For years, the outsourcing world has been buzzing about reshoring (or "backshoring"), taking the jobs we sent offshore years ago and bringing them back to the US and Europe. Low wages, cheap property, and favourable taxes made offshore manufacturing very attractive. But in recent years property values rose, staff turnover increased, and wages just keep heading up. Despite weakening economics, offshore still made sense. Until today!
Hard to believe half a year has gone by so quickly, but Outsource finds itself once again at a SIG Summit – taking place this time round in delightful (though, today, surprisingly drizzly) Carlsbad, California.
For as long as I can remember, arguments about outsourcing have played a part in the US election cycle. In the final stages of the presidential election the two candidates will make promises they can’t keep and declarations about how bad outsourcing is for the American economy.
Last week, Delta Air Lines faced a technical hitch. On the surface it wasn’t an enormous problem - a power outage at their Atlanta data centre caused a switchgear to fail (like a circuit breaker in your home). However, the backup systems didn’t come online correctly and the failure of this one piece of equipment then caused a complete shutdown of the Delta IT systems globally.
With the United Kingdom set to leave the European Union, the impact on the Polish outsourcing market looks likely to be both positive and negative. The full extent on outsourcing is yet to be determined, but some predictions can be made based on various scenarios.
If Polish talent leaves the UK
Europe is in turmoil after Great Britain’s vote to leave the European Union. Those who now claim to know what will happen now – in outsourcing or in other areas – will make two big mistakes: First, they will show that they don’t understand what Brexit is. Brexit is, to use the words of author Nassim Nicholas Taleb, a “black swan”: an unexpected event with largely unforeseeable consequences, just like 9/11 or the Lehman Brothers bankruptcy filing. Second, they will simply be wrong.
Haitao Qi is the CEO and founder of Devott, the leading Chinese research and advisory firm focussed on the country’s technology markets and business services, whose annual Devott Global IT & Sourcing Summit (DGITS) is now the largest of its kind in China.
It was a rainy day in Goa, India and I had just got back to the hotel in the evening after meeting customers. As I walked through the corridor of the hotel I saw a lot of people from the Middle East sitting at the lounge and enjoying a drink as they chatted and gazed out over the Arabian Sea and the rains. I asked the lobby manager as to why so many people came in from the Middle East during monsoon times. He smiled and told me that his hotel marketed what they called “Monsoon Tourism”.
It seems like there isn’t a day which goes by at the moment without a new robotic invention in the news, with promises around how these inventions will not only revolutionise our lives, but threaten our jobs.
In the outsourcing sector robots are most definitely on the way, or in some cases, already here. And it is, therefore, vital that businesses operating in this sector seriously consider how some robotic processes can enhance their operations – there’s no doubt competitors are also considering the same issue.
The term ‘world class’ has become so commonly used that it has lost some of its impact and Holy Grail magic. In our highly connected workplaces and social lives, we can access knowledge, expertise and insight from people we will never meet, and choose our heroes and role models from a global panoply.
‘World class’ is no longer about having global experience, or confidently operating in an international context, because on some level, most people are doing that on a daily basis, even if it’s only through following celebrities on Twitter.
A look at the picture below shows that design thinking is all about starting with the customer and ending with the customer. This really sounds like very old wine in a new bottle. But, please do remember: a lot of very old wine actually tastes really good. The offshoring/outsourcing industry has grown significantly. However, the industry still struggles to show the value-add - and more so prove that it is adding value to its customers.
NEW YORK: The international outsourcing community is in disarray following last night’s shock announcement by the UN Security Council that all outsourcing and offshoring activity has been criminalised “with immediate effect”.
“I can’t believe it,” lamented the anonymous CEO of a major multinational service provider. “Decades of constant, overwhelming, economy-rejuvenating success – give or take a few multibillion-dollar failures – and they do this to us. Talk about a kick in the nuts.”
‘Advice For The Offshoring And Outsourcing Young At Heart’
by Fear of Gears
Advice for the outsourcing young at heart
Soon we will be older
How are we going to make it work?
Too many vendors living in a secret world
While they play movers and shakers,
We play digital in a whirl.
How are we going to make it work?
I could be happy; I could be quite naïve
Just labour arbitrage in my shadow, happy in a make-believe
Over the last month, British businesses have been bombarded with other people’s opinions. In the outsourcing industry, this is quite normal: everyone and their dog has a strong opinion on how outsourcing companies should and shouldn’t operate. But this time, we’re being told that our businesses are on the line because of a vote.
The days of paying supply chain outsourcers by number of FTEs are on their way out. In that purely cost-based model, the OEM’s interests – keeping hours low to contain costs – are inherently pitted against their managed service provider’s – putting more FTEs on a project to maximise revenue. Instead, OEMs are now exploring outcome-based models, where sellers become partners who share the risks and rewards of achieving their goals.