Thursday, June 7, 2007

Thought sourcing

I am not a major news reader. Yes, I like RSS feeds but its not largely to do with news. But on the odd occasion I check the world at large, I get the feeling America is obsessed with two things. Osama and Outsourcing. Osama's the general metaphor for terrorism and ever since 9/11, he's been around everywhere and his henchmen/lackeys/assorted heinous deputies have been troubling the world no end. Its daily news, usually very sad, and pretty repetitive, so I'd rather not discuss it right now.
On the other hand, outsourcing, that supposed manna of business re-engineering and cost control, has also evoked the interest of most Americans and you can be sure everybody's got an opinion on it. I think outsourcing is cool, not because I give a rodent's behind that America can finally figure out where Asia is on the map, but because it provides a huge potential to make money. Yet, despite this initial euphoria about the monetary gains from IT outsourcing, its quite obvious its not going to grow at such a tremendous rate for very long, and the cost arbitrage which everybody's been harping about, is probably going to disappear at some point in the future. People have gone to great lengths to assure everybody that right now, there's just so much to throw around, and so life's going to be good for a while at least. Yippee!!
So, everybody's happy now, and young people in India study, work hard and get a "campus placement" into a software company that recruits only the cream of the class. To do what?? Maintenance work on some 100 year old code that runs on obsolete hardware which cant be replaced, or sit on the metaphorical bench and wait for a moment to go "on site" and rake in the moolah.
In some recent articles by some of the supposed visionaries of the IT revolution, there has been talks of how the IT companies should move towards intellectual arbitrage, as the cost arbitrage advantage is not sustainable. IMHO, there is very little that separates one Indian IT company from the other. Catchy titles like Global Delivery Model, Offshore Development Center, Center of Excellence etc just give rise to cool acronyms like GDM, ODC and CoE, and are quoted ad nauseum, but is that enough for sustainable profit growth? And if so, for how long? Yes, alright, I concede that, considering the sheer volume of available work, it seems the party's going to last for a while longer.
Moving on from my rant (I work in one of these companies!), one of the positive points, I guess, of outsourcing, has been how entrepreneurs in certain countries (like India) have been able to capitalize on it. And in the process, create jobs which in turn leads to a growing economy, and so on and so forth. Most companies in developed countries, nowadays have an India strategy which, I guess, over the years will probably become an Asia/East Europe/Latin America strategy considering the Global Delivery Model (GDM) encompasses all low wage area as potential for an ODC. Even the markets respond positively to companies who outsource, as it seems to be the one of the popular strategies to cut costs in a "globalised", "highly competitive" and "constantly evolving" economy.
The media, too have had their fill of debating the positives and negatives of outsourcing, and reams of print have been wasted in efforts to either justify or condemn it. There have even been articles that have joked about outsourcing.

But recently, I came across one that sort of mocked the entire thought process behind outsourcing and how its not a strategy that can be blindly applied in any industry. In particular, the article talks of how its not possible to do outsourcing where the social context cannot be understood by the people who the work have been outsourced to, and thus it leads to a really hilarious situation. Although, it makes fun of the Indian parliament (of which I am not a big fan anyway), I still felt it was interesting enough to warrant a link. So here it is.

1 comment:

Anonymous said...

very good write! nice. the linked article is pretty crappy though