* Outsourcing on the agenda
I am writing this article only a few minutes after listening to John Kerry concede the election to George W. Bush, followed by Bush’s victory speech. This has been a pivotal election year in which the future of offshore outsourcing has been a hot topic of debate.
Now that we know who will be leading the U.S. for the next four years, I think that this is a good time to speculate on the direction that outsourcing might be taking. First, it is clear to me that outsourcing is not going away any time soon – the die is cast, and I think that the outsourcing movement is, overall, good for business.
That said, I am afraid that, as some in big business are wont to do, they will take the outsourcing movement too far. There are already signs of this, such as sending technical support offshore. While there is clearly a business case for certain types of outsourcing, I feel that some enterprises, particularly those in the tech sector, are going overboard by trying to outsource things that clearly should be kept in-house.
As I mentioned previously, outsourcing – particularly offshore – was one of the hot topics in this year’s election. While each side clearly has its own views on the subject, I do feel that the U.S. government needs to take a stronger role in making sure that the offshoring that is taking place is being done for the right reasons and in the right ways. What I mean by this is that the government needs to take a hard look at ensuring that enterprises that choose to offshore are maintaining regulatory compliance.
For example, I heard recently of a healthcare institution that has outsourced the reading and interpretation of x-rays to a hospital in India. Looking past the obvious (that the doctors reading the x-rays had better be highly qualified), compliance with Health Insurance Portability and Accountability Act regulations is a key consideration. If the U.S. hospital cannot guarantee with absolute certainty that patient information cannot be compromised, then that data should not be sent offshore in the first place.
If you think about it, regulatory compliance is actually a very interesting way for those in political office to influence outsourcing behavior. For instance, instead of discouraging companies from outsourcing offshore by enacting protectionist measures like tariffs, the government could instead make it extremely difficult for those companies to send that work offshore and remain in compliance – and enact very tough penalties for those that are found to be out of compliance.
It is clear that in the next four years, much work needs to be done by those in office in the U.S. and elsewhere to ensure that the outsourcing phenomenon does not get out of hand, and to encourage those companies that choose to outsource to do so in the right way. I wish President Bush and the rest of the elected officials the best in the next term and I am very interested (and somewhat nervous) about what will transpire. Hopefully we will figure out a way that enables enterprises to take advantage of outsourcing while retaining as many jobs as possible and providing high levels of service to their customers, who in the end will be the ultimate bellwether of whether outsourcing will continue to thrive-by voting with their wallets.
I welcome your ideas, suggestions and comments on the subject of outsourcing; my e-mail address is below. Thanks for reading.
