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BPO Journal

Wednesday, January 25, 2006

The future of offshoring? Not merely moving up the skills chain

Movement of tasks overseas jumps up skills chain relentlessly - OFFSHORING: Developed nations such as the US and the UK are being forced to look at their attractiveness, says David Wighton.

Apparently, the Financial Times is still taken in by how the reach and impact of offshoring have expanded to include a range of strategic business objectives. The business media's sustained focus on why JPMorgan Chase, Intel and Microsoft choose to create more than 7,500 offshore jobs in high-value areas such as research and development, and processing complex derivatives trades never ceases to amaze me. Does this sound familiar to you?
Yet the biggest beneficiaries of offshoring investment from foreign companies are not Latin America, China or even India. They are the US and the UK. McKinsey's Ms Farrell says that rather than trying to prevent jobs moving offshore, US lawmakers should concentrate on improving the attractiveness of the US to inward investors by tackling weak telecommunications infrastructure and rising health costs. US policymakers cannot avoid addressing both of these issues if the country is to continue being a magnet for foreign investment.

I think managers are more cognizant than earlier of the basic rules of offshoring - it's not for everyone, it's not just about costs, it's a complex process, and when managed appropriately, can result in significant value.

So, it's time to move on. I've said it earlier, and I'll say it again. It's time for a shift in focus of the debate. From whether we should outsource to how best to outsource. And when I say how best to outsource, I am pointing to the need to complement efficiency issues with addressing the challenge of taking care of those who are "outsourced". What are the programs that firms have in place to assist displaced workers? What percentage of savings from offshoring does this amount to? How are unions responding to outsourcing decisions? Is there an upgradation of skills happening among the workforce?

Scharmer, a researcher at MIT, talks about how generative dialogue or thinking together helps leaders address complex issues that cannot be addressed by learning and knowledge of the past. Leaders at JPMorgan, Chase, Intel and Microsoft must think together to address the human consequences of offshoring. And the media, instead of reaffirming dated beliefs, might point to these new directions.

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