Talk:Outsourcing

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[edit] Definition and Overview of Outsourcing

The article as it stands is a critique of outsourcing rather than a description of what outsourcing is and means to the economy. The structure of the economy changes when organisations become tightly coupled and dependent on each other for services and revenue. Outsourcing therefore has an impact on organisations as it changes their fundamental structure when they enter into an agreement to take services from a supplier. It is a major strategic choice to sell part of the business to an outsourcer and enter into a contractual arrangement for services that previously would have been performed in-house.

Refocusing the article on what outsourcing is, the process of outsourcing, the reasons for outsourcing, the contract between the client and the supplier, the organisational impact, the operational issues, the economic impact and not least the social impact would bring the overall quality up and lay the foundation for the critical analysis.

Amended the lead paragraph. The paragraph now contains the main elements – The Client, The Supplier, The Services and The Contract.

The second sentence is too long and also makes a number of points that may not be accurate. What does dynamically integrate mean? Is management control really shared – or is it governed in a different way? A contract is it the core of all formal outsourcing agreements.

[edit] Arguments for Outsourcing

When I came to Outsourcing I found that it was dreadfully one-sided. I have added arguments for outsourcing as a way to balance things out as well as provided links that support outsourcing as well as interesting links that are neither for nor against outsourcing. Check out the video by the Cato Institute I posted. It's very interesting.

I hope you enjoy! Knowledge-is-power 16:44, 27 September 2005 (UTC)

Riiiiight... and the article on the Holocaust doesn't have enough arguments >for< killing the Jews. How terribly one-sided!
I have rearranged things a bit in the other sections (moving some of the growth of outsourcing to general section not in criticisms, cleanup on the language of those sections, and maybe made it a bit less POV). I think overall the article reads somewhat more balanced, I think likely the best thing that needs to be added is more depth in the criticism area though - expanding on areas like the general low level of expertise of staff particularly in areas where outsourcing has grown rapidly, or where continuous (sometimes two way) information transfer between the outsourced task and the core business are required. I havent really read the arguments for section added in any detail so can't really comment on areas that might benefit from expanding yet. Sfnhltb 18:00, 27 September 2005 (UTC)

I agree that the tone of this article is far too one-sided, and reads a little like the rant of someone recently laid off! However, I think we might just be able to make a purse of a sow's ear. I've made a couple of limited changes where the discussion of the economic evidence was factually inaccurate or very misleading. I'm an economist, so have not made any changes to those passages with more of a corporate / management focus. I think bit by bit, we might just be able to make a reasonable article here. In terms of outstanding work, I think an essential part of the introduction needs to set out that international outsourcing (or 'offshoring') is effectively the trade in intermediate services, and thus recent developments mirror the trade in intermediate goods that typified the industrial restructuring of the 1980s. Placing outsourcing into the wider debate on trade would give an important context.--Nmcmurdo 21:01, 1 October 2006 (UTC)


Nmcmurdo, I reverted your edits to the "criticisms of outsourcing" section because they more appropriately belong in the "responses to criticisms" section. Feel free to present your arguments against criticisms there (i.e. factual economic evidence). However, remember that perspectives on "outsourcing" are not restricted to the realm of economics. NewTools 22:25, 12 October 2006 (UTC)

[edit] Top

This didn't help, the word 'outsourcing' is kind of sidestepped here. I would also like to know more about the connection to economics...

Outsourcing is more of a management term than an economics one. If you want to look at the firm's production domestication decision from an economic point of view you might be best to look into transaction cost analysis. mydogategodshat 05:58, 18 Feb 2004 (UTC)
I agree, economists tend not to use the word 'outsourcing', however it is effectively analysed using well-known economic approaches to contract theory and (in its international aspect) work on trade.--Nmcmurdo 21:04, 1 October 2006 (UTC)
"Effectively analyzed"? Hardly. Let's just say "outsourcing" can be analyzed using contract theory and work on trade. Organizational or Network theory may be more effective than economic approaches because economic theory is not equiped nor designed to handle qualitative changes in the conditions of capitalism or different phases of capitalism (i.e. liberal capitalism, state capitalism, transnational capitalism ect...). NewTools 22:49, 12 October 2006 (UTC)


I think this site has a lot of outsourcing information and links to other research sites about Outsourcing. IS outsourcing is its main focus though... http://wrobinson.cis.gsu.edu/wnr/cis8310/CIS3310/StudentProjects/ISOutsourcing/tabid/314/Default.aspx 131.96.2.208 01:53, 29 November 2005 (UTC)

[edit] Help on Term paper

Hello, I'm a college student of Puerto Rico. I have an Economics class this semester and the professor has asked us to turn in a term paper. Mine's about "Outsourcing telecommunications industry and the labor market". Now, I'm not majoring in Economics or Business, so I'm kind of confused with the topic I'm supposed to cover. I read the definition of "Outsourcing" and it has helped a bit, but I still don't know what it means exactly. If there's anyone out there who KNOWS about this stuff, I'd appreciate it greatly. *I'm not asking anyone to do the job for me, just update me with my topic and some extra-extra help* Thank you. --208.20.13.223

Well, we normally don't help out with homework here, but I can help out a little. The term "Outsourcing" is used in different manners. Sometimes it means getting a job done by an outside company (such as janitorial services) rather than having the job done internally (by employees). Poo
The other use of the term refers to getting work done in cheaper labor markets. For example, an employer might lay off all his domestic employees (such as in the US) and hire employees who'll work for less, say in India or China. This is a hot topic right now as US employers are laying off employees in droves and hiring less expensive employees overseas. For some jobs, employers can hire 8 off-shore employees for what it pays one domestic employee (e.g. 8 * $10,000/year = 1 * $80,000/year).
So, what I think your prof wants is a report talking about how outsourcing is affecting employees in the telcomm market. I think they're getting laid off and they don't like it! :-) Your report may need to focus on both uses of the term or only one. HTH — Frecklefoot | Talk 14:55, Sep 10, 2004 (UTC)

The first definition "getting a job done by an outside company rather than having the job done internally" is correct and the second "getting work done in cheaper labor markets" is exactly the same as the first. The only reason why firms move tasks out-firm instead of doing it in-firm is to lower costs (assuming equal quality). For example, a family's decision to hire Jim's Mower to do the lawn instead of doing it himself is outsourcing because doing the job himself will cost more, not only in terms of excplicit costs but may in terms of opportunity cost or cost of effort.

See [Investopedia's definition]: "A practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally." There is the only definition! There is only one definition. Outsourcing has always occured because it is a natural by-product of free-market trade. For example, the Ford Motor Company may outsource production of its gearbox to, say, Mitsubishi. Individuals and firms have been outsourcing for ages but controversy was attached to the word "outsourcing" during the Globalization Revolution when firms started outsourcing with foreign firms. Of course when foreigners are involved then politicians see an opportunity to exploit xenophobia and hence today we see John Kerry opposing outsourcing and immigration. Such is human nature!

Send me a PM or something if you need help with the essay. I'm an economics (and math) major.

Knowledge-is-power 17:03, 27 September 2005 (UTC)

I have to disagree with the economist. Outsourcing is an organizational concept not an economic one. That means you need sociology not economics. Instead of asking what is being outsourced (ie work), you should ask who or what is outsourcing and why. Corporations outsource and they do so for various reasons. The corporation has a purposive-rational idea underlying it. That is, the corporation has formal rational ends (ie profits) and attempts to control the substanative ends of the agents that make up the organization (ie people do not want to spend fifty hours a week working, they would rather be doing other things). So, the purpose of the corporation is to pursue profits while controling as much as possible substantive ends of its memebers. The goal of the corporation is not to simply reduce costs. It searches for efficiency, calculability, and predictability. Outsourcing is now a reasonable way corporations achieve their ends. (69.138.155.179 06:07, 28 September 2005 (UTC))

The assumption in economics is that the corporation pursues profits. Reducing cost is not the only way it can do it but it is certainly one way it can do it.

Outsourcing may be an organizational concept but it is also an economic one. I suppose any topic can be studied from many perspectives. Economics can certainly give useful insights into outsourcing. Knowledge-is-power 09:26, 6 October 2005 (UTC)

Hi help on termpaper. When you take jobs and outsource them enmasse to other countries you lose all the tax revenue that the citizens who used to perform those jobs once paid (not to mention the fact they are now unemployed and if their industry is undergoing mass outsourcing then they may end up starting over from scratch at a much lower paid job in an entirely new industry).

For-profit corporations primarily exist for one reason: to increase shareholder wealth. They will do whatever is legally permitted to accomplish this. And they will do so with an eye toward accomplishing it in the short run.

If coporations can increase shareholder wealth by outsourcing, and it is legal to do so, they will certainly engage in the practice.

People are simply a resource to for-profit corporations. And resources are exploited in the quest for shareholder profit.

If outsourcing entire sectors of the economy leads to greater shareholder wealth, they will certainly do it.

But outsourcing has a face. The outsourced job that the person in a third world now has is happy. The unemployed person abandoned to their own devices in the USA who may not be able to get another job in a diminishing sector and their pain and struggles is the other side.

[edit] POV text

A portion of POV text was added by an anon user to the bottom of The international context. It appears below. Not all of it is POV, but enough of it is to warrant it (at least temporary removal). If you want to give a shot at NPOV'ing it, here it is:

Also, companies are able to foray into newer avenues, and accept more business with lesser margins, which were earlier restricted by the high cost of labor for them.
Also, when a country puts in restrictions on outsourcing by introduction of draconian laws, the country will have to face the long term consequences. This is because, such a protectionist attitude, will make them less cost-effective against other countries in the world which are open to such outsourcing. A clear example for this trend would ironically be India itself, whose protectionist attitude against foreign companies till the early 1990's resulted in it growing at a lesser rate vis-a-vis the other Asian countries. But with the liberalisation in 1990s India has gained rapid benefits, and is now threatening the so called super-powers by gaining rapid inroads into their markets as well.

Good luck. The first paragraph above was tacked onto the end of the last paragraph in the section. — Frecklefoot | Talk 17:08, Sep 27, 2004 (UTC)

[edit] Needs some rewriting

The "international context" is a mixed bag of positive and negative comments. While all of them seem to be true and related on topic, some of them sound like they are really geared towards one of the "sides" of the story. Also, it looks like people added one paragraph after another and there's no connection on the text. I won't touch that - I'm not that versed in the subject - but I really think someone more able should do a bit more rewriting on that, hopefully achieving a higher NPOV state. --zeh 19:00, 3 May 2005 (UTC)

"...to develop competitive strategies that will leverage their financial positions in the ever competitive global marketplace". Why is this manegerial talk in a Wikipedia article? IE What that @#$% does "leverage their financial positions" mean. Can we hav eit in straight English????

[edit] Questionable addition

An anon user added the following text to the "See also" section:

  • 75% of outsourcing company project fail and 100% have yet to complete a project meeting all objectives - Reuters

It would have been a valuable addition if the user had actually cited to source, instead he just pasted in the headline. Of course, however, the link actually belongs in the "External links" section. As it is, it was worthless. If anyone can find the actual article this user attempted to cite, please add it in. — Frecklefoot | Talk 15:35, Dec 6, 2004 (UTC)

Just my opinion, but it wouldn't matter IF most instances of outsourcing are failures. Most businesses collapse and only the best survive. But that is no reason to ban business. Just my 2 cents. Knowledge-is-power 16:48, 27 September 2005 (UTC)

[edit] Encarta

Need proof we rock, Encarta sucks? They only just added an article on Outsourcing, mid-April 2005. -- user:zanimum

[edit] Data with no source

"According to a recent Zogby International poll, 71% of Americans feel that outsourcing is bad for the nation's economy. But " - removed this because no link was provided. also please note the apparent contradiction in the statement "international poll, 71% of americans"! Please explain more clearly... --70.112.18.109

Okay, if you promise to sign your posts. I added your signature above. You can sign your posts with 3 or 4 tildes (~~~ or ~~~~). Peace. :-) — Frecklefoot | Talk 14:33, May 6, 2005 (UTC)


-->The name of the pollster is Zogby International poll, which happen to poll Americans on outsourcing. It is not an international poll on outsouricng but an international pollster organization! This should be more clear to you. Here is a quote from one of my term papers:

"A Zogby International poll reports that 71% of American voters believe that “outsourcing jobs overseas” hurts the economy and another 62% believe that the US government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes for such companies."

Source: See Zogby International survey results online at http://www.zogby.com/news/ReadNews.dbm?ID=870.

On Method: "The telephone survey of 1,011 American likely voters was conducted from August 12 through August 14, 2004. Likely voters were chosen at random nationwide from listed residential phone numbers. The margin of sampling error is +/- 3.1 percentage points. Margins are higher in sub-groups."

Source: See above source.


160.36.195.107 04:07, 26 September 2005 (UTC)

[edit] NPOV

The politics section asserts the benefits of outsourcing are "illusory", and includes one oversized quote advancing the opinion. A contentious one-side of the debate.

lots of issues | leave me a message 13:02, 21 August 2005 (UTC)

I would suggest that most of the individual sections of the article are one-sided. Until reaching the politics section, a reader is not informed that "outsourcing" means one thing to management figures and another entirely to labor figures; the reader is only informed from a managerial perspective, rather than a neutral standpoint. This shifts to a noticably different POV - that of a political commentator - in the "Politics" section with the severely oversized quote. I'm afraid it's not just the Politics section that could use some careful adjustment to become NPOV, though. Balancer 02:37, 5 September 2005 (UTC)

[edit] Benefits of Outsourcing

Restrucutred this section to remove the redundant text and focus on stating the benefits. This could be further refined by subsections for Client, Supplier and Economic Brodger3 15:37, 8 August 2007 (UTC)


[edit] Criticisms of Outsourcing

I placed the following in the overview section because it seemed to be more of an overview of outsourcing rather than a discussion of its criticisms ,though the last sentence could be considered an implicit criticism of "company policy" meant to conceal the use of foreign labor:

"The term "outsourcing" became more well known largely because of a growth in the number of high-tech companies in the early 1990s that were often not large enough to be able to easily maintain large customer service departments of their own. In some cases these companies hired technical writers to simplify the usage instructions of their products, index the key points of information and contracted with temporary employment agencies to find, train and hire generally low-skilled workers to answer their telephone technical support and customer service calls. These agents generally worked in call centers where the information needed to assist the calling customer was indexed in a computer system. The agents were often not able to tell the customer they did not actually directly work for the original manufacturer. In some cases, the agents are not allowed to even give out their real name."

Also, I am new at adding content and do not know if I am following proper procedure. I suppose I should read the help links but if something I am doing violates some formal or informal rules, then please let me know. (03:55, 2 November 2005 (UTC))(03:54, 2 November 2005 (UTC) J-Guy)

The productivity secion does not make sense - what is non-real productivity - tried to find it on the web but best hit is this artlice! Surely from a CEO perspective getting the same result for less money is greater productivity for their organisation - regardless of the tools or salaries used. The argument seems to be if it is not automation then it is not real? Brodger3 14:54, 10 August 2007 (UTC)

"It is difficult to argue that outsourcing has a detrimental effect on individuals who face job disruption and employment insecurity" - I have changed the word "argue" to "dispute" because it's easy to argue that outsourcing has the detrimental effect. This may be down to differing US-UK uses of English (I am British). Also I've added "its supporters believe that" to "outsourcing should bring down prices, providing greater economic benefit to all" because its opponents would disagree (I am critical of outsourcing but am trying to make the article sound neutral). JohnG62 14:52, 7 November 2007 (UTC)

The "Public Opinion" section is completely understated and whitewashed. Half the paragraph is sans reference and the last part: "A study has attempted to show that public controversies about outsourcing in the U.S. have much more to do with class and ethnic tensions within the U.S. itself, than with actual impacts of outsourcing." is laughable on its face and is given completely out of context without the results of the so-called study. The study seems to be a paper and reeks of defensive spin from an outsourcing proponent (the author is apparently Indian, although that of course doesn't mean anything in and of itself). News story after news story, newspaper article after article, shows the general public reaction to outsourcing couldn't be more negative, and this is clearly tied to lost jobs and/or slimmer job prospects for domestic workers. —Preceding unsigned comment added by Chrism07924 (talk • contribs) 05:54, 25 May 2008 (UTC)

[edit] Responses to Criticisms

I agree with the economic view of insource/outsource but is the second part is describing the net flows of offshoring? Should this arguement not be moved to the offshoring article?Brodger3 15:46, 9 August 2007 (UTC)

Is the reference to “Outsourcing” and “Saving Jobs” by Thomas Sowell useful to the arguement or can a better reference be found other than this editorial? Brodger3 15:56, 9 August 2007 (UTC)

[edit] Conflating outsourcing and offshoring

A lot of this article is conflating outsourcing and offshoring, discussing issues specific to offshoring as if they were inherently part of outsourcing. Outsourcing is simply moving the provision of a product or service from internal production to external production---for example, instead of hiring janitors myself to clean my office's floors, I hire a janitorial company to take care of it. Of course, offshoring is a subset of outsourcing, but the terms are not syno nymous. A more careful distinction should be made, and issues specific only to offshoring moved to that article. --Delirium 10:21, 29 November 2005 (UTC)

Actually, the difference between outsourcing and offshoring is more distinct than offshoring merely being a subset of outsourcing. Offshoring is related to outsourcing in that it includes the movement of work from internal production to external production overseas. However, it differs from outsourcing in that offshoring also includes the movement of work from internal production to internal production overseas. For example, Microsoft in Redmond sending work to Microsoft in India or China. This would not be considered outsourcing since the work is still done in-company, but it would be considered offshoring. Vicissidude 00:31, 12 January 2006 (UTC)
The article does need splitting with offshoring comments moved to the relevant article.Brodger3 13:48, 9 August 2007 (UTC)

[edit] Lecture critique?

The link to this lecture on managing an outsourced project was removed with the comment "rv - remove consultant's personal links".

I'm an author, not a consultant, and the chapter that lecture was based on was reviewed by several outsourcing professionals and published by a reputable publisher (O'Reilly). Our book, Applied Software Project Management, has been extensively reviewed and has been adopted as a graduate textbook at the Catholic University. Personally, I've done guest lecturing for classes in the MBA program the Tepper School of Business at Carnegie Mellon University on project management, outsourcing and process improvement, and I've gotten positive feedback from the faculty there. My coauthor is an experienced outsourcing manager who has managed multiple large-scale outsourced projects. I hope that means that we're qualified to contribute.

From what I can tell, the contents of that lecture fit in well with the other external links. If there's something that is factually incorrect in it, my coauthor and I would appreciate feedback so we can publish an errata.

If you are an author why don't you contribute some text rather than linking to your own site? Jgritz 21:36, 15 December 2005 (UTC)
Also see - Wikipedia:External links#What_should_not_be_linked_to - Links that are added to promote a site, by the site operator or its affiliates. Jgritz 22:12, 15 December 2005 (UTC)


Hi! It's Andrew again, Applied Software Project Management author. I just want you to know that I have been contributing! I've made substantive changes to three different topics so far, and my coauthor and I will keep adding more. We really want to help people learn about software engineering, management and outsourcing! Yes, we've got a book, and yes, we obviously want it to sell well. But that's not why I started contributing. I was truly bothered that there are pages on Wikipedia that are basically empty, but which are ostensibly about topics that my coauthor and I put a lot of effort into researching. We have a lot to add, and we've started to add it! And I promise we'll add more.
Here's an example. The Wideband Delphi article was almost entirely empty before I got to it! Take a look at how it looked before I edited it -- pretty sparse, right? There was no body text at all! There was just an external link to Karl Wiegers' excellent article, Stop Promising Miracles. Karl writes about Neil Potter and Mary Sakry's repeatable WIdeband Delphi process. Luckily, as it turns out, Neil Potter was one of the technical reviewers on our book! So I added an overview of their process to the page. It's still not great, but at least now it's not empty!
Also, thanks for pointing out that rule about adding links to promote a site -- we'll refrain from posting links to the home page for our site. As I read it, it's within bounds to post links to our own information if it's relevant and informative. And there is definitely some substantive information that we'd like to share, but which we we can't simply post because our publisher, O'Reilly, owns the copyright. For example, if you look at the bottom of the Wideband Delphi article, you'll see that I linked to a more detailed overview of the Wideband Delphi process that we host on our site. I think there's evidence that this link meets the standards of the "External Links" rule. If you look at Wiegers' article and the process overview on our site, you'll see a lot of similarities. (You'll also see a table from the Process Group that we used with permission -- more information we can't add to Wikipedia due to copyright restrictions. So our choice is to either leave the link in, or remove it and not include that information at all. Adding it to the article itself is not an option.)
Anyway, I did do my best to comply with the "External Links" rule. It says that contributors should refrain from adding links to "any site that does not provide a unique resource beyond what the article here would have". So I made sure to only include links that provide unique resources beyond what's in the article, and which contain copyrighted information that I cannot add to the article. I removed a link to our website's home page from the Wideband Delphi article. I recognize that there was no good reason for that link -- it was just promotional. So I deleted it. But I left the link that actually contains real information that could be useful to people who need to learn about Wideband Delphi. I hope you think that's fair and in line with Wikipedia rules! If not, let me know, and I'll adjust accordingly. I'm obviously new to this, and I want to respect the rules here. But I also want to share all of the information that I have!
Here are other pages where I've made substantial (and hopefully informative!) changes: Software Inspection, Development stage. Again, I removed promotioal links from both of those pages which I previously added. However, I left in a link to Review and Inspection Practices on the page on software inspections, because there's information that I believe is relevant but which I can't post due to copyright restrictions. Again, as far as I can tell, this complies with the spirit of the "External Links" rule! I hope you get a chance to take a look at it -- we really put a lot of effort into giving readers a lot of information so that they could implement inspections and reviews on their own software projects.
Thanks again for your help! I hope this is what the Wikipedia community means by collaboration. I really do want to be a good citizen here!
AndrewStellman 06:53, 16 December 2005 (UTC)
Sorry to come on a bit hard, but there's a glut of spam links going round at the moment, so I tend to pretty much chop links if they're from relatively new contributors. BTW - your site is interesting and of good quality - removing the link in no way reflected the quality of your work. Anyway, thanks for the contributions, they help a lot. Thanks! Jgritz 06:58, 16 December 2005 (UTC)


outsourcing and offshoring also differ greatly in the way they affect the economy of a country. this is an aspect which is often not looked into. while offshoring can lead to the development and flourish many sectors in the country where work is offshored to,it also benefits the country which offshores work. Outsourcing differs in this aspect. Outsourcing helps in creation of jobs,increase in economy,etc in the coutry where work is outsourced to while reducing job oppurtunities in the country from where work is outsourced. for example let us consider Microsoft offshoring a part of its project to its office in India. all that is happening here is that microsoft is exploiting labour for cheap which is available in India. no doubt it is creating jobs in India but then all that the Indian techies are doing is helpin microsoft get work done for cheap. how does India benefit from this ?? nothin more than having swanky buildings on its land and a few taxes on whatever. but then microsoft wouldn't mind a few taxes instead of paying techies in the US who dont come for cheap. so microsoft grows and in turn America. on the other hand outsourcing not only creates jobs but also builds the economy. for example consider a company outsourcing its calls to India from the US. this creates call centres in India,in turn jobs. though this is very similar to offshoring it differs in who gains the maximum from it. here India is doing work which was supposed to be carried out in the US. India benefits by stealing these jobs from the US thus creating a new sector of economy for itself. the US is no longer a profitable option for a call centre. hence this job sector has just vanished from the US. and this is just one example. so outsourcing builds a developing country's economy by stealing jobs from a developed country, while offshoring benefits the latter better. not that offshoring is of any harm except that a developing country would be working indirectly for the economy of the developed one. thus if a developing country needs to build its economy it should definitely encourage outsourcing more than offshoring.

[edit] EDS

Is there any evidence that EDS was the first company to outsource or is this simply an advertisment? (68.47.165.126 00:09, 25 December 2005 (UTC))

[edit] Seems pretty American

I don't know if the author knows, but Outsourcing is not only done in the US. The approach is one-sided and badly structured, negative and positvive aspects mixed, and as I said, only from the US-point of view. It definitely need some improvements, especially in the 2nd part...

This is an English Encyclopedia. The largest English-speaking country in the world is the United States. The vast majority of the readers are American. And, more importantly, the vast majority of the editors are American. If you want to add a more international view, then add it. Make sure you add your contribution to the correct category though. Vicissidude 18:46, 24 January 2006 (UTC)
Wow. That was quite ignorant. But to some extent he's right, it's difficult for us to write about countries other than our own. If you could add information about outsourcing in other countries, it would be much appreciated. 66.229.160.94 05:06, 3 August 2006 (UTC)

Hmm. Isnt the largest speaking country in the world India?

[edit] Drezner

From Benefits of Outsourcing:

Professor Drezner reports that for every dollar spent on outsourcing to India, the United States reaps between $1.12 and $1.14 in benefits. Drezner also points out that large software companies such as Microsoft and Oracle have increased outsourcing and used the savings for investment and larger domestic payrolls.

Who is this Professor Drezner?! He is mentioned without any reference. He is only mentioned under this section. He doesn't seem to be in the external source nor the references. Googling his name would seem to come up with Daniel Drezner, professor of political science at the University of Chicago who has published a number of materials regarding this topic. Janechii 10:09, 10 May 2006 (UTC)

[edit] An IT Industry Rises in Pakistan

technewsworld.com

May 17, 2005.

Tech News World By Athar Osama

When it comes to , the "image" belies the reality and seeing is believing. From the shadows of a misplaced image has thus emerged an innovative strategy that seems to do the trick for 's IT entrepreneurs. This might just be the right kind of "break" the country's software industry needs from its rather lackluster past. is fast becoming a happening place for IT.

Read More @ An IT Industry Rises in Pakistan

[edit] 4 steps to global teamwork

Courtesy Maair Ventures Offshore Business Processing Solutions

Business Process Outsourcing (BPO) is a four step process. Through the first phase we assess the nature of the process to outsource. An associate may visit the client onsite to review documentation process and training materials.

Once a mutual agreement is reached with the client, there is a transition period in which Company builds the offshore client team and finally a parallel run stage where a dedicated team works live to support client processes.

1. Assessment Review the nature and viability of the processes that the client seeks to outsource. Client describes the nature of process to outsource and Maair provides a sampling and a unitized cost. A Maair Ventures associate may follow suit with a visit to the client office to finalize an assessment and potential outsourcing documentation report

2. Transition Hardware allocations and preliminary outline for client operations Document the processes Recruit analysts for client Design, procure and deploy technology and bandwidth to access client systems as required

3. Parallel Run Migration of processes to the offshore location while ensuring that interdependent processes are not adversely affected. A parallel run of onshore and offshore processes is executed maintaining continuity of operations while onsite processes are ramped up

4. Steady State Service Level Agreement Security and Business Continuity Metrics for tracking and reporting Continuous Performance Improvement Human Resource Management

[edit] Need some advice on whether the following sites should be on the page

Hi all. I added the following links to the entry, but they got removed. Would appreciate your advice on why they might or might not be appropriate: An Outsourcing Journal article that talks about the tradeoff between cost reductions from outsourcing and the cost of errors. The complete article is at http://www.outsourcing-journal.com/sep2006-barnard.html and a related site is at www.totalcostoferrors.com. What I found interesting is the case study which talks about how a 0.1% increase in errors wipes out the benefits of the 30% reduction in labor costs due to outsourcing. Is this not valid content for the Further reading section? Please advise.—Preceding unsigned comment added by Bpo student (talk • contribs)

Hmmm. Outsourcing Journal looks at first glance like a trade journal, until you notice it's actually produced by an outsourcing company, Everest Partners. The article itself is written by the staff of a company called Beyondcore. A look at totalcostoferrors finds it's a forum owned and maintained by, remarkable coincidence, Beyondcore.
Let's keep citations to independent newspapers, magazines and academic publications. Citations from people directly in the middle of the business are not likely to be WP:NPOV on a sometimes contentious subject. Fan-1967 04:50, 13 October 2006 (UTC)

Thank you for the feedback. I can understand your perspective better now. However, as you can see from the author profile, George Logemann ran the Yankee Group's outsourcing practice at one time, and Outsourcing Journal is actually the largest website on the topic. Is the focus on the quality of the ideas and the research, or is it about the location of the content?—Preceding unsigned comment added by Bpo student (talk • contribs)

Look, many people think outsourcing is a great thing. Someone who ran Yankee Group's outsourcing practice would likely fall into that category. So would every single word from every single person you would find on either of those websites. There are, you may be surprised to find, people who don't think outsourcing is the greatest thing since sliced bread. You would not find such views on those sites. Stick to independent sources. To put it another way, observers of the industry, not participants. Fan-1967 04:59, 13 October 2006 (UTC)

Got it. Interestingly enough I thought the data in the article (0.1 percentage increase in erorrs wiping out the benefits of a 30% decrease in labor costs) was actually highlighting problems with outsourcing rather than being pro-outsourcing ;-) The rational outsourcing blog run by the same people seems to be less than blindly pro-outsourcing. Anyway, I will drop this because in general your perspective might be better for wikipedia. It would be very difficult to review every external link and confirm the lack of bias of the content. Thank you for your advice.—Preceding unsigned comment added by Bpo student (talk • contribs)

On talk pages and in discussions, please sign your posts by typing four tilde's (~~~~) at the end of your entry. It will translate to your user name with the date and time. Especially when numerous people get involved in a discussion, it really helps to see who said what when. Fan-1967 13:30, 13 October 2006 (UTC)
Another issue to think about is that, in general, even when the links are not directly commercial, I'm always a little leery of linking to a site that's run by someone who's got something to sell. God knows there are enough outsourcing companies that have tried to place blatant commercial links in this article. I'm reluctant to include links that might be construed even as indirect links to a commercial vendor. If other sources are available (and clearly there are numerous sources available here) I'd rather err on the side of caution and stay away from anything that might conceivably look commercial. Fan-1967 13:27, 13 October 2006 (UTC)

[edit] Parts of "Criticisms of Outsourcing" are outlandish and opinionated

Read below, some of the statements are outlandish and unsubstantiated.

Although producing in-house goods or inputs can be higher quality in some cases, banning outsourcing because of lackluster quality of good may have drastic effects on people's quality of life. For example, suppose an average man may buy a car, such as a Chevrolet, from General Motors. Suppose, however, he finds that the car is of poor quality and he is not the only one. Many others consumers find the product poor. They complain to the government and the government bans outsourcing. Therefore, every individual must make his own car. He is not allowed to outsource the task to a separate company. In fact, if outsourcing were banned, technically speaking any individual cannot buy food from McDonald's. The task must be done in-house by the man himself. He must make his own TV, make his computer, and so on. Every individual would have to be self-reliant and all trade would break down and the capitalist economy would be non-existent.

In practice, most calls for protectionism come from vested interests - sections of a country that would benefit at the expense of the rest of the country. So there's often no serious attempt to justify calls for protectionism in terms society's overall welfare (because usually such arguments are unsustainable!). Instead the vested interests typically try to persuade Government on the basis of what would happen in particular politically-sensitive states, constituencies etc. or with stories of how the media might react (often irrationally!) to cases of jobs 'destroyed' by foreigners (imports, outsourcing, migrants etc.) --Nmcmurdo 23:17, 24 October 2006 (UTC)
However, whilst I agree with you on this point, I don't like the text you've added to the article! The first and major reason is that it is out of context. The prior text does not raise the issue of "banning" or of other protectionist measures directly. Indeed discussion of the policy response and the existence or otherwise of capitalism (!) do not belong in a sub-heading on 'Quality of Service'. The second and more minor reason is that the pedagogic, hypothetical style you have used, whilst I admit consistent with some of other parts of this article, is not really an encyclopaedic style. Can I suggest you remove this text? In the meantime, I have identified the glaring problems (viz. unreferenced weasel word arguments) in the text above. --Nmcmurdo 23:36, 24 October 2006 (UTC)

[edit] cleanup

Some individual sections were marked as needing copy-editing or expert review, but IMHO this whole article is pretty bad. I don't have time at the moment to give this the overhaul it deserves, so I've just added {{cleanup}} for now. Neilc 03:52, 25 October 2006 (UTC)

I agree the articl is pretty bad. I removed the "types of outsourced work" because supposedly any "non-core" activity of a firm can be "outsourced". If the author presented some sort of evidence on the type and amount of work most likely to be outsourced by todays firms, then I would not have deleted the section. However, as it stands, the types of services and work listed by the author seem suspect and arbitrary. (68.47.165.126 19:22, 25 October 2006 (UTC))

This article would be cleaner if it focused on what outsourcing is rather than discussion what it is not. The offshoring discussion should be moved to the relevant article. In the industry outsourcing and offshoring is not used interchangeably as it confuses potential clients on the business solution being offered. Offshoring is only one potential solution available to the outsourcer.

Control is not shared as described in the article, the client remains in charge. The relationship is formalised in a pre-defined contractual agreement. --Brodger3 17:19, 30 July 2007 (UTC)

[edit] Knowledge is Power: TALK

I had to clean up the mess you created. I'm not saying that your arguments are not valid but that they are not logically placed. If you want to discuss your arguments here, make the issues you take exception to more explicit, then we can make a decision on how to properly place them in the article. We are trying to clean this thing up and you are not helping. Remember, criticisms of outsourcing do not translate into hatred of outsourcing or calls for its banishment. It simply means that the changes taking place are not in sync with the prevailing values of society as some people see it. You say "outsourcing" is good for prosperity but others say that this prosperity comes with costs. You can't deny that these people see costs, if they see costs then they see costs. Costs are culturally defined. I think you may have a strong argument for why these costs are not as severe as the critics claim, or that the benifits by far outweigh these costs. If this is the case then you should place your comments in the responses to criticism section. (NewTools 21:09, 8 November 2006 (UTC))

I don't think I've done anything wrong. I've contributed to the article. I don't object to your trying to clean it up. I think it would be good if my ideas were expressed but maybe I've placed certain ideas in wrong areas. I'm not really trying to be pro-outsourcing or anti-outsourcing, which is why I didn't place the ideas in those sections. Rather, as you may see, I'm trying to think of outsourcing in terms of a general economic theory that sees outsourcing as just another branch of capitalist free trade. Outsourcing is just a natural, logical consequence of normal free-market trading, but by watching FOXNEWS the average person may get the idea that outsourcing is only selling things overseas. The spatial location in terms of political boundaries of a particular economic transaction is not related to the actual concept of outsourcing as I know it, and this is what I'm trying to illustrate.Knowledge-is-power 14:44, 11 November 2006 (UTC)
All I'm saying is that you need to flesh out your ideas and put them in a logical spot. You DID place your ideas, which were responses to criticisms, in the "criticism of outsourcing" section. General economic theory is all about the benifits of outsourcing. Place your comments there or in the responses to criticisms page or create a section titled "outsourcing as free trade". Also, the spatial location issue you are trying to address is discussed in the introduction and overview sections at the beginning of the article, rest assured. Also, why is wikipedia supposed to correct FOXNEWS's portrayal of outsourcing? You are going overboard there. And I doubt FOXNEWS portrays "outsourcing" as "selling things overseas". Outsourcing is more likely to be portrayed as "buying goods and services" from an outside supplier, which is more of a problem if the outside supplier is in another country, or it may be portrayed as transfering jobs to another company which may become problematic when the jobs leave the country. You need to think through your arguments before you place them in the article, otherwise you'll be considered a vandal - i.e. you are either making poor arguments but don't realize it or trying to vandalize the page. I'll assume the former but don't rule out the latter. (NewTools 23:13, 12 November 2006 (UTC))

[edit] Outsourcing versus DOL

A division of labor in society is not outsourcing - e.g. buying McDonalds food does not mean that you are "outsourcing" your production of food. It simply means that there is a division of labor in society. What is at issue in terms of "outsourcing" is the organizational control of that labor, also expressed in terms of economic resturcturing. To say that McDonalds "outsources" its production of tomatos is ridiculous because it has never controlled the produciton of tomatos inside its corporation. It is not taking on a form of economic restructuring with its purchase of tomatos. If you take exception to this then please say so. (NewTools 21:32, 8 November 2006 (UTC))

Okay, maybe you can educate me or clarify the issue. We can discuss this here. Suppose a school lets a private firm from outside run its canteen. Now suppose an individual buys food from a restaurant instead of making food himself or herself. Economically speaking, these two cases are analogous. We have situations whereby individuals or firms are delegating tasks to others instead of doing them in-house. This is done for division of labour, so that firms or individuals can specialize and exploit gains from trade from specialization. Now just because something is economically analogous it doesn't mean most people see it that way. The general public can judge things based on purely superficial characteristics--such as whehter it's an individual involved or whether it's a firm involved--and based on these superficial characteristics can categorize according to perceived differences even through there may be inherent underlying similarities. This may be the case with the word "outsourcing."
You seem to be saying that a firm needs to control some task and then take it out before it is classified as "outsourcing," right? Therefore if McDonald's buys tomatoes straight away from a tomato supplier then it's not outsourcing. However, if McDonald's tries to make its own tomatoes and then decides instead of buy from the tomato supplier, it's outsourcing?
Knowledge-is-power 14:35, 11 November 2006 (UTC)
I'm saying that "outsourcing" blurs the lines between markets and hierarchies. It is highly ambiguous as you rightly point out. So, I'm suggesting that we should not define it solely in narrow economic terms, such as trade or the buying and selling of services. Outsourcing is a condition of changes in "bureaucratic capitalism" that transcends these simple market categories. I'm not saying these categories are wrong but that outsourcing cannot be synonymous with them. To take the issue of trade, for example, Ford Motor company may save money by shifting production of pistons from the U.S. to China. But is it "trade" if the production is still controlled by Ford. Transnational corporations, by definition, have operations all over the world. But if the operations are controlled by one corporation then how does the category trade make sense? Trade, in the classical sense, only is comprehensible under national circuits of production. What is happening now, which outsourcing is a part of, is that these national circuits of production have given way to a new global circuit of production, rendering old economic categories inadequate for the explanation of all economic activity. This is what I'm saying in a nutshell. What do you think? (68.47.165.126 00:32, 13 November 2006 (UTC))


I think a distinction can be made between outsourcing and normal trade but I think outsourcing is a subset of normal trade and so outsourcing is trade and as such all the benefits of trade are conferred onto outsourcing but not the other way round. There are superficial differences but inherently outsourcing is just a free-trade issue. Foxnews and others seem to distinguish trade from outsourcing and then demonize the word "outsourcing." There is an effort to distinguish outsourcing as somehow being a radical form of free-trade. Economically and pragmatically speaking, whether one firm has control over the operation or the other makes negligible difference to the overall economy.
Please sign your posts.

Again, your comments are symptomatic of the fact that economics cannot logically account for qualitative changes in the "rules of the game", so to speak, therefore, economists are determined, with vigor, to turn the "debate" over "outsourcing" into a "free-trade" issue (see Mankiw's comments and the reactions to them), without recognizing the underlying reality of a tension between economy and society in modern capitalism. From your perspective, criticizing "outsourcing" is criticism of "free trade", why would anyone criticize "free trade", you would have to be mental to do something like that? Your perspective is less than conviencing. You have not adequately addressed the question of what "trade" even means in today's economy and why "outsourcing" is synonomous with it, nor does it even occur to you to do so. Economics justifies phenomenon by its mere existence, outsourcing is an economic process, therefore it is justified, in your eyes, and we have adequate tools to analyze it, which renders crticisms impotent. However, I urge you to take a look at government studies on this "ellusive phenomenon", where you will find disagreement over your definition of outsourcing as free trade and the adequacy of current research to analyze it.

So, place your comments in the appropriate sections and stop with the nonsensical edits! (NewTools 23:20, 17 December 2006 (UTC))

[edit] Copyvio?

I removed the sequence of edits [1] by 209.244.42.188 because they appear to be a copyright violation of this material [2] --Ronz 05:05, 21 January 2007 (UTC)

I've removed the section again after it was reinserted by Don O'Neill. This appears to be a very clear copyright violation. Does someone have a different perspective? --Ronz 16:45, 21 January 2007 (UTC)
I concur. Assuming he does release the material into public domain, I would still have some fairly significant concerns over original research. It seems to be unreferenced and more than a bit promotional. Kuru talk 16:56, 21 January 2007 (UTC)

[edit] Further reading

Is the "Further reading" section necessary? If so, how do we determine what publications are notable enough to be listed here? --Ronz 00:56, 19 March 2007 (UTC)

I agree that these should be moved. I have started an outsourcing text book at WIKIBOOKS and suggest that these are moved there. Some of the other areas that are articles rather than definition of outsourcing could be put there in a more educational manner. The Outsourcing MBA. Brodger3 16:50, 12 August 2007 (UTC)

Should these links be included? Already added once by one user and removed by another.

- Resources - *Outsourcing Jargon Glossary and Buzzwords - *Top20 Outsourcing Companies - *Outsourcing FAQ —Preceding unsigned comment added by Brodger3 (talk • contribs) 08:15, 17 September 2007 (UTC)

[edit] Tags

This article reads like an American encyclopedia article and is highly sympathetic to the alleged plight of US workers and unsympathetic to those countries that gain from outsopurcing, hence the globalize and POV tags. Please do not edit this article with a pro-US POV without balancing that with a pro-Third World perspective, SqueakBox 15:54, 12 April 2007 (UTC)

This article intentionally contains a structure open to all perspectives on outsourcing with a section to demonstrate the benefits of outsourcing as well as a section to respond to the critics of outsourcing. If you think these sections do not properly address the benefits of outsourcing to "Third World" perspectives or fail to properly respond to the critics ("sympathetic to the alleged plight of US workers"), then by all means contribute. However, I take exception to your demand that the contributor counter so-called "pro-US" views with "pro-Third World perspectives" - I should not have to warn you how much of a POV problem such a counter would entail, but will if prompted (i.e. "anti-US" views countered by "anti-Third World views"(???)). At any rate, the benefits to the "Third World" are, however minimally, addressed in the article: "Outsourcing can also present advantages to less developed, typically non-Western states. "Developing" countries, such as China, Philippines, and India, but also countries of Eastern Europe, benefit from the patronage of companies that outsource to them - in terms of increased wages, job prestige, education, and quality of life." In addition, Tom Friedman's book, highly devoted to demonstrating the benefits "outsourcing" brings to "Third World" is properly cited in the reference section of this article along with other working links at the bottom of the page. Though such examples do not exhaust the perspective you are advocating it renders your criticism more impotent. The article may be US-centric, in your eyes as well as others, however, there is nothing in the structure of the article that prevents non-US-centric approaches from being expressed. In fact, the structure of the article promotes it. Thus, your tags, intended to fulfill the function of promoting neutral or global perspectives on the subject are superfluous and will be removed. If you have insights you would like to share then please do so in the appropriate sections. (NewTools 22:29, 15 April 2007 (UTC))
I left the globalize tag in place and if you strongly feel the NPOV tag should be replaced, I will not remove it, though I do believe the structure of the article allows for a NPOV and I believe we should focus on "clean up" of the article, meaning actually contributing to its quality, rather than attempting to "manage" the article through tags like the ones you placed. So, I stand by the "clean up" tag - contributors should try to improve the quality of the article by providing or editing content to the article or making suggestions in the discussion page, like you have done, which I think is appropriate. However, the NPOV and Globalize tags seem a secondary and unecessary, IMO(NewTools 23:36, 15 April 2007 (UTC))
Why don't you understand that Wikipedia is an encyclopedia and not a web-forum for laid off american workers? Madhavacharya 11:00, 4 June 2007 (UTC)
Wow, what a interesting question. Are you sure that wikipedia is not a web-forum for laid off American workers?
Outsourcing is an organizational process relating to the ever changing interaction between business and labor. There is nothing non-encyclopedic about addressing outsourcing's relationship to the predominant values or expressing the praises and criticisms of the process from various standpoints. (NewTools 00:45, 18 June 2007 (UTC))

[edit] Misleading term.

Outsourcing is, in fact, the process of internalizing external resources, e.g. if GM corporate headquarters 'outsources' work to another country, that means they transfer jobs to a firm under their control and recieve back the manufactured goods to sell as demand warrants in relation to current prices. If that firm exists in a country with a lower than average standard of living, that firm needs not obey labor laws and as a result, GM recieves cheap labor and higher profit. This is why prices stay the same or go up, but never decrease in correlation to 'outsourcing'. E.G. The National Labor Committee published a report in 1996 uncovering Honduran sweatshop labor associated with the manufacture of a Kathy lee Gifford clothing line distributed at Wall-Mart. As recently as 2003, the Sean John line of clothing was reported for 'outsouring' labor to sweatshops in Honduras as well. The worker recieved fifteen cents for each shirt which sold at retail for forty dollars apiece. The history of 'outsourcing' runs parallel with industrialization. Economically, 'outsourcing' is disasterous to the livelyhood of the marginally poor and beneficial to the company shareholders. Considering the foriegn laborer, 'outsourcing' limits entrepreneurship. That is, goods are traded to America and other places and not fairly compensated to the foriegn worker so that he may trade his earned money for goods of equal value.


Your implicit concern for the well being of foreign laborers and the call for more equitable distribution practices is well taken, but I think you have it backwards: outsourcing is, in fact, the process of externalizing internal resources. Thus, the term as you use it is, in fact, misleading. You have not convinced me that "outsourcing", however conceptualized, or industrialization for that matter, *necessarily* results in exploitation, rising prices, delimited entrepreneurship, or disasterous consquences for the marginally poor. The existence of sweatshops do not depend on outsourcing. (NewTools 16:44, 3 June 2007 (UTC))

[edit] Most common reason for outsourcing

The section is misleading. The article is about 'Outsourcing', not 'Offshoring / Offshore outsourcing'. The reason cited is definitely not the most common reason for outsourcing. So i think, it will be appropriate to remove the section from this article. Madhavacharya 07:54, 15 June 2007 (UTC)

I agree. This section is misleading. The reasons for outsourcing are way more complicated than the section suggests. As it appears to me, the section is basically a criticism of outsourcing from the standpoint of labor and really does not provide us with anything new. (NewTools 00:35, 18 June 2007 (UTC))

[edit] How are employees paid?

I am writing a report on outsourcing in the US, and I am wondering what transactions are made in order to pay the employee. Here's my understanding, please let me know if I'm right or wrong:

The employer sends a paycheck to the bureau de change located in the employee's country, who collects the money from the employer in USD. (what happens to these dollars? Are these saved for other exchanges?) The money is converted into the proper curency. The money is distributed to the employee.

Is this right?

Bob the Wikipedian, the Tree of Life WikiDragon (talk) 21:22, 12 April 2008 (UTC)