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Outsourcing Still Alive and Well

Rising costs of business are more powerful than 'backshoring' trned

By Michael Roston, Newser User

Posted Oct 22, 2008 9:30 PM CDT

(Newser) – Reports of the death of outsourcing have been greatly exaggerated, three specialists in the field write in strategy+business. While a few big companies such as Dell and Apple have scaled back on customer service operations overseas, these decisions remain the exception to the rule, no matter what you read in the mainstream business press. The practice simply makes too much economic sense to disappear.

Three-fourths of 600 US companies said they plan to increase customer service outsourcing for a host of reasons, including rising fuel prices and a lack of skilled workers in this country. Yes, the costs of offshore labor are rising, but the "sheer number of new entrants into the skilled labor pool in developing countries will keep offshore labor prices competitive relative to the US for the foreseeable future."

[Images (3)]

[Quotes (1)]

Hewlett-Packard employees work at the company's Business Process Outsourcing center in Bangalore, India, Tuesday, Aug. 7, 2007. (AP Photo/Aijaz Rahi)

In this Feb. 6, 2007 file photo, an employee of Convergys Corp., a global leader in call-center outsourcing, speaks with a client, in Gurgaon, a suburb of New Delhi, India. (AP Photo)

Chinese employees working in cubicles at the Hewlett-Packard call center in Dalian, northeastern China's Liaoning province on Sept. 24, 2007. (AP Photo)

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Outsourcing Still Alive and Well