Since the 1990s, we have heard a lot about outsourcing and its effects on certain economies like India and China. Money has actually moved from the developed economies to the yet developing ones, even as companies look for more avenues to cut costs. But the party had to end, and President Obama is leaving no stone unturned to fulfill his election promise: of bringing jobs back to the US. And this has given rise to a new trend of getting jobs back to the company.
Wikipedia defines insourcing as a situation where a company ceases to contract a business function and begins to perform it internally. This isn’t onshoring, where jobs are brought back to the country, not necessarily in house.
Why is this trend emerging? And what does it mean for the future?
Cio.com’s list includes poor service quality, failure to meet business objectives and the desire for companies to have greater control over the IT function. The causes in manufacturing sectors include political interference, law compliance and reduction of transportation costs. Yet a whitehouse blog page reveals how this is strongly politically motivated.
What does it mean for India which has emerged as a service destination and is now witnessing revenue reduction owing to reduced dependence by the West? Unless India develops its R&D capabilities and its people power, things will only be tougher. The unstable scam laden political climate is only making things worse. We are importing more and more yet exporting less. Unless there is a big move by the industry or the government, things will be tough for India.
(Just for the record: I did the full research and composed the post on my blackberry bold 9780, great browser, great wordpress app)