Outsourcing losing its appeal for many

Recent articles suggest a risinig  trend to bring back work currently being shipped  overseas.  This news of course will be met with hordes of semi-literate press releases from Indian (among other) nationals providing their unrestrained optimism in the perpetual growth of their BPOs, LPOs and other outsourced sweatshops.

To wit:

• Business Week is reporting a trend similar to Toyota opening plants in the United States.  American cities are wooing India based outsource firms like Tata to open up centers.  While these centers are currently modest, one would imagine that American entrepreneurs will be jumping on this trend rather quickly.  In fact, some have been operated similar shops for several years.
• The Scotsman is reporting that at least 14% of those outsourcing from the UK overseas have already become disenchanted and pulled their business back stateside.  The article states,

Two of the biggest factors behind Britain’s manufacturing boomerang, apparently, are shoddy quality in overseas operations and rising freight prices. Logistics and quality are a powerful combination in assessing any business model – and it seems the pendulum might be starting to swing the UK’s way.

In addition, a key reason for moving factories overseas has always been to capitalise on (exploit?) lower labour costs. But it could be this foreign advantage is wearing away as living standards rise in places such as eastern Europe and Asia.

• Delta has stopped outsourcing its customer service after relentless customer complaints.  Companies that outsource these service like Yahoo are frustrating customers and will lose market share (like Yahoo).
• An Australian company came to the conclusion that outsourcing to India is not cheaper, but is actually more expensive in the end.  In a rather excellent and detailed article they debunk many of the myths concerning outsourcing.

It seems that as our economy continues to stagger, many corporations will continue to outsource.  But gradually it will become obvious that it is more cost effective, efficient and successful for a company to keep the work at home.  Every job outsourced means another American out of work.  More importantly, do not fall for the absurdly optimistic press release and clips regarding the Indian outsourcing industry, it is mostly hot air.

[Via http://digitalserf.wordpress.com]