Why Outsourcing Sucks

I'm a reasonable person. I know very well that a call center in India is not the source of all my economic troubles. Still, there's no denying that outsourcing by large American companies hurts small American companies. It's a punch to the jaw of American entrepreneurs.

I know, because my own jaw is sore today.

Indeed, I learned last week that one of my largest and most consistent clients has decided to outsource my job function, presumably to a professional services firm overseas. A service that I charged several hundred dollars for — a bargain, I assure you — is being given to them via their new provider for just $10 a pop. I can't compete with that, and neither can any of my stateside peers. We have rent to pay, groceries to buy and — here in Chicago, at least — thermostats to fund.

I understand outsourcing. Especially as a small business owner, I can relate to being attracted to folks who offer a decent service at a fast speed and at a super low cost. That's why I stock up on bread when the grocery store when it's "Buy One, Get One Free." Never mind that my bread box is full already. But you know what? If I'm cooking something special for dinner, and I can afford a better loaf, I'm going to buy it because I know it's the right thing to serve.

This isn't an excuse to whine. It is, however, an opportunity to redefine corporate responsibility. We encourage American companies to be good corporate citizens, and we allow them to fulfill their obligations by volunteering, by donating to charity and even by being more environmentally conscious. Perhaps we should also start encouraging them to invest in small-business vendors, partners and suppliers. That's as "responsible" as anything else we ask corporations to do, isn't it?

Especially in weak economies like this one, we need big businesses to put entrepreneurial investments ahead of obsessive-compulsive cost-cutting. It's time to bring home the bacon — literally.

Comments

[Raza Imam]

An opportunity for you to get back in the saddle:

Sending work offshore isn't as easy as people think. Finding good technical people is easy, but finding people who can consistently communicate with you and deliver is another story.

I own a Chicago-based offshore software development firm and we keep hearing from clients that get burned when going offshore. The main reason is poor communication and project management (not a lack of basic tech skill)

An opportunity for you may be to manage the projects that have been taken away from you. Just Google "offshore nightmare" or "Offshore failure" and you'll be able to make a pretty strong case to your client that they need to hire you to oversee the project.

I just spoke to a guy the other day here in Chicago that manages large software projects done by IT outsourcing powerhouses like Tata and Cognizant. If these giants need to be managed by a third party consultant, I'm sure you can find a way to make money.

Outsourcing does suck (more for the customer than you)... your opportunity is in managing this sucky process.

Raza Imam
http://BoycottSoftwareSweatshops.com

[Matt Alderton]

Thanks for your comment, Raza. I think that's actually a great suggestion for folks in my position. Let's face it: Good help is hard to find. Here and abroad. If our clients value our skills, but want to save money, perhaps we just need to suggest a redefinition of our role in their projects. Offering our expertise as managers, consultants and contact points is, I think, a great way to reposition ourselves when clients no longer need us as front-line service providers.