Blog 10: Chapter 13: Outsourcing

Within the chapter, I came across a “point of interest” about a World Interactive IT Map on cio.com. I went to the map and clicked around looking at the different countries that performs outsourced work. You can click on hundreds of different countries and view a “scorecard” for each of them. I learned that Ireland’s outsource ranking is declining and its cons are that it’s too expensive, no longer a viable center for labor arbitrage and there is a gap between the labor supply and demand which is a burgeoning problem. India is the leading outsource country. The pros of outsourcing in India are that they are working to stay on top, it has essential resources and a robust infrastructure to deliver comprehensive application, infrastructure and business process services. India rakes in almost $18 billion in IT and BPO annually. Also, it is home to some of the most technologically advanced companies in the world; three out of five of the world's CMM Level 5 companies are in India. In addition, there are 200,000 IT grads per year meaning there is always a supply of workers.

http://www.cio.com/article/123711/Click_and_Save_with_Our_Interactive_Global_Outsourcing_Map

When looking at the map I came across a link to another article about outsource prices dropping in 2010. The author Stephanie Overby writes that outsourcing prices dropped in 2009 and “It's not just the global economic slowdown that's sending IT service prices south, it is also the increased use of offshoring, pricing pressure from customers, and a reduction in vendors' services.” But a quote from Ben Trowbridge, CEO of outsourcing advisor Alsbridge says that “One of the issues we see is that lower prices can also be driven by disaggregated service." For example, lower desktop support prices might be due to a vendor delivering remote infrastructure management support. But they might just as well be the result of a reduced scope of services that leaves the client with a lower level of service or possibly having to retain other costs—which negates or reduces the customer's potential savings.”

http://www.cio.com/article/510271/Outsourcing_Prices_Likely_to_Drop_in_2010_But_at_What_Cost_