--> Gill Blog: Outsourcing Scapegoats

Gill Blog

Tuesday, October 14, 2003

Outsourcing Scapegoats

Some media pundits are looking for scapegoats for the current state of the U.S. economy. As an increasing number of companies decentralize operations offshore, one of the most popular targets of the media is outsourcing to India. Lou Dobbs has recently used his program on CNN as a forum to portray the people who work in Indian data centers as the equivalents of scab labor, and culprits in the "Exporting of America". This is a simplistic view of an issue that is much more complicated than the way Dobbs describes it for his audience. The issue has much more to do with a global marketplace where different regions possess certain areas of competitive advantage. India has a competitive advantage in data center operations, just as China has a competitive advantage in manufacturing.

In today's Globe and Mail, John Saunders writes an article that sorts it out quite well, and explains in detail why this phenomenon is occurring and how outsourcing (or "offshoring") plays an important part in creating a decentralized facility strategy. Although veteran outsourcing consultant Robert Fabian is quoted in the article as saying that if he were a white collar worker he wouldn't be too happy with what's going on, he seems to acknowledge that the movement to IT outsourcing seems inevitable.

All of this talk about outsourcing has prompted me to post this paper I wrote two years ago describing how the medical industry in the United States has increasingly been decentralizing medical transcription services to data centers in India. Because media reports on "offshoring" often depict outsourcing in macro terms, I thought it might be interesting to provide a snapshot of the micro aspects that exist within a particular field where we have recent experience.

P.S. Corporate Real Estate Industry Stays Put

A survey just released by CoreNet Global at their annual summit revealed corporate real estate executives' strong reluctance to outsource jobs overseas. You can read the details here.


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