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Opinions & Insights
by Gary Zeiss, Esq. on November 20, 2008
While outsourcing companies seem to remain bullish about their future (see this article), but I often wonder whether this is more like cheerleading in the face of a difficult future.
First, the very end of the article shows a little caution - pointing out the broad-based trouble being faced by the economy. Second, political winds are clearly aligned against outsourcing. Third, and most interesting, is the possible turnaround of the "shareholder value" culture in an economy that has universally decimated shareholder value.
I, for one, think that the current recession, and its broad, global effects, has the potential to change our culture from a shareholder-value focused economic culture to a stakeholder-value focused economic culture. Certainly, government investment in large financial and industrial companies may indicate that this is possible.
This kind of shift - to a stakeholder-value focused approach - could have a long-term adverse affect on outsourcing, as justification will need to be more than dollar savings (particularly when those savings have proved elusive). As such, I think it could be a very, very long time before we offshoring rebounds.
First, the very end of the article shows a little caution - pointing out the broad-based trouble being faced by the economy. Second, political winds are clearly aligned against outsourcing. Third, and most interesting, is the possible turnaround of the "shareholder value" culture in an economy that has universally decimated shareholder value.
I, for one, think that the current recession, and its broad, global effects, has the potential to change our culture from a shareholder-value focused economic culture to a stakeholder-value focused economic culture. Certainly, government investment in large financial and industrial companies may indicate that this is possible.
This kind of shift - to a stakeholder-value focused approach - could have a long-term adverse affect on outsourcing, as justification will need to be more than dollar savings (particularly when those savings have proved elusive). As such, I think it could be a very, very long time before we offshoring rebounds.
Tags:
downturn
recession
outsourcing
2008
creative
offshore+outsourcing
downturn+affecting
affecting+offsh
Trackback: http://publish.creative-weblogging.com/publish/mt-tb.pl/138332
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Vote for Is the Downturn Affecting Offshore Outsourcing?:
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Rating: 9.00 out of 4 vote(s) cast.
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Response from:
internet traffic help
(11/21/08 4:45am)
I dont think so ..
Response from:
Outsource Opinionist
(11/24/08 6:04pm)
Outsourcing as a business model has been growing at record rates for the past decade or so, recklessly some may argue, it could be pruned. The economic slowdown can be taken as a positive event as it can allow companies that outsource and their partners to reassess priorities, refine processes and regulate actions that could lead to unnecessary, potentially detrimental excesses.
Since financial crises are likely regular events in human history, what better way and time to innovate outsourcing and its culture to insulate itself from future economic downturns?
Since financial crises are likely regular events in human history, what better way and time to innovate outsourcing and its culture to insulate itself from future economic downturns?
Response from:
Offshore Outsourcing
(12/05/08 8:02am)
To a certain extent, the downturn bodes well for outsourcing companies as American companies look to reduce their costs and outsource a greater portion of their operations.
Response from:
Errol van Engelen
(12/09/08 9:25am)
The downturn will probably trigger the shift to a stakeholder-value focused approach. I also think that the shareholder value focus will fade out and that will have its impact on quality. Not just the quality of the service, but also the quality of the process. If offshoring companies work at CMMI level 4 or 5, and the client company works at level 2 or 3, then a lot needs to be done to synchronize the processes.
Response from:
Outsourcing Tax Processing
(12/16/08 2:28am)
Outsourcing business has suffered a lot in this recession. Loads of business of outsourcing was coming from United States and because of the recession they have reduced the work up to the great extent. So offshore companies have survived badly in this period...
Response from:
Richard Blank
(01/07/09 1:25pm)
Outsourcing Costa Rica? It may be a wise move during a recession.
In today’s highly competitive outsourcing market, a closer proximity to the United States , Central Time Zone and Spanish language capability as an added value are now considered almost basic requirements when making a decision on what call center to use for your important project. Leaving this to chance is not even an option anymore.
Many of the offshore call center agents are bilingual in their native Middle Eastern or Asian language which is difficult to the North American ear. Whereas Spanish is more useful and practical as a second language for potential untapped markets throughout the North, Central and South American populations as well as those countries where Spanish is either a primary or secondary language. This aspect alone has made Costa Rica a very attractive “near-shore” outsourcing solution. Most importantly, you can take advantage of the international tax laws granted to international companies that invest in Costa Rica and its local economy. The potential savings and benefits will make your outsourcing campaign a very wise business decision.
http://www.costaricascallcenter.com/why_costarica.html
In today’s highly competitive outsourcing market, a closer proximity to the United States , Central Time Zone and Spanish language capability as an added value are now considered almost basic requirements when making a decision on what call center to use for your important project. Leaving this to chance is not even an option anymore.
Many of the offshore call center agents are bilingual in their native Middle Eastern or Asian language which is difficult to the North American ear. Whereas Spanish is more useful and practical as a second language for potential untapped markets throughout the North, Central and South American populations as well as those countries where Spanish is either a primary or secondary language. This aspect alone has made Costa Rica a very attractive “near-shore” outsourcing solution. Most importantly, you can take advantage of the international tax laws granted to international companies that invest in Costa Rica and its local economy. The potential savings and benefits will make your outsourcing campaign a very wise business decision.
http://www.costaricascallcenter.com/why_costarica.html
Response from:
Steve
(01/22/09 7:23am)
U.S. companies seeking to maintain their margins during this period of economic downturn, can set up and control their own operations at low cost and risk in Mexico under Vangtel's Shelter Program:
http://www.vangtel.com
http://www.vangtel.com
Response from:
Steve
(01/22/09 7:25am)
U.S. companies that are seeking to maintain their margins in times of economic downturn, can set up their own IT, back office or call center operations in Mexico at reduced risk and cost using Vangtel's comprehensive business model:
http://www.vangtel.com
http://www.vangtel.com
Response from:
ph_outsource
(01/26/09 1:17am)
Outsourcing maybe affected by the recession but will survive as small businesses strive to grow.
Response from:
Mike
(01/30/09 2:57pm)
I think, it depends highly on the individual situation of the outsourcing company and also on the type of communication policy. IT-Offshoring is in Europe still growing. The German page http://www.exactus-marketing.de/vertriebsoutsourcing
defines different solutions to a effective communication policy to conquer the existing challanges.
defines different solutions to a effective communication policy to conquer the existing challanges.
Response from:
Wojtek
(03/03/09 10:49am)
A lot depends on who your customer actually is. Some businesses are badly affected, some are not. It would be naive to think that everybody in the world suffers except of outsourcing. On the other thing the world has not stopped yet... If the business slows down people still buy goods and services, so do the companies. That makes things rolling. Yes - the contractors are the first to cut, but no - you do not start with cutting the cheapest (and sometimes the best qualified) resources.
Response from:
CompanyOffshore
(05/28/09 1:49am)
Yes...Outsourcing maybe affected by the recession but will back soon...
Response from:
Offshore Outsourcing
(05/28/09 1:50am)
Yes...Outsourcing maybe affected by the recession but will back soon...
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