No fear for outsourcing

Released on = May 20, 2006, 2:03 am

Press Release Author =

Industry = Management

Press Release Summary = Outsourcing job will not destroy US jobs. Period.

Press Release Body = Do we need to be scared for outsourcing of jobs? Will this
destroy US job market? These types of questions are now worrying nation's
economists. Henry Watson has attempted to answer these questions while National
Outsourcing Association warns users to outsource jobs blindly to reduce the labor

While reversing the outsourcing job is the talk of the town, some industry scholars
are of the opinion that there is no fear in outsourcing, They believe that key
services offsite should not be considered as threat. "'There is no greater risk
involved from outsourcing most services from a distance than there is having the
person next door. Having said that, however, the underlying point is a very valid

"Let's put it in a different way. It is less risky in delivery unless you get the
right partner and put it in the right control mechanism and get the right people,
there should be no reason for feeling greater risk than if you were to have it
in-house," sources said.

Henry seemed to be accepting that outsourcing deals do fail sometimes. But he
asserted that quality of service was never compromised on outsourcing projects. His
point on the success and failure of outsourcing was clear that "if we didn't deliver
quality, introduce latest techniques in processes and motivate quality individuals,
then we wouldn't survive."

Cost effectiveness remains the major reasons for outsourcing, however, not the only
one. This was shown in the recent survey of intellectuals of the industry where 48%
said that they were not convinced that outsourcing would save labor cost

However, Henry believes that the major reason of outsourcing the job is saving on
cost and this remains undeniable fact. But he has also suggested that might change
because outsourcing could help add value too. "If you get a good IT partner who can
launch products into the market, cut down production time and distributor chain
system thus it will have a direct impact on competitive advantage,' he said.

'Outsourcing is going to be a cyclical process. You start off with cost reduction
and once you get control on basic operation then you think how can we turn this to
add value. Hence you must not have fear in outsourcing,' he added.

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