Horizons and EDS both use "Bestshore", and BearingPoint calls it "Anyshore", for example.
A measure of silence
The National Association of Software and Service Companies recently told its members that they would be better off keeping quiet about offshoring until after the US election. It has also come to our attention that contracts are being signed but not disclosed.
In addition, conference organisers have started to bar journalists from their outsourcing events as a result of pressure from attendees and speakers who want to discuss their cost-cutting schemes in private. Those that we have attended have been curious affairs, involving a series of vendors announcing the amazing cost benefits of offshore outsourcing, followed by a series of customers trying to explain that "it's not just about cost-cutting".
We've heard managers speak of how Indian employees "love doing repetitive tasks", how cutting 1,000 jobs in Ohio gave one call-centre manager a "fantastic opportunity to move up the value chain to project management", and how touched one executive was by the maturity of his staff training up Indian counterparts to replace them for a third of their wages. No one mentions Kevin Flanagan, the Bank of America employee who shot himself after he lost his job in an outsourcing initiative.
Arguments for and against
Occasionally the infamous McKinsey report gets wheeled out, which claims that for every US $1 spent on offshore jobs, the US economy gets $1.12 back, but everyone knows the benefits of the $1.12 don't go to the same people that benefited from the $1 in the first place.
A consequence of all this cowardice is that much of the great outsourcing debate is never aired - such as the behaviour the public can expect from multinationals, the rights of less powerful nations to utilise free trade to their own advantages for once, and the alleviation of poverty through the economic investment and jobs brought to developing nations. Minor points, we know, especially when $0.01 earnings per share is at stake, but it would make the debate a bit more interesting if Nasscom and outsourcing vendors would at least stand up and fight.
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