This chapter discusses how off-shoring is rapidly emerging as a competitive reality for corporations, workers, and consumers. I definitely see the benefits for U.S. companies; the potential for better quality at a significantly less cost. However, I am weary of how off-shoring will affect the labor market and the overall economy in the future. For IT-related employees, off-shoring will cause their salaries and job security to greatly decrease. According to a McKinsey and Company study, 11% of service jobs could potentially be moved overseas. I see the vast majority of service jobs remaining in the U.S. because the nature of these jobs require face to face customer interactions or a worker’s physical presence. For example, it would be impossible to send the work performed by a dental hygienist or a sales clerk offshore. However, given the growth of high-speed networks, the Internet, and low-cost labor, I would not be surprised if the majority of the 11% of service jobs off-shored were IT-related jobs. Also, as this chapter points out, historical figures of jobs lost when the manufacturing sector was off-shored cannot be used to predict the potential number of IT-related jobs lost. IT-related employment will actually shift from the U.S. at a much faster rate than seen in the manufacturing sector. This fact along with the trend of more conservative IT spending makes me worry about the IT profession in the U.S. I think I would support off-shoring more if their was a better safety net for displaced workers including maybe better unemployment insurance or retraining programs for those who do lose their job.
One section that caught my attention was the “Quality Rules” paragraph. Measuring quality usually seems like a subjective process to me. However, the standardized CMM ratings used by the software industry seem more accurate. With CMM Level 4 and 5 representing the highest levels of quality, I was shocked to find that over 65% of level 4 and 5 certifications are held by Indian companies. This contradicts my allegations that all offshore work is of poor quality. I think I held this assumption because of the many horror stories in the news of recalls of imported products, many that have caused injuries. However, the need for U.S. companies off-shoring to continuously investigate the human rights practices and quality procedures used by the foreign company was greatly understated.
In the end, this chapter proves whether you’re for or against off-shoring it’s a rapidly approaching reality. Companies failing to off-shore will experience higher costs than reduce overall profits. Companies off-shoring their entire company will lose too much control and lose contact. However, blending domestic and off-shore resources will give companies the best in costs, productivity, quality, and responsiveness.
In another class, a group presented a debate on off-shoring and showed this clip as a joke. I wanted to include it because I kinda thought it was funny.
http://youtube.com/watch?v=YR_-aMVQWZI&feature=related
One section that caught my attention was the “Quality Rules” paragraph. Measuring quality usually seems like a subjective process to me. However, the standardized CMM ratings used by the software industry seem more accurate. With CMM Level 4 and 5 representing the highest levels of quality, I was shocked to find that over 65% of level 4 and 5 certifications are held by Indian companies. This contradicts my allegations that all offshore work is of poor quality. I think I held this assumption because of the many horror stories in the news of recalls of imported products, many that have caused injuries. However, the need for U.S. companies off-shoring to continuously investigate the human rights practices and quality procedures used by the foreign company was greatly understated.
In the end, this chapter proves whether you’re for or against off-shoring it’s a rapidly approaching reality. Companies failing to off-shore will experience higher costs than reduce overall profits. Companies off-shoring their entire company will lose too much control and lose contact. However, blending domestic and off-shore resources will give companies the best in costs, productivity, quality, and responsiveness.
In another class, a group presented a debate on off-shoring and showed this clip as a joke. I wanted to include it because I kinda thought it was funny.
http://youtube.com/watch?v=YR_-aMVQWZI&feature=related
I agree, companies will lose control of their organization as they continue to offshore production. I feel that companies are not analyzing this possibility as closely as they should, instead they're more focused on their bottom line and decrease in overall cost.
ReplyDeleteI agree, too. It is pretty easy that the organizations of the companies are out of control. For example, our factories in my country, Taiwan, are always influenced by the government of China. The relationship between Taiwan and China is very complicated. These two government can't maintain a positive international relationship. For Taiwanese, the new trend, Offshoring, is not only a business trend but it is also a international relations. Even if Taiwanese stand more advantage that foreign, we are restricted by our government.
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