After the Christmas break semester two consists of just one module in my MSc in Digital Innovation. And this module kicked off with the question, “Is outsourcing evil?” The exercise goal being to cut to the core of what the general public’s opinion is of outsourcing.
The discussion was fast and fluid with many different ideas being brought to the fore. Depending on the point of view involved, be it the company outsourcing or the people who are gaining employment through outsourced work, there was many different positives and negatives to think about. For example, can countries become too heavily reliant on outsourcing? If jobs are moved offshore do people in the country they are moved from suffer? Or do they get to work on more interesting things? If a country outsources are lot do the people in that country lose the skills associated and become completely reliant on someone else for that service or product?
Very interesting questions in what looks to be a complex area involving social contexts as well as business ones.
We also talked about how outsourcing is not a new strategy at all, that it is probably one of the earliest strategies that is heavily used to try to cut costs. It is only that digital technology has (relatively) recently been a very successful at enabling business process offshoring. Despite this enabling factor we need to be very aware that while at first glance offshoring might look like a very cheap option to get something produced, there are hidden costs involved. Things like communication, cultural differences, timezone differences can increase costs in unforeseen ways.
For the term paper in Outsourcing & Offshoring, we are tasked with evaluating it’s impact on a country. For this I have chosen Malaysia. Malaysia is a relative newcomer to the outsourcing industry but it is building it’s outsourcing capability and competing with countries like Thailand, Indonesia and Singapore. I feel it will be interesting to look at the data to see if there is a correlation between the rise in outsourced projects to the country and positive or negative impacts on things like literacy, education, standards of living etc…
My experience of outsourcing has been very much from the developer side, both working with offshore teams and the threat of losing work earmarked for me to offshore teams. So it will be interesting to take a deeper look at the the process, how it works from a business point of view and what impact it can have on the individual, the company and the country.