This is just the tip of the iceberg. Much more will be outsourced to India, and India will in due time become a key player with the US in keeping the planet stable. It is an excellent investment. How much has the unemployment rate in the US skyrocketed up again in the last couple of years given the hydra head evils of outsourcing?
That's horrible!
Just out of curiosity, Willie, what do you do for a living?
People who think it is would have believed the world was flat 400 years ago.
that's a lot. 210 billion is almost 2% of GDP.
Make it a round $500 billion. Sounds better.
$200 billion outsourced could be 1-2 million jobs per year depending on what they are outsourcing. High tech...2 million, call center 1 million. Not to mention the lost tax revenue, lost loans, lost purchasing power on and on.
One of the greatest factors in the fall of the Roman Empire was that the Roman citizens did not want to fight or go to war anymore.
SO- they outsourced the defense. Read your history. Attila the HUN was Roman trained.
John Kerry wants to do this with our military. He wants to include French and German troops in any venture. Another way of looking at is he wants outsource our National Defense.
Interestingly, China ( Haier ) has built a $40 million refrigerator manufacturing plant in Camden, S.C..--350 employees.
First, what is the Deepika Times or whatever? It sounds like the Indians are trying to go bragging again.
Just because something is 'projected' does not mean it is certain.
Second, look at the internal source for the article. Deloitte & DoucheTM.
They are a consultancy practice, hoping to cash in by 'advising' and 'administrating' outsourcing projects.
Of course they are going to try to stampede executive lemmings over the cliff.
Please note from the article, it is claimed that globally,
companies will move $210 billion of financial-related business to India in 2005.
Is that the price currently being paid to First World employees, or the anticipated price in India wages?
And what is the total value of all financial services back-office work worldwide?
How does this figure compare to the $210 billion?
Also note that even the article claims that half of the
companies have contingency plans in case the outsourced
work is screwed up.
Sounds like our Indian friends are gaining quite the reputation, there.
Finally a couple of points of my own. Look at one of the recent issues of E-week (an IT industry rag).
There, it is noted that JP Morgan is INSOURCING a lot of its development. This implies that the executives there have figured out that no matter what the price, sometimes a Yugo...or a Tata...just isn't worth it.
Second, one of the trends, as noted in articles on BW Online, E-week, and others, is simply that many Indian outsourcing IT firms are beginning to make acquisitions. You could argue that this implies they are flush with cash...and to some extent, this is true. But what is carefully left out of the stories is the implication:
their astronomical organic growth rate is slowing.
It is a general truism in business that "You grow organically first, later you purchase growth."
In other words, most of the low-hanging fruit of offshoring the easy stuff--call centers, low-level programming--has been done. And much of the work has come back either so screwed up, or so behind schedule, or so in need of being re-written from the ground up--that news is beginning to filter back to the Carly Fiorina's of the world who were under the gun to produce results out of thin air in otherwise dying companies. (BTW, does anyone know if the screwed-up SAP integration which they blamed for their missing latest quarter financials was done offshore?) And if you can't trust an offshore concern to simply set up a simple Oracle database without extensive hand-holding, then you will not trust your entire enterprise to them. IT JUST TAKES TIME!
The question is whether or not the greedy executives will have effectively eviscerated the US economy, and the underpinning of technically competent Americans in the meantime, in their insane haste for fictitious, unlimited cost savings from the third world.
[Full disclosure: some of my earlier posts have savaged US executives for their short-sighted greed in offshoring. Please look up and read those postings before flaming me!]
First, what is the Deepika Times or whatever? It sounds like the Indians are trying to go bragging again.
Just because something is 'projected' does not mean it is certain.
Second, look at the internal source for the article. Deloitte & DoucheTM.
They are a consultancy practice, hoping to cash in by 'advising' and 'administrating' outsourcing projects.
Of course they are going to try to stampede executive lemmings over the cliff.
Please note from the article, it is claimed that globally,
companies will move $210 billion of financial-related business to India in 2005.
Is that the price currently being paid to First World employees, or the anticipated price in India wages?
And what is the total value of all financial services back-office work worldwide?
How does this figure compare to the $210 billion?
Also note that even the article claims that half of the
companies have contingency plans in case the outsourced
work is screwed up.
Sounds like our Indian friends are gaining quite the reputation, there.
Finally a couple of points of my own. Look at one of the recent issues of E-week (an IT industry rag).
There, it is noted that JP Morgan is INSOURCING a lot of its development. This implies that the executives there have figured out that no matter what the price, sometimes a Yugo...or a Tata...just isn't worth it.
Second, one of the trends, as noted in articles on BW Online, E-week, and others, is simply that many Indian outsourcing IT firms are beginning to make acquisitions. You could argue that this implies they are flush with cash...and to some extent, this is true. But what is carefully left out of the stories is the implication:
their astronomical organic growth rate is slowing.
It is a general truism in business that "You grow organically first, later you purchase growth."
In other words, most of the low-hanging fruit of offshoring the easy stuff--call centers, low-level programming--has been done. And much of the work has come back either so screwed up, or so behind schedule, or so in need of being re-written from the ground up--that news is beginning to filter back to the Carly Fiorina's of the world who were under the gun to produce results out of thin air in otherwise dying companies. (BTW, does anyone know if the screwed-up SAP integration which they blamed for their missing latest quarter financials was done offshore?) And if you can't trust an offshore concern to simply set up a simple Oracle database without extensive hand-holding, then you will not trust your entire enterprise to them. IT JUST TAKES TIME!
The question is whether or not the greedy executives will have effectively eviscerated the US economy, and the underpinning of technically competent Americans in the meantime, in their insane haste for fictitious, unlimited cost savings from the third world.
[Full disclosure: some of my earlier posts have savaged US executives for their short-sighted greed in offshoring. Please look up and read those postings before flaming me!]
"Half" seems low; most big financial companies are well-known for their contingency planning.
Wall Street did a good job of recovering from the World Trade Center attack, thanks to the thorough planning that goes on at most of the larger firms.
Business continuity planning is expensive, and like other insurance, you hope never to use it, but it is a necessity and I suspect that the "half" reported is only half of the story.
The real tragedy here is that these companies are moving these jobs to India and other countries. It isn't a tragedy for these companies individually (I hope) -- it is quite a benefit to each company's bottom line -- but for us as a country, it is a significant loss. I know that when the WTO treaty was debated, the discussion wasn't how quickly we could ship off white-collar jobs in the financial industry, but of its great benefits.
Instead, we see a hollowing-out of our financial industry and, to add insult to injury, are incurring massive debt to pay for all of this "free" trading.
"In 2005, Deloitte expects the top 100 global financial companies to offshore..."
It doesn't say what the breakdown is by country.
A couple of positives: First, these outsourced jobs give Indians and Banglideshies(? spelling) better jobs, and more spending power, increasing their demand for goods made by US companies, which boosts our market.
Second, give these nations a stake in the financial system we share, and they are more likely to strengthen their own legal, law enforcement agencies to stop domestic terrorism and unrest. Plus, when we ask them for help against Al-Qaida, these nations are far more likely to give us a hand.
Kerry's strategy of yanking these jobs back to the US will only make them more reluctant to join our fight against the terrorists. Bush should drive this point home in the next two debates.
What are we supposed to do about it? People want to pay the cheapest costs possible for the services they receive. Companies have to cut costs somewhere. Companies don't owe anybody a job. Yes, it's a nasty situation.
I called my credit card's customer service line about a month ago to ask some questions about making a payment online and I got one of these offshore help services. I ended up in an argument with this India woman because I wouldn't give her sensitive information about myself. She insisted that my account needed this update and that I MUST give her this sensitive identifying info or my account would be 'tagged' as me being non cooperative. I told her to send me a questionaire in the mail and I would be happy to update my account info, but she said they could not do that. I worry about identity theft playing a big part in these offshore 'services'.
Sounds like smart business to me. Unless of course you believe companies shouldn't be in business to actually make money.
I see that you are still posting this crap, Willie.
Some things never change.
Does that big "L" on your forehead influence you? Mr. 54 year old, 6'4 engineer? (Yeah, right)