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We just have twenty years of experience that any initial cost savings generated by outsourcing are illusory and come due with interest on the back end.
by thrower123 5y ago
We just have twenty years of experience that any initial cost savings generated by outsourcing are illusory and come due with interest on the back end.
- throwawayboise 5y agoI agree that has been the case but I don't think it is a certainty that it will continue to tbe the case. Certainly many immigrant workers in IT do good work and are well paid. Why could they not do the same thing from their home country?
- lotsofpulp 5y agoDepends what you're outsourcing. We outsourced manufacturing and those cost savings were certainly not illusory. A lot of communications type work suffered from outsourcing due to language barriers and poor connectivity and poorer skillset from workers in other areas of the world (or even the US). That may not always continue to be the case. I'm guessing the top 10% or 20% of workers do not need to be worried since they can provide so much value that outsourcing is not worth it. But if you're in the bottom 4 quintiles, I would be wary.
- arrosenberg 5y ago> We outsourced manufacturing and those cost savings were certainly not illusory. Sure they are. The expertise and factories to build a lot of components are no longer in the US, which has a ton of knock-on effects in the economy - job loss, decline, etc. That's a hidden cost that offsets whatever cash savings were experienced on the front end.
- lotsofpulp 5y agoThose are societal costs, not costs for the company making the decision to outsource or not. A company taking into account those societal costs while others do not will end up not being able to competitively price their products.
- deleted 5y ago[deleted]
- antonvs 5y agoGood argument for government imposition of external costs via taxes, regulation etc.
- ishjoh 5y agoNot only did we lose the ability to manufacture things locally which has impeded our ability to innovate in certain fields, many companies were wiped out by new overseas low cost competitors who took the expertise they learned from our training in the initial outsourcing. Essentially for short term gain for some, entire companies were destroyed. So there were heavy costs on the backend.
- bluedino 5y agoWhy does every vendor I deal with still do it, at least for support?
- thrower123 5y agoCognizant and TCS and Infosys and the like have this market on lockdown, and nobody cares that the experience is terrible because it's just a cost center.