Coporate International Outsourcing Essay Example | Topics and Well Written Essays - 1250 words

Coporate International Outsourcing - Essay Example The firms that are involved in the practice should take the decision to offshore work only after serious consideration. Some companies’ outsourcing decisions have backfired and they had to reconsider their outsourcing mission (Ren & Zhou, 2006). DELL was forced to move back its OptiPlex desktops and Latitude laptops in November 2003 from India after complaints from customers of language difficulties and delays in reaching senior technicians. Lehman Brothers too had to shift their call center operations back to the US from India after they received complaints of service quality. There basically seems to be a lack of understanding of the economics of outsourcing. The call center supply chain strategy has not been studied. There are various costs that are not considered and people merely take into account the direct labor costs. Moller (2006) says there is a trend to export jobs to where it is cheaper and low-cost economies in Asia are receiving all the jobs. This article points out the problems that the developed countries may face when jobs are offshored to less developed countries. The new labor-cost efficiencies may not last for long and this is the main reason why firms outsource. In India, in cities like Bangalore and Hyderabad, there is already a shortage of skills and above average salaries are required to obtain and retain them. The impact of outsourcing on the LDCs has prompted many countries to make efforts and capitalize on the opportunity. King (2007) discusses how new economies are opening and marketing their countries in a bid to get a slice of the outsourcing jobs. Estonia, for instance, has been able to offer a pool of talented, tech-savvy workers and a modern telecommunications infrastructure. According to King, the global market for shared services and outsourcing is expected to grow to $1.43 trillion by the end of 2009, from $930 billion in 2006. Many countries are joining in the competition and it is expected that India’s dominan ce in the outsourcing market would be diluted. The author gives the important factors that make and sustain a location as an attractive destination for outsourcing. Apart from costs, the other factors include the education and language skills of workers, the availability of labor, and attrition risk. Political and economic environment are equally important. To remain attractive, the LDCs have to invest in improving technology and infrastructure. The telecommunications infrastructure has to be modernized. Technology has to be used by these countries to transform economies. It also requires changes in policies and procedures. The protectionist attitude has to be done away with if a country wants the total support from the outsourcing company. Kenya wants to become an attractive IT outsourcing destination and it has to liberalize its telecom sector. This indirectly helps the LDCs as competition in any sector drives the prices down as Kenya found in its telecom prices. The shortfall of talented labor can be envisaged in each of the LDCs and this issue has to be addressed by such countries to remain sustainable.               Ã‚