Outsourcing: External Affairs

Outsourcing can reduce costs, result in some silly mistakes because of misunderstandings over culture or language, and terrify workers in nations where the wage bar is set high. Yet the outsourcing industry has matured, argues this article from the Economist. Signs of maturation include growth slowing to single-digit levels, providers competing over quality and vendors referring to themselves as “partners” rather than “labor.” Some outsourcing firms move into areas that require more sophistication or technology: Accenture not only runs clinical trials for pharmaceutical firms, but also monitors patient reactions to drugs; Xansa processes expense forms and also provides alerts about odd expenditures. Such systems rely on incentives and rewards for providers, clients and individual workers. The work no longer moves in one direction, from West to East – for example, one Indian firm looks to open offices in several US cities, close to clients. Such trends suggest that outsourcing may not be a huge issue for the 2008 US presidential election. – YaleGlobal