Heat on Outsourcing

Outsourcing/off-shoring is the 21st century modern global economy trends. It is something, sharing some work with other partner or company or an entity, which perhaps located other country/state from the main business location. The main purpose of outsourcing is to increase finance utilization and get more things done with less money. The main driver of outsourcing is currency inequality between two countries. After 2001/2002, tech bubble burst this outsourcing trend increased to several folds and more and more companies wants to “share” their work with foreign entities.

After 6-8 years, outsourcing IT industry losing steam for the first time, this company’s stock price and value started plummeting. Why is that? This should not happen? Is there something fundamental wrong?

1. Big mistake with human resource: The main asset of outsourcing company is brain. Unfortunately, nobody can make brain “out of the box”. It is naturally embedded with each human. So human is the main asset of outsourcing companies. How soon a programmer/engineer grasping new design/code and how soon he/she converting into meaningful document and how soon he/she transfer the knowledge to their peers and how soon they can deliver a work is the fundamental success of an IT outsourcing company. They all are young smart brainier professional, but as soon as these professional crossed ocean, out of their main work location for on site projects, their touch with HR would be reduced, literally no HR policy. No body cares about them, several HR violations; nobody asks some basic humanity needs; they are out of sync with their company. As a result, they try to jump in to other companies, de-motivated and always looking for other opportunities.

2. Business or domain knowledge: Growth is the main ingredient for business success but at the same time, domain knowledge is the main catalyst for sustainable business success. Lot of time outsourcing companies wants to capture market, they make lot of moves, didn’t allow people to be in same domain and allow them to become master of that domain. The excuse would be, hire a lateral domain knowledge candidate for that position, but reality is, that lateral candidate would take lot of time to adjust with culture to provide some value, by the time competitor take all business.

3. Politics: Workplace politics is okay, as long as all politics are for positive purpose. But with in outsourcing companies, politics range from state, language, color, region, religion, direction, social status, history, geography etc. None of these are positives, all are negatives and unbearable and highly unprofessional.

Comments

sukumar said…
Interesting observations Subba. I guess as the companies grow bigger and bigger, the human touch is beginning to go away.
thanks Sukumar...yes...that might true

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