Award winning applications of marketing and technology in the auction industry
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Home / Marketing / Technology / Outsourcing: A business advantage
I’ve recently begun to read Thomas Friedman’s book The World Is Flat 3.0: A Brief History of the Twenty-first Century. I purchased the book a few months ago, and it has languished on my coffee table along with three other books. Earlier this week, I finished one book, and thus opened up a slot for a new book (I generally read two books at a time, one fiction and one non-fiction).
While reading Friedman’s book, I came across an interesting memo from David Schlesinger, Reuter’s editor-in-chief. He makes an interesting point about globalization and off shore jobs.
…[T]he debate about work going to India, China and Mexico is actually no different from the debate once held about submarine work leaving New London [Connecticut] or shoe work leaving Massachusetts or textile work leaving North Carolina. Work gets done where it can be done most effectively and efficiently. That ultimately helps the New London, New Bedfords and New Yorks of this world even more than it helps the Bangalores [India] and Shenzhens [China]. It helps because it frees up people and capital to do different, more sophisticated work, and it helps because it gives an opportunity to produce the end product more cheaply, benefiting customers even as it helps the corporation.
…
[I]t’s time to think about the opportunity as well as the pain, just as it’s time to think about the obligations of off-shoring as well as the opportunities… Every person, just as very corporation, must tend to his or her own economic destiny, just as our parents and grandparents in the mills, shoe shops and factories did.
As I read this memo, I was reminded again what makes America so great. We’re a country founded on the principals of hard work. A country that is at its best when it’s pressed the hardest. So often individuals talk about the globalization of our economy and the outsourcing of our jobs as a bad thing. However, Schlesinger’s comments help to remind me globalization and outsourcing are actually opportunities for me to strive to do push our company to greater heights.
Within our company, we do almost no outsourcing of work to foreign countries. However, we have increasingly outsourced work to companies outside of our local areas. In fact, our designer is located in Virginia, and our printer is located in Indiana. Yet, our total turnaround time on print jobs has decreased to nearly one-third the turnaround time of our local designer and printer, and our printing costs have decreased. In fact, in some cases, our turnaround times have decreased to just under thirty-six hours as compared to nearly ninety-six hours or more with our local designer and printer. Not to mention the quality of the product has increased significantly.
One of the keys to success is as Schlesinger points out: [The] work gets done where it can be done most effectively and efficiently. With that in mind, I am continually looking for ways to get our work done most effectively and efficiently without regard to location. We do live in a flat world separated by a few clicks of the mouse button. To be successful, one must take advantage of the opportunities a flat world provides to us!
May 21st, 2008 at 9:44 pm
Outsourced to other countries won’t really hurt the business, it really does help out business establishments, most especially small business since outsourcing is really cost effective. There are so much countries who really take the risk of gaining success on outsourcing. And I agree with the title of this post Outsourcing is really a business advantage.
June 4th, 2008 at 12:17 pm
Joseph Stiglitz (Nobel winner for economics and was Chief Economist at World Bank) said while on a trip to India, that 600 million people from India (out of the one billion!) have been left out of the “development” fold of globalization. So, obviously, all India is not going to migrate into middle class, if anything the inequality is far, far worse now, after the advent of globalization.
Similarly newspaper reports have pointed out how Chinese workers are working in apalling conditions, to chhurn out the low cost products, with poor pay, cramped rooms, no accident or health insurance benefits, no job security, no overtime, long working hours - so who is actaully benefiting from this sort of globalization? Corporates ofcourse, and the few privileged people of India nd China who have been able to get educated in engineering and technology! Not the vast majority of population.
I would much rather the discourse on Globalization came from economists like Joesph Stiglitz , Paul Krugman (Princeton), Pankaj Ghemawat (Harvard)etc. Ted Koppel interviews Friedman and Joseph Stiglitz, who ofcourse doesnt find a mention in Friedman’s book.
http://select.nytimes.com/2006/04/25/opinion/25friedman-transcript.html?_r=1&pagewanted=all&oref=slogin
The small, but interesting book, by Aronica and Ramdoo, “The World is Flat? A Critical Analysis of Thomas Friedman’s New York Times Bestseller,” offers a counterperspective to Friedman’s.
It is a small book compared to the 600 page tome by Friedman, and aimed at the common man and students alike. As popular as the book may be, some reviewers assert that by what it leaves out, Friedman’s book is dangerous. The authors point to the fact that there isn’t a single table or data footnote in Friedman’s entire book.
“Globalization is the greatest reorganization of the world since the Industrial Revolution,” says Aronica.
You may want to see http://www.mkpress.com/flat
and watch http://www.mkpress.com/flatoverview.html
for an interesting counterperspective on Friedman’s
“The World is Flat”.
Also a really interesting 6 min wake-up call: Shift Happens! http://www.mkpress.com/ShiftExtreme.html
There is also a companion book listed: Extreme Competition: Innovation and the Great 21st Century Business Reformation
http://www.mkpress.com/extreme
http://www.mkpress.com/Extreme11minWMV.html
June 4th, 2008 at 11:22 pm
@ Concerned Citizen. Thank you for the comments, despite your anonymity.
My points revolve around outsourcing being a business advantage. I understand that there is a gap (widening) between the middle class and the lower classes of many countries. However, I would argue the transition from a society of relatively no middle class, to a growing middle class, despite the gap between the middle class and lower class, is better than a country without a true middle class. It is illogical to believe all members of a society can overnight move up to the middle class. It is a process, and a lengthy process. I believe globalization is the start of the process for the lower class of the developing economies of China, India, and other emerging countries.
I don’t doubt there are severe work conditions throughout emerging countries, and other non-emerging countries. Those individuals subject to the severe work conditions are not gaining physically nor mentally by the globalization. However, with increasing globalization, crimes against humanity (if you will) are gaining publicity, and with increased publicity comes increased scrutiny.
While I agree the economists you reference should be involved in the discourse on globalization, we no longer live in a world where the discourse is limited to only a select few - hence, the flattening, globalization of our world. To suggest only a select few should provide the discourse flies in the face of your comments about the widening gap between the haves and have nots.
Surprisingly, my reading of Friedman’s book is not an endorsement of his views. Rather, it is a reflection on my desire to better understand the world in which we live. I have previously read the NYTimes transcript you reference, and took the time this evening to reread the transcript. Thank you for directing me once again to the read. It confirms for me that there is not a clear cut outlook as you may lead me to believe.
At your suggestion, I will endeavor to read Aronica and Ramdoo. However, I note all your counter-perspective comes from that one source. If your implication is that I’m promoting a biased, one-sided view of globalization based on one book I’ve read (reading), the same could be said for you and your recommendation for one text and it’s supporting documentation as the source on globalization.