The Outsourcing Blog: Horses for Sources

The Industry Speaks, Part III: Demand for outsourcing is reaching new heights, but will vendors disappoint?

Industry analysts are often accused of hyping the market they cover, creating hockey-stick growth projections to get everyone excited and avoiding ever reporting a worrying decline in growth.   I just heard you gasp in shock and horror at this revelation...

So what do you do when you're actually in a position to dust-off the old hockey-stick, last seen used adorning a forecast for online vacuum-cleaner parts from ’99, and slap it under a title such as "Outsourcing spending to reach $250 Gazillion by 2016"?

Which brings us to the topic du jour: what are customers intending to do this year with their outsourcing strategies?  When we spoke to 1055 customers, intermediaries and vendors across the global sourcing industry earlier this month, they gave us the real picture:

The Industry Speaks, Part II: When the labor arbitrage deals dry-up (and they will), customers will select vendors that can deliver business-value beyond basic low-cost services

Fed up with short, punchy news titles such as "Outsourcing is Dead", or "My Delivery Manager Ate my Hamster", designed purely to capture your attention with minimal substance? 

Well, salvation can be found right here, as long-winded rambling ones are going to be all the rage this year, so here's one to send you into a tail-spin:  "Infosys will buy Capgemini, then IBM will acquire the newly-merged entity before spinning it out as part of a joint-venture with Deloitte, GE and Macdonalds".  Actually, before you hurry out to purchase some stock in the Golden Arches, I just made that up...

Instead, let's talk about outsourcing vendors, and what on earth they are going to do when these tasty labor-arbitrage deals start to fizzle-out.  As we discussed at length back in November, operational service provision is commoditizing and leveling the playing field.  Customers did their planning during the recession, and, now armageddon has (apparently) been averted, it's time to execute on that planning.  And part of many customers' planning right now, is to take advantage of moving operational support offshore and driving out some cost. 

This is bonanza-time for the offshore-specialists that can deliver basic IT and BPO services at competitive prices.  Contract-signings that were delayed during the painful recession months are now in full-swing, service vendors are reporting healthy results and even the sourcing advisors have stopped moaning about their lack of deals, and are making money again.

Alsbridge doubles-down on data-rich consulting with TAG acquisition

 
We've had a huge amount of debate concerning the future direction of outsourcing advisory services, and today, we can exclusively reveal a sea-change in the advisor industry landscape with  Alsbridge's acquisition of TAG, the leading life-cycle expense management advisor for network services.

Weekend recap: the "new normal" in the outsourcing delivery business

Thanks to all of you who participated in December's survey "Seeking The New Normal in Outsourcing Delivery". 

In total, 1051 companies gave their opinions, with a strong mix of buyers, intermediaries and providers participating to give us an unprecedented pulse on the outsourcing industry.  About time we had less prophesying and some actual hard facts on what's really going on out there...

In anticipation of releasing the results of the study later next week, I'd like to recap some recent thoughts on where the industry is headed, to help make sense of what is really happening in the industry.  And a special thanks to our friends at Global Services Media and the Shared Services & Outsourcing Network, who graciously invited their member communities to complete the survey (thank you, Ed and Sarah).  And curses to those of you who pilfered our phrase "New Normal"... you know who you are :)

The "new normal" in the outsourcing delivery business

This truly has been a pivotal quarter for the outsourcing business.  As we've discussed several times here, many services contract decisions have been delayed during the economic crisis while organizations worked out the best course of action to get through the downturn. 

In Q3 we've started to see definitive action, with many service providers meeting, and some even beating, Wall St. expectations.  But while some providers are clearly delivering, others are struggling to compete in this "new normal".

So what is this "new normal"?

The great analyst roll-up is on... who'll step into the void?

So the "great analyst roll-up" is in full swing, with Gartner's announcement today to acquire another competitor, this time the Burton Group, for 56 big ones.  This comes hot on the heels of my former firm, AMR Research, also being acquired by Gartner.  I won't go into the details of the mechanics of these mergers, as you can read exhaustive commentary, debate and analysis over at Carter Lusher's blog.  However, I did want to discuss what this means to our sourcing industry.

Limited choice for alternative opinions.  As most of Gartner's competitors couldn't really compete on brand, they've had to differentiate themselves to survive, and that meant finding areas of coverage that Gartner didn't do (or do well), and having analysts on staff who weren't afraid to rock the apple-cart with edgy, sometimes controversial, opinion and research.  While Big G has picked up some superlative minds from its latest acquisitions, its new challenge is going to be maintaining those edgy opinions, and not having them toned down under the glossy corporate veneer of the billion-dollar brand.  Whichever way you look at this scenario, we simply have to have more than two analyst voices dominating the opinion and insight of our $850 billion sourcing industry.  Why?

...and the more serious moments of '09

And now we can finally put that year to bed, surely we can look forward to a more normal 2010.  Of course we can ;)

 

 

Here are some of the more serious moods and moments from a rather epic year in our industry...in chronologial order:

Satyam: It was like riding a tiger, not knowing how to get off without being eaten

Think before you fire: The cost of replacing IT talent

Forget 2006, let's go back to '96

Global business on a Knife-edge: Bonuses, H-1Bs and Naïve Protectionism

2009 - the year of papering over cracks

Most people I speak to can't wait for 2009 to be put to bed.  People suddenly awoke to the realization that everything they have grafted so hard to achieve in their lives could be seized from them, because their economy had failed them. 

Like everything else in this world, we always wait until its too late before taking drastic action, and 2009 epitomized this reactionary mindset that dominates so much of our society.

However, I did want to sign off from 2009 with a dose of realism... fancy phrases such as "New Normal", or "Preparing for the Recovery" only wash when they attempt to address the question: "How the blimming heck can we radically change our attitudes and actions to save our children from economic and environmental disaster".

Getting a bit of Ruest (Part I)

If there was a Nobel Prize for industry analysts, this guy walks away with it - he's super cool, talks a good game, and has done very little beyond, well, be super-cool and super-smart... and with a French accent to boot.  So today, I thought we'd give IDC's Sebastien Ruest the chance to prove there's a bit more substance behind the snowboarding, hockey-stick-wielding playboy façade :)

Sebastien's proving IDC's nearshore model by leading it's global services research from Canada, and developing a solid reputation in the industry as one of the industry analysts who "gets it".  So I thought it time to grab a few minutes with the dude himself...

2010 Predictions for the Outsourcing Industry

Firstly: my apologies to everyone for hopping on the perennial "Predictions Bandwagon".  One may as well say "Stop press everyone, I'm just such an important smarty-pants you should listen to ME ME ME!"  As Newt Gingrich told us earlier this year:  "There is not one living being that can accurately predict the outcome of this crisis, all we can do is continue the dialog and the answers will slowly unravel". 

Secondly:  we've conducted two major studies with outsourcing buyers globally this year (and am currently sifting through 800 responses - and counting - from our current industry study).  While we can evangelize, prophecize, pontificate and sermonize, nothing can substitute for real data on what everyone is currently doing and planning to do.  We have the platform here to do that, and I personally thank all of you who took a little time out to share their views, actions and intentions.

And Thirdly: I'm just such an important smarty-pants you should listen to ME ME ME!"  So maybe I can help with the unraveling?

i) CIOs and CFOs will be uniquely challenged to avoid becoming "Cartoons of the Recession". 

Simply put, when there's a serious recession in the works, the job of the CIO is relatively simple - cut costs and squeeze your suppliers using whatever means are at your disposal.  CIOs rarely get fired in this scenario, unless they somehow messed up the cost-cutting. 

Complete our survey. Now

Before you tuck into your Thanksgiving turkey and guzzle a gallon of bad quality Chardonnay, please take 10 minutes to complete our industry-wide study entitled "The New Normal in Outsourcing Delivery".  And if you're in Asia or Europe, currently giving thanks for US declaring itself independent from everyone else, this includes you too.

Anyhow, we are actively seeking the collective opinions and experiences of services customers, providers, and advisors and need 10 minutes of your time to complete this quick survey, designed especially for the patience-challenged, attention-deficit-inclined executive.  Simply click on the following link:

Click here to complete our survey "Seeking the New Normal in Outsourcing Delivery"

All individual responses to the survey will be maintained strictly confidential. In return for your time, you'll receive a free write-up of the survey findings (wow).

We have partnered with the member communities at Global Services Media and the Shared Services & Outsourcing Network to ensure a powerful global participation of decision-makers and senior executives engaged in outsourcing delivery services.  Please do participate and help advance our collective understanding of the industry.

Please note that "Horses" is a free resource for the sourcing industry at large, and the purposes of this research are to further all our knowledge and understanding of the direction of the global sourcing industry, whether you buy, sell, advise, criticise, market, commentate or analyse sourcing delivery.  And if you do neither of these activities, please seriously question what you're doing here in the first place -:)

PF.

Can IT overcome its credibility crisis?

There's little doubt about what's been providing the rocket-fuel behind the rebounding services business: IT outsourcing.  Simply put, there are plenty of eager providers to choose between, they have access to most of the technical skills companies need, and their rates are far cheaper than retaining or hiring staff inhouse.  Some are also getting pretty handy at becoming consultative business partners, and not simply low-cost body shops.   Our recent study tells the real story -  50% of enterprises are either kick-starting, or scaling-up, their ITO right now.  "So tell us something new", I hear you groan into your laptop screen...

What's different as we emerge from this crisis, is that the perceptions of IT from the other parts of the business are becoming increasingly cynical in many companies.  Many companies are hiring new CIOs with the mandate to "turnover half the department, or outsource it", and IT middle-managers are being seriously questioned about the value they are adding to the business.  While much of the bottom-layer of IT has already been contracted out, it's now the middle layer of IT professionals which is under threat.  CIOs are under pressure to prove the value of maintaining these heavy middle-layers, or move them out of the organization.  Some CIOs are already operating under the strategy of hiring a few people who "genuinely get it" to drive IT value, while outsourcing as much of the operational work as they can.

Xerox-ACS: Cloud Services Potential, or Dinosaurs Huddling Together for Warmth?

Our recent discussion on Xerox's acquisition of ACS certainly served up some meaty discussion, and even got picked up by CIO.com, among other media.

My dear friend, and former colleague at AMR Research, Dana Stiffler(pictured), recently sent us in some of her views on the merger.  Dana actually got promoted today to VP and Head of Research for AMR's services research, where she will be offering clients "cashable benefits, or your money back" with her group's output.

Anyhow, thought this a good time to showcase her talent...  Over to you, Dana:

Xerox-ACS: Cloud Services Potential, or Dinosaurs Huddling Together for Warmth?

Xerox is the latest in a long line of technology manufacturers to realize that its future lies in services, not products, particularly in the B2B value chain. Once manufacturing and supply chain efficiencies have been wrung out, it’s time to turn to top-line opportunities: services that use product heritage as a foundation. The fastest way to acquire these capabilities is by acquisition. Xerox’s predecessors in this journey include IBM, Fujitsu, Hitachi, HP, and, just recently, Dell, with its acquisition of Perot Systems.

The "new normal" in the outsourcing delivery business

This truly has been a pivotal quarter for the outsourcing business.  As we've discussed several times here, many services contract decisions have been delayed during the economic crisis while organizations worked out the best course of action to get through the downturn. 

In Q3 we've started to see definitive action, with many service providers meeting, and some even beating, Wall St. expectations.  But while some providers are clearly delivering, others are struggling to compete in this "new normal".

So what is this "new normal"?

Operational service provision is commoditizing and leveling the playing field.  Coming out of the recession, there is a backlog of engagements which are largely labor arbitrage-focused and it's often a question of price balanced with the promise of delivery performance for most clients.  There isn't a lot of secret sauce these days for what many clients are currently demanding, where in the past, incumbent service providers could play the "capability game".  With many of these skills becoming mainstream, the competitive playing field has leveled out.

Sitting on a shrinking business and afraid to change

"Most of our managers are happy sitting on a shrinking business" bemoaned a senior executive the other day.  Sound familiar?

I hate to say this, but too many senior executives I talk to these days adopted this survival mechanism during the economic crisis, and are clearly struggling to change their mind-set now it's clear that armageddon has been averted.  And the main reason seems to be that the last year has exhausted them, preventing fresh, bold decisions to be made.  Hey - it's exhausted everyone. 

Smart business leaders are now trying to re-energize their staff, take that deep-set panic out of the daily job, and find reasons to celebrate, like a not-so-bad-quarter.

I clung to the forlorn hope that a year-long economic crash, a transformative president, and new approaches to business ideology would encourage businesses to start thinking differently.  But, in many cases, I appear to have been naïve .  The result is that many businesses are going to have to force real change upon themselves to escape this malaise. 

From wanting change... to embracing  it

In reality, most businesses are coming out of recession having already cut visible costs to the bone, for example areas where cost can be directly extracted from the business without any form of arbitrage such as travel feezes, headcount reductions from non-critical areas, budget reductions across departments in areas such as marketing or IT, and so on.  The next steps are to explore cost arbitrage through labor (i.e. outsourcing), and ultimately process transformation that should accompany any form of outsourcing.  Simply put, it's nigh-on impossible to dig out further pockets of cost, without re-wiring the guts of business operations to find new efficiencies.  

Global sourcing provides one of those vehicles where businesses

can effect progressive shifts in their business models to approach things differently.  It can provide the change agent to make this happen, but only when our management talent has the energy and determination to look at things differently - and refuse to settle for sitting on that shrinking P&L. 

Efstathiou uncut: all aboard with the sourcing skipper

When I returned to these Western shores 6 years' ago, I was given the the unenviable task of working with the indomitable Andy Efstathiou. 

Now, analysts who have spent 20 years working in commercial banks are not to be messed with - and I quickly learned my lesson with Andy, who (literally) has an encyclopedic knowledge and perspective of everything that has gone wrong with the world.  I recall Andy warning us years' ago that this was all going to go horribly wrong... and did anyone listen?

Andy has since become a good friend over the years, and has always been one of my first ports-of-call when I want to understand anything about sourcing and the banking sector.  He now runs the Banking Sourcing Program for BPO analyst NelsonHall, but his real claim-to-fame is that he finished seventh in the US Olympic trials for sailing in 1988 (pictured).  Not many people knew that...

Anyhow, I caught up with Andy last week to pose a few direct questions on the current state of the banking industry, how sourcing strategies will evolve after the recession, and how banks can navigate these choppy waters (sorry):

Phil Fersht (PF): Andy, firstly, let's not beat around the bush here. What's the climate like in the banking, financial services and insurance (BFSI) sector these days? Do you expect things to continue improving, or are we in a false dawn right now?

Andy Efstathiou (AE): Banks will continue to do well as long as they are on performance enhancing stimulus. However, the banks are aware that some day they will have to stand on their own two feet. In order to do that they need to be able to scale operations in both directions without eating overhead on the downside or investing capital to expand on the upside. Therefore banks have been aggressively working with outsourcers to create engagements built around transaction based pricing.

Business and friendship: it's all about professional respect

You can't understate the importance of relationships in business - especially sourcing, where it's all about cultural fit and working relationships.  In business, it's not always about liking people, it's about being able to trust - and work - with them.  Sometimes, you will actually grow to like someone, in addition to trusting them and working well with them - and that is special; but let's face it, it's quite rare.

In many cases, people you like are not always people you're going to work well with - and vice-versa.  You may not have any affinity or liking for someone at all, but you are straight with other in a working scenario, and have an effective working relationship.  You can always develop a professional respect for someone - and that is different from developing a personal relationship.

If there's one thing that irks me, it's those people who only bother to talk to you when they need something, but paint a facade that they're one of your real "friends".  I like to create a distinction between someone who is a genuine friend, and someone who is a colleague / industry contact.  It's like when you change jobs - you are often surprised by whom was really a friend, versus who was merely toadying up to you, to get you to do things for them...

Derail the Healthcare gravy-train: introduce competitive multi-sourcing

Being a relatively recent immigrant to US society, it's fascinating to observe the political games corporations and politicians play to reach their desired outcomes. 

What I find a little absurd is how easy it is to decipher the real political motives behind all the rhetoric; especially those ridiculous commercials sponsored by insurance companies trying to protect their monopolistic positions and keep their gravy-train chugging along.

Working in the sourcing industry forces you to cut quickly through complex issues to find sensible solutions, and healthcare doesn't seem a whole lot different - despite the sheer scale of the issues and requirements.  Trust me,

The entire Great Recession of 2008-2009: Blogged for the outsourcing industry

Wouldn't it had been something if there had been some sort of interactive journal during the Great Depression, where we could have truly experienced the emotions of the time, peoples' ideas for change, the stark contrasts between desperation and hope? 

It's been a geniune privelege to have hosted these emotional debates throughout the entire Great Recession of 2008-9.  It's incredible how attitudes have changed over these tough months - I don't know about you, but I feel a little wiser as a result - and the great interaction I have enjoyed and observed with so many of you, has made this all possible.

Here's the whole story of the Great Recession and it's impact on the global sourcing industry (in chronological order):

Who's looking out for the US business these days?

I was having a little joke yesterday, where the premise was: "So what do we do once all the jobs have been offshored?"  My initial solution was:  "That's easy -  we create great low-cost skills here, and we bring them all back".  The other partaker in the mirth added:  "Wrong - we will still be offshoring, as all our business headquarters are moving out too.  In effect, we'll be offshoring jobs to America". 

As we rolled around on the floor in uncontrollable laughter (OK, it wasn't that funny), it did hit home how unattractive the US is becoming for businesses. 

• US corporate taxes are among the highest in the world.

• The cost of living and wages in business centers such as New York, Philadelphia and Chicago is off-the-scale.

• The cost of healthcare is a killer - and, despite the excellent intentions of this new proposed healthcare reform, the tax burden on the US business is going to get even worse.  For the cost of one years' benefits package in the States, you can hire a full-time ABAP programmer in your offshore captive for that entire year, or pay for half of one (for the entire year) with a service provider.

• Other Western countries are far more corporate-friendly.  I was helping a friend with a business plan the other day, and the cost of hiring qualified graduates in London (yes, London) is half that of New York (and getting even cheaper in this market).  Why even consider setting up a global business in the US these days in this virtual environment?

As much as I admire all the efforts of President Obama to drive reform and economic stimulus into the US economy, I just don't see the environment for the US business to thrive and create new jobs being created.  I'd like to see stimulus money being allocated to helping businesses create new knowledge-jobs that are competitive with those on offer from India, Europe, China etc.  The way things currently stand, the US business environment has never been so ripe for outsourcing - not just for accessing lower-cost skills, but also for our businesses themselves.

Is this "2001 all over again" for outsourcing?

As we've predicted, based on our surveys, many tough discussions with buyers and general chit-chat, sourcing evaluation is now picking up, and we can expect to see a wave of deals in Q4 this year and Q1 next year (and beyond). 

First, the sourcing advisors, management consultants and analysts get busy with their clients showing much more urgency, and then we can expect to see some deals happen.  Based on my conversations with the advisory community over the last couple of week we're now in that former category.  I've even had a couple of people come to me with the question "Is this 2001 all over again".  My answer is:  "In some ways yes, but the types of deals and the global delivery execution is markedly different this time". 

Now why is this?

Post 9/11 we saw a major spree of ITO, call center and end-to-end HR BPO wave.  ITO worked, call center is stuttering with offshore value, and HR BPO - in its past form - failed 

The IT infrastructure outsourcing deals were onshore mature contracts with established providers such as IBM, CSC and HP, experienced at driving economies of scale with their delivery models. The application development and maintenance deals back then were among the first to truly leverage offshore

Captive sell-offs: good for innovation, good for employment

I know I've been depressing everyone with calls for change and for our flagging companies to step up and disrupt their business models.  But did I ever say I was here to make you happy?

However, one shimmer of light amidst this gloom is the increase in activity of service providers buying up business' captives or shared service operations (often under the guise of a new "client win"). 

EXL's acquisition of Schenider Logistics' Czech operations is yet another recent example of a service provider making a strategic move to add scale and expertise to its delivery portfolio.  In this case, EXL is cementing its European presence in a unique and attractive sourcing location, enhancing its F&A BPO business and bolstering its multilingual capabilities, in addition to incorporating supply chain and logistics management process expertise - an area of increasing importance in the industry.

So why is this good for industry?

Why the lay-off culture is far more damaging than offshoring

Ever since President Obama proposed to change the IRS tax code that regulates how US corporations declare income from international activities, I've been thinking about other measures governments can take to slow the recession and help businesses become less myopic with how they navigate these rough waters. 

Reading between the lines, he appears to be targeting a revenue grab, while making political overtones against companies which use offshore resources.  However, he's simply penalizing firms from being more productive with their exports.  Sure, there are issues with tax fraud from havens such as Bermuda or the Caymens, but this is primarily an issue with individuals, not large enterprises. 

Why penalize a US conglomerate for manufacturing diapers in Brazil for the

Take part in our Budapest debate next week... from your front room

This Tuesday, we're holding a "World Exclusive", with a distinguished panel of Horses-readers being webstreamed live from the 9th Annual European Shared Services and Outsourcing Week in Budapest Hungary.  For those of you unable to make the conference, you will have a chance to take part in the debate via a live blog-cast streamed to a computer near you.  I do hope you can partake in the banter.

*World Exclusive* Horses For Sources - Live From Budapest

Deciphering The Business Value Of Tomorrow’s Sourcing Strategies In Today’s Economic Climate

Why protectionism is failing

With all the recent fuss in the media and the global sourcing industry about protectionism derailing new engagements, I wanted to set the record straight with some brand new survey data and some views into President Obama's current position, that protectionism is not proving to be as big an impediment behind companies' making outsourcing decisions in the near future as many people have stated.

To this end, I wanted to share some preliminary data from our current survey on global sourcing dynamics that tackles the issues preventing companies from making outsourcing decisions this year:

The flat of the curve: are we scared of innovation?

Kevin O'Marah, AMR Research's Chief Strategy Officer, blogs a thought-provoking piece that highlights how so many retailers and manufacturers have failed to embrace collaborative supply chain models through fear of "giving more than they'll get".  Kevin argues that consolidation amongst suppliers will accelerate in this environment as major industrials drive cost out of their supply chains by reducing their supplier bases.  He adds,"what we have since seen is that cooperation takes a lot more than just setting up EDI, reverse auctions, or visualization.  It takes trust, which apparently is still in short supply." 

The politics of offshoring: all talk, no action

Many of you whom I've been interacting with lately know I'm concerned by the degree of protectionism from some politicians and a handful of organizations; namely the TARP-funded financial services firms and a few from the healthcare sector.  We recently discussed many of these issues here. 

Professor Bob Kennedy, who heads up the William Davidson Institute, a non-profit research and educational institute that focuses on business and policy issues in emerging market economies, has been keeping very close tabs on these issues and I asked him to contribute his recent experiences and views with us.  Bob also has a new blog up and running entitled "Services Shift", and has recently released his new book, adorning the same name.  Over to you Bob...

Why No Regulation of Offshoring: Untangling the Gap Between Rhetoric and Action

Picking up on Phil’s April Fool’s day post, I wanted to share a few thoughts on why we see lots of anti-offshoring rhetoric from politicians, but (thankfully) very little actual policy.

White water canoeing with Newt Gingrich

I had the pleasure today of having lunch with former Speaker of the House Newt Gingrich, who is also widely rumored to be a possible Presidential candidate in 2012.

While I do not share many of his political views, Newt does have some nailed-on perspectives on globalization, outsourcing, and some measures the US needs to take to get its act together to remain the world’s economic superpower. Plus, he’s very funny.

Here are some soundbites from his keynote speech at the excellent Sourcing Interests Group conference in Baltimore from earlier today:

"We’re spending trillions to cover up really stupid policies, violating every fundamental principal of economics. These congressional leaders are people who know nothing – our Founding Fathers deeply mistrusted politicians. Bush was wrong for all of 2008. Paulson the worst ever Treasury Secretary, even though Geithner is now rivaling him."

Horses Exclusive: Obama to ban offshore outsourcing

Folks - I can exclusively reveal  - and you heard it here first - that President Obama will shortly be announcing a blanket ban on the offshoring of US jobs.  My government insider tells me that he will take the following measures:

• Any employer seeking to replace US staff with an overseas employee will have to prove it was unable to source a US employee for the role for a period of 90 days, where the position was widely advertised on national media;

• A task-force of leading US-headquartered outsourcing service providers, including IBM, ACS, CSC and HP, will be tasked with assisting US firms with their backsourcing initiatives, their fees being footed by a proposed budget ammendment that is likely to total as much as $50 billion;

• Leading outsourcing service providers which are not US-headquartered, and have more than 50% of their employees based outside of the US, will have their US trading licenses revoked and will have 30 days to wind down their US operations;

• All jobs that have moved offshore within the last 8 years, that are currently being performed for any US-domiciled organization, are to be replicated back to a US location within the next six months.  The US government will reimburse 20% of the reinstated onshore employee's salary to their employer upon completion of their first year of employment;

• CEOs who fail comply with the ruling will face a disciplinary panel headed by Lou Dobbs. 

So the battle is on between the USA's onshore locations.  Who will win out?  Albuquerque, Detroit, Nashville, Jacksonville, El Pazo?  Love to hear your thoughts...

Keeping it onshore: an interview with Mark Vengroff

Having witnessed the rampant growth of Finance and Accounting BPO over recent years, the common thread among the leading service providers has been cost-arbitrage through offshore labor.  There is, however, one exception:  Vengroff Williams and Associates (VWA). 

Naturally, the core differentiators among service providers is the ability to innovate with process and technology, and provide great people to service their clients, however, the offshore element has created the cost-lever to entice companies to move into a BPO end-state.  VWA is the one service provider which has resisted the lure of offshore/nearshore delivery to drive down costs even further, and has chosen to focus on its onshore delivery centers underpinned by its order-to-cash technology solution to service its clients. 

VWA achieved a 5% share of F&A BPO engagements in 2007, which was greater than several of the leading BPO providers in the market, and boasts some blue-chip brands in its client portfoilio, namely Ford Motor Company, Federal Express, Kodak, Microsoft, Yamaha and others.  Moreover, in this age of protectionism, in addition to the increased focus on healthcare reform, you have to consider VWA in a unique position in the industry today.  I recently caught up with CEO Mark Vengroff to ask him to share with us the reasons for VWA's success.

Think before your retain: is IT impeding many companies' survival in this economy?

I had this private debate with a number of peers in other analyst and consulting organizations recently, and wanted to share some of the discussion points with you all here.

In our recent discussion "Think before you fire: The cost of replacing IT talent", we discussed the issues facing  many companies who were too trigger-happy to scale back their IT wage-costs, and ended up spending a lot more in the long-run when replacing the valuable knowledge of their business systems.  At the same time, we see even more firms held back by IT departments that have failed to move with the times - and none more so than mid-market firms that simply cannot afford to employ the best quality IT staff.   And while we can debate the fine points about business processes moving to offshore or fully outsourced models, you sometimes forget how critical IT is to getting things done. 

Global business on a Knife-edge: Bonuses, H-1Bs and Naïve Protectionism

Has the world gone mad? Or is it just the US Senate? One month after Senators Bernie Sanders and Chuck Grassley pushed their amendment through the Senate making it tough for TARP recipients to hire H-1B* or L1 visa holders, we use the same TARP cash to pay retention bonuses to the very people who got us into this mess in the first place. We could create many, many more jobs with that bonus cash than we’d ever had “saved” by blocking a small minority of H1-B applicants.

The original intent of the Sanders/Grassley amendment barred all recipients of TARP funding from hiring any H-1B workers. However, the amendment was

Guatemala: Bananas, Green Tomatoes... and BPO

We've been debating the opportunities for Latin American countries to take on BPO work for a while now, and spending a few days in Guatemala has confirmed - beyond doubt - the potential of the region. 

I had the pleasure of visiting Capgemini's facility, which is quickly ramping up customer-facing F&A work for Coca-Cola Enterprises (which we picked up on here).  I am going to write more about this engagement in due course, but the hybrid nearshore/offshore operating model for Finance and Accounting and Procurement is showing strong signs of being the way forward for the industry.  This is also the case for many global strategic sourcing, supply management and HR BPO engagements. For example, Coca-Cola Enterprises is sourcing neashore work to Capgemini's centers in Guatemala and Krakow, and using its Chennai operation to support these centers with non-customer facing processes. 

Guatemala's population itself is only 13.7m people, with 40% based in urban areas, however, it is the largest Central American hub with strong potential to source activities to neighboring countries, such as El Salvador and Nicaragua (see graph below) to compliment serices and keep costs low.  What impressed me most meeting many operations agents and managers was the easy-to-understand English intonation, the obsession with process, the youthful energy and the discipline. 

Where should outsourcing vendors invest their marketing dollars in this climate?

Being an analyst, you get a broad view of all the entities competing for the same service provider dollar. You also get a good perspective on how service providers can get the best bang for their marketing buck. And being a blogger, you also pick up a strong sense for the effectiveness of media outreach, but I'll save that discussion for another time.

There is no one-stop support shop for vendors to find and attract new clients, and influence the market - they need to gauge where they need to build influence, using both direct tactical measures - i.e. speaking at conferences or advertising, and indirect measures - i.e. influencing influencers or subliminal branding. The current pull-back in discretionary spending from vendor marketing budgets is seriously exposing the bloated array of firms feeding off the vendor marketing-dime, and with a lot less to go round, we're going to see some firms exit the market, some market consolidation, and others simply going out of business. We'll also see some boutiques linger around the industry because their owner has no idea what else to do, and his only costs are living and travel expenses, and maintaining a website.  Desperate times call for desperate behavior and none more so than for many of those entities forging their living selling to IT services and BPO firms.

Time to put banking executives on trial?

As the sheer magnitude of the unfettered lending and borrowing that has taken place over the last few years continues to unfold, I am hearing more and more calls to put banking and government executives who failed to prevent this (or knowingly encouraged this) on trial.  I am inclined to agree with them.  The BBC's Robert Peston just put out an excellent analysis of HBOS's final earnings report as a discreet entity:

This corporate division generated losses of £6.8bn in 2008 from loans and advances to businesses of £116bn.  It has had to write off an average of 47% of those loans in this area that have gone bad. Almost 12% of all its corporate loans are now classified as impaired or damaged. And as a percentage of the total corporate lending book, the impairment charge is just under 6%.  On the basis of those statistics, HBOS appears to have left a big bag of money open on the pavement with a sign saying "borrow what you want".

How can you give out over $100 billion in bad loans?  In Spain, for example, their banking system, which has been one of the least affected by the crisis, operates using dynamic provisioning, where each loan mustbe underwritten with capital in the banks' reserves.But what has transpired in the US and UK banks is tantamount to executives knowingly driving their businesses into the ground at the expensive of getting fat and happy themselves.  It's like hundreds of these executives were riding tigers without knowing when to get off. If I hear one more jingoistic anti-offshoring argument about the fact that a whole industry should be tarnished because a single service-provider was caught cooking the books... how about a whole industry cooking its books?

Is the call center finally coming back onshore?

We had a great discussion a few weeks' ago regarding the USA's potential to take on more sourcing work, with increasing unemployment and downward wage pressures.  I've made this point a few times now, but BPO is clearly the bigger onshore opportunity than mainstream application services for the US to muscle in on sourcing work.  And where better to start than the call center?

Bottom-line, President Obama should take a leaf out of Margaret Thatcher's book and examine simple effective ways to provide productive and sustainable employment in depressed areas where industry is in a terminable decline.  I never voted for old Maggie, but she did do one very smart thing during her tenure as British PM - she closed down unprofitable coalmines during the 80's recession, and encouraged businesses to set up call centers in depressed British cities.  Now there are over 650,000 call center employees across the UK. 

Did Slumdog wipe the Satyam slate clean?

Lee Ann Moore sent me this interesting analogy of Slumdog's Millionaire's success at the Oscars, and whether it could enhance India Inc's image in the wake of the Satyam scandal and the "Buy America" protectionim we're seeing at the moment...

The post-Academy Award media has declared 2009 the year of India. Will that hold true for outsourcing and Indian workers? Perhaps this push is just what our political leaders need to keep protectionism policies at bay. It is too late to impact the recent bailout package that bans recipient companies from hiring H-1B workers, many of whom are well-educated Indian nationals. Can this Oscar favorite change our attitude toward work in India?

How could our sentimental side not cheer for all the Jamal’s and Latika’s of India who grew up in an impoverished country and work every day to create a better life for themselves and their family? Granted the movie presents a well-written yet fanciful tale, but it helps us understand a unique and beautiful culture. Only time will tell if Hollywood can help the American worker minimize his fear of losing a job to India or perhaps treat the tech support personnel with a bit more respect. Shall we track the call center escalations pre and post-“Slumdog”?

There are many challenges in understanding how a global economy will benefit the American worker and corporations. Thomas Friedman’s recent post, The Open-Door Bailout, provides a compelling argument for open borders and challenging Americans to focus on innovation over fear or job loss. Perhaps the emotional appeal of “Slumdog Millionaire” will allay the fears of the American worker and challenge Washington to think and act global.

Think before you fire: The cost of replacing IT talent

There’s currently a certain sense of déjà-vu within the IT community, as companies look at shaving even more cost out of a function that has been battered since the 2001 dot-com bust. However, when we look at the lessons of the past, you do have to question companies which decide to sharpen their knives once more when they address their IT costs. Companies need to offset the cost of every layoff with the cost of replacing that talent when the economy improves. It is not so much who is left standing, but rather who is in position to grasp the brass ring of prosperity when it returns.

If economic conditions improve in 2010, then the amount of costs saved by releasing an employee may only be $50-100K by the time all the lay-off costs are incurred. How can you put a price on replacing the inherent business knowledge of that staff member when you re-hire a replacement? It may take another year or two to get the replacement up-to-speed, and will not only end up costing you more, but may also impede your executives from accessing critical data in a timely fashion. The overall cost of replacing that staff member could easily be three times the costs saved by laying her off. And these easily-identified direct costs are only the beginning; the costs incurred to your culture and morale can prove even more damaging.

There are lessons to be learned from those who did it right and those who failed to do so during the recession of 2001. The frequently cited observation by George Santayana warrants consideration, “Those who do not remember the past are condemned to repeat it.” Furloughed IT employees in the RIF of 2001 were often reluctant to return to their previous employer. Having been viewed as expendable, the trust and bond between the two may have become a casualty. Often the company belatedly discovered the employee was not at all expendable.

Want to offshore yourself?

IBM is now offering employees, who would otherwise face layoffs from their North American jobs, the chance to work abroad through 'Project Match'. Destinations include Argentina, Brazil, China, Czech Republic, Hungary, Mexico, Poland, Romania, Slovakia, Slovenia, South Africa, Turkey, and United Arab Emirates. IBM will also help with moving costs and provide visa assistance. While some cynics will sneer at this scheme, at least Big Blue is doing something proactive to support at-risk staff, and also promote moving much-needed onshore talent into their emerging country delivery centers. Furthermore, maybe they'll pick up some good work habits and bring them home to the States when the economy improves?

BPO bucks the trend as WNS posts strong revenue growth

As we discussed last month, the Business Process Outsourcing market is maintaining double-digit growth as we move into 2009, fueled by increased uptake of source-to-pay, analytics, finance and accounting, HR and industry-specific services. WNS Global Services, one of the largest pure-play BPO providers, with revenues in excess of $500m, has posted a 15.9% increase in revenues for Q4 2008, over the corresponding quarter in the prior fiscal year.  WNS's main competitor Genpact is due to report on 18th February, and I would expect to see a similar revenue increase from them.  It really appears that BPO is finding its feet and

Forget 2006, let's go back to '96

Like many of you, I have been waking up in the middle of the night wondering what's going on with the global economies and how the world will look in a few months when we adjust to the new economic reality.  I started thinking about about the world when people lived within their means, took a job for a job's sake, and could plan for the future.  It then hit me hard - things have simply fallen out of proportion. 

When I graduated in '94 there weren't a lot of high-powered careers available to graduates - you took what you could get and worked at it until something better came along.  I actually started off in customer relations for a burglar alarm firm... doesn't make my LinkedIn profile, but it actually started me off on a track that somehow got me here (and I did have some hilarious conversations with London celebs with their alarms wailing in the background).

Let's talk about proportion and focus on the two staples in life - food and shelter.  By 1996, I was flying high as an analyst earning a whopping $30K a year (about the same as an Oracle developer in Bangalore today).  I also purchased an apartment for $100K.  In those days you could borrow 3 times your annual salary - that was it.  The cost of groceries was about $40 a week, and a good restaurant meal was never more than $35 a head.  I'll stop there.  While my salary seems terrible by today's standards, I didn't build any debt and I had a mortgage that was manageable for a property that was fairly valued.  Life was good, and I slept well at night.

Take 2008.  The equivalent salary for a graduate-level analyst is about $50K.  The cost of that equivalent apartment is $300K (6 times the salary), weekly groceries $75 and a good meal $60 (if you're lucky and the wine's cheap).  There's no feasible way you can enjoy the same quality of life without mortgaging yourself way beyond your means and delving deep into credit-card debt.  What's worse is that debt has become part of life for so many people.  And that's precisely what happened, and now everyone's paying the price.

The optimum way out of this crisis is for these proportions to be redressed, however painful it may be. 

Everything will change

I've been avidly following Robert Peston's coverage of the economic crisis.  Peston is the BBC's business editor and has built a stellar reputation for reporting the key facts on what went so massively wrong and what we can do to emerge from this crisis. His recent BBC radio discussion with Robert Wolf, Financial Times's chief economic commentator, Richard Lambert, director general of the CBI and Roger Carr, the chairman of Centrica and Cadbury, is well worth hearing.  Key points discussed:

• The UK is the most vulnerable economy, due to its unprecedented housing bubble and over-reliance on the financial services sector.

• The strong sense of denial is fading - there aren't going to be any winners out of all this, just relative advantage. 

• Not everyone yet grasps this is a massive structural change - we're not going back to 2006.  The massive consumer-led debt boom cannot be repeated.  We might go back to fast growth, but the whole pattern of global demand will have to be different for that to happen.  The world economy will have to be re-balanced in different ways.

• We've done a very good job of driving short-term stimulus and saved the banking system, but the long-term solution has to be the restoration of healthy private sector demand across the world: that is the next stage of getting back to a healthy economy...but does the private sector understand this?  There is an increasing awareness that we are interdependent.  Unless the strong support the frail we will have continuing difficulty.

• We must protects the emerging economies now and change the way we finance them.  The IMF resources need to be bigger to protect developing economies.

• We need to have serious intelligent dialog with the Chinese on how to make their growth more compatible with global stability.

All-in-all, you can really start to guage how crucial the role global sourcing has to play as we emerge in a new economic structure.  The inter-dependencies across economies and businesses can be managed more effectively by firms adopting multi-cultural, multi-lingual and multi-regional delivery models. Both governments and businesses need to embrace both local and global talent to restore private sector demand over the long-term.  What is abundantly clear is that we don't fully realize how this structure will ultimately develop, but we are quickly understanding the basics of what needs to change.  The next stage is for both governments and business to work together on stimulating long-term demand and making these inter-dependencies really function effectively.

Alliance performs some spectacular Satyam ambulance-chasing

I was stupefied to observe Alliance Global Services, a privately-held IT services shop, join the Satyam ambulance-chasers by promoting it's "IT Partners Bill Of Rights".  Alliance is hoping to get 100,000 signatures supporting some version of its bill of rights and to have the document serve as a platform to establish a "global ethic consortium for IT services vendors":

1. The right to demand transparency throughout every step of an engagement -- from sales to contracting to delivery and termination
2. The right to fully understand the nature and character of an IT partner and the service that it provides to them
3. The right to fully understand the financial viability of an IT partner
4. The right to be made aware of any impending legal charges against an IT partner, should they arise, as soon as they occur
5. The right to arrive at a mutually agreed upon definition of the term "trusted partner"
6. The right to expect a clear contract that defines fees and expenses up front before any agreement is signed
7. The right to terminate a relationship with no financial penalty in the event of any admitted fraudulent activity
8. The right to demand the existence of a truly independent board of advisers
9. The right to expect the presence of an independent financial auditor accompanied by a set of checks and balances
10. The right to demand accountability for any actions taken within the scope of a technology project or as part of a firm's broader business practices

While I cannot argue with any client requesting any of the above from an IT vendor (or any client of any services supplier in any industry for that matter), this media-marketing is shamelessly exploiting the Satyam situation to market its own services and take advantage of media-hounds hungry to add fuel to this controversy.  One vendor cooks the books and suddenly the whole world of offshore outsourcing is crooked? Would this action really have prevented Ramalinga Raju doing what he did?  Puh-lease!

What goes around comes around

This credit-crisis-fueled recession is testing us far more deeply than merely everyone shaving a few costs while we ride this sucker out. And while it hurts, a little pain should bring about some positives that go far deeper than mere penny-pinching. We need to dig deeper to understand more about what makes us good people: fun to be with, smart to do business with, and decent returners-of-favors. I have always (somewhat naively) operated on the “what goes around comes around” principle, but I truly believe these times will help many of us get what we deserve. I don’t mind doing people favors – I just don’t do them twice if the first one never got returned when I needed it.

But we will come out of this, and we will emerge a bit smarter, a bit leaner, a bit more streetwise, and I firmly hope this will bring the best qualities out of us. We may emerge a few percentage points poorer than when we went into this, but the world we will be living in should be one where we help each other out more, and appreciate what we have.

When I look at the way many corporates and people behaved during the greed years, I sincerely hope these experiences bring a degree of humility to us all. I live and die by my friendships – whether personal or work-related, and I know many of you who have the same principles will get through the next couple of years. However, we all know people who just focus on what they can get out of others and rarely put back – those are the people I fear for in this economy, and I hope learn to act with more humility as a result.

Anyway, I will finish this little diatribe with a couple of points about how to treat our friends and colleagues:

People: remember who your friends are. Stop thinking just about your career and your self-interest, but take some time to get to know people a little better – and not simply those aspects that can further your own goals and ambitions

Work: use this episode to get smarter at what we do. Focus heavily on providing value and put in a little extra time and effort. If you are lucky enough to be in a job, remember the unluckier folks who helped you along the way, and take some time to see if you can help them out. If you are one of the unlucky ones, call in your favors – you will quickly learn who your real friends are...

I write this piece at 37,000 feet above the Atlantic, it's my birthday... and I need a break from this presentation, so forgive me this little opinionated indulgence...just this once :)

Are we demonstrating value?

When we talk about "change", we're not just talking about Washington or Detroit.  We also need to include OURSELVES.

The events of the past couple of months have given us all pause for thought with our careers and what we're going to be doing in a couple of years' (or weeks' / months') time. 

We had a great discussion a few months' back when we talked about the challenges of staying relevant in today's corporate climate, and this current economic shift is driving this need for relevance right down to all employees in the organization.  The "relevance" discussion now goes far deeper than roles and responsibilities, it goes right into demonstrable value-add, and the ability to impact revenue.  Whether you work in sales, operations, finance, marketing etc., you need to be able to tie what you do to your company's mission and revenue stream.

Bad recessions bring out different reactions from companies with their approaches to steadying the ship and readying themselves for sustained profitability.  These reactions nearly always result in staff reductions, reorganizations and aggressive means of reducing both variable and fixed costs.  Past recessions have resulted with most companies "snipping" costs without changing their business models, and several firms even kept hold of all their staff and rode out the downturn in anticipation of recovering much quicker and stronger than their competitors.  Most of the snipping was focused on low-performers.

This time is different.  Most companies - right now -  are snipping staff who do not directly impact their revenue, whether they be a low or high performer.  Staff who may be incredibly talented, but focus on activities that are peripheral to the company's core revenue-generation, are at risk in today's corporate environment. 

Employees at risk in today's corporate climate:

1) Staff working in new product lines which are yet to have matured, or are considered discretionary in this environment;

2) Staff in management roles that are largely administrative and have limited involvement in direct sales / client relationships;

3) Staff who are unpopular and considered to have a negative impact on revenue development;

4) Low-performers, which the company has wanted to shed for a while and now see the long cold winteras a chance to ease them off the payroll with limited reproach.

And if you are unlucky enough to get caught in the cross-fire, your next challenge is to understand why this happened.  Most likely, you were unlucky and need to find a new opportunity that aligns you with another firm's core revenue channel.  But if you dig really deep, you may have to concede that you need to develop your skills and knowledge to make yourself attractive to future employers, so you can directly impact their core businesses.  I believe we'll see many people seeking career changes in the coming year as they concede their current skills and experience are no longer as relevant as they once were. 

New growth and investment areas, such as health-care, renewable energy, new technology development, are going to be the lucky recipients of an influx of talent willing to retrain for long-term career security. Moreover, jobs in the public sector and education are now appearing far, far more attractive than they were a couple of years' ago.

All-in-all, we're moving into an environment where some industries will find their feet, others will decline and some may die altogether.  Many people will be refocusing their careers in new areas that they may not have envisaged in the recent past.  One thing is clear - we are in new era where people are going to have get used to change and learn to adapt themselves to new job roles, new routines... and new expectations.

 

Beware of Satyam ambulance-chasers

Been inundated with calls from several Satyam competitors circling their clients like vultures... read my thoughts over at Think Global.

The Horses spawns a partner: Think Global

Amigos - I'm excited to announce the launch of a sister-blog to Horses for Sources : here ariseth "Think Global", with focus on global delivery strategy, BPO, supply chain and IT services trends.  My firm, AMR Research (God bless 'em) has admirably tolerated the Horses for a long time now, until finally asking if I'll consider extending my verbosity to our research content, to which many of you do not gain access.  I've kicked this off with complimentary access to a new research article entitled "Beware of Myopic Cost Cutting: Use Outsourcing To Be More Competitive in This Economy".

I've always used the Horses platform as an outlet to knock around views, cultivate ideas and take the industry temperature.  So many of you have been part of that.  And, while we might not always have been 100% accurate, we've collectively generated so many gems of insight that I frequently read our commentary to add some color to what I am thinking - and I know many of you do the same. 

The power of the blogsphere is truly extending to the analyst world.  And while some of the other analyst firms have pushed their blog strategies for a while now, I am (for once) going to brag that none of them have come close to cracking the blogging code.  Over here we have, and it's time to take it mainstream.

Horses will not be going away, but will run in tandem with Think Global.  I hope you take a little time to pay a visit.

While you're there, please also check out the blogs from a couple of AMR's industry legends, Bruce Richardson and Kevin O'Marah.  I'll see you over there...

PF.

Obama from the ashes

When we look at the carnage of our economy, it's not too hard to come to one hard conclusion:  we're at rock bottom.  And we may even get worse than rock bottom, but fortunately the English language has yet to cater for an expression of such depths of bottomness, so we'll just stick with "rock". 

The consequences of the next few months' policies are going to shape how we recover from this.  And while many have tried to devalue the importance of the US as the epicenter of the world economy, noone can escape the fact that the US is tasked globally with dragging us out of our current predicament. 

The Chinese have long-boasted that they can shut themselves off from the problems of the West and thrive on their domestic and regional dominance, but the world's second-largest economy is now suffering from more severe recessionary problems than those which Western countries are going through (Iceland aside).  They thrived on the US economic prosperity and its free-spending of the last two decades.

And having just spent three days with the leading retailers at the NRF show, all I can tell you is we're in dire need of an economic stimulus package and some new leadership.  What a time for a new President to take the reigns - and what a mandate he has to make some bold new policies.  Just when we're running out of hope, here comes the audacious one.  Over to you Mr O... you couldn't have dreamed of a better platform to change the world. 

Satyam: It was like riding a tiger, not knowing how to get off without being eaten

A great quote to cap a sad story for Satyam's Ramalinga Raju, who resigned as Chairman today. 

Following the recent issues regarding Satyam’s financial irregularities, India’s IT-BPO services industry finds itself under increased financial scrutiny from Wall St analysts and corporate clients. However, while Satyam has a major challenge ahead to maintain its market position, and is a likely takeover target, we do not believe this fiasco will have longer-term ramifications for the Indian services sector, as long as Satyam’s creative accounting turns out to be an isolated incident and not a more pervasive problem across the sector.

Satyam’s existing customers will ask questions, but are unlikely to switch suppliers, unless Satyam loses a large number of crucial operational staff in the coming weeks. However, Satyam is now at a disadvantage in winning new business in the short-term as it struggles to shake off the current controversy. Plus, some customers renewing existing agreements will be evaluating alternative service provider options, in the wake of the uncertainty surrounding Satyam’s future. Its new leadership needs to move fast to right the ship and placate corporate accounts, and likely prepare the firm for an imminent takeover – the firm’s stock just hit a new all-time low. With Satyam’s strength across software service areas, particularly high-margin enterprise application services – we believe potential suitors include

January 5th: time to shake off the gloom

It's time for people to stop panicking about next year.  

On January 5th it's business as usual, companies will be selling and delivering their services, looking for new avenues that will provide them with competitive bite, operational excellence and new ways of surviving in a tough business environment.  We are part of that.  

Yes, some of us will get laid off - several people I know already have, but we'll find new jobs, or new career opportunities - we always do.  We may get a little poorer, but so will everyone else and the cost of living will get cheaper.

End of the day, we function in a world where we have much better technology and communications than we had 6 years' ago, much more mature global delivery models, and a truly global marketplace in which we operate.  The future opportunity for our careers and our businesses has never had so much potential in the long-term, once we get over these short-term hurdles and adjust to a more challenging business environment. Challenges and change breed new opportunities - and the world won't stop while we try to embrace them.  

We have exciting new technologies being developed and a fledgling new industry for developing alternative energy sources.  And we have a new President arriving with fresh ideas and a fresh energy... in just 3 weeks.

It's time to shake off the gloom.  2009 here we come.

Planetary-sourcing

I received a terrific comment during our debate on scrapping the "O" word from Frank Feather, which I wanted to highlight:

"I agree that outsourcing should be scrapped, but for none of the reasons you cite.

Simply put, outsourcing is a futile term in a global economy. It would mean to send work outside this planet, to another planet.

On this planet, every economy is now interlinked, with one resource pool for human labor and all other inputs, from natural resources to capital."

...I wonder if we can outsource our economy?