Outsourcing:: The Trade Winds

Most of the global folks have a limited understanding of outsourcing.
Wisdom,maturity and understanding of global economics[limited knowledge, you don't need a Ph.D] are inversely proportional to the understanding of the word "OUTSOURCING".

I randomly asked a mixed audience and following are their understandings of Outsourcing

• Sending work to "cheap" country
• making work happen 24 hours
• You do the thinking job, and some one else will do the acting job

Well the above statements might be good, but not good enough!
"Out" "sourcing" means you are sourcing out the work to a different party- it could be a new department[In sourcing],new company [any where not necessarily in the low cost countries of the world].

• Why should a company outsource?
• Bottomline is to be more profitable
• So why take away my job?
• Well some one else will do the job for almost 60% less of what you are doing[Don't you buy stuff in ThanksGiving and Christmas Sale?]
• It is hurting the US economy
• Bulls*&@#, it is actually helping it big time, the process,workflow based tactical jobs are being outsourced, this makes the population more competitive and people will start focusing, investing time and effort back in education.
  
• For the developing nations, outsourcing will create jobs[even though they are tactical,the young workforce will learn the crux of the process and will graduate to a new job or move up the value chain in the same outsourcing industry]. Economy will boom and more opportunities for retail/consumer markets which is again open to the Global players.
• When economy in the developing nation booms, the life style will go up and the new life style demands will create revenue opportunities in the developed nations like the Boeing case.
  
• Read Boeing Global Strategy Takes Off
• With the economy booming in India, Aviation is seeing bombastic growth. The air carriers of India placed orders with Boeing [Air India placed a whopping $7 B order Whoa!]and this demand is creating Boeing hire workforce in US, this is what I call the "Water Cycle Model"[No No, Not the Software Development Model but the natural water cycle]

A near future trend
The world will very shortly see low paying jobs being created in Developed countries to compete with developing nations. The Business Processes will be out sourced to a company across the street, where folks are ready to do the job for lesser pay[Let us say minimum wage per hour,most of the times these folks are uneducated and/or folks who want to get into "decent" jobs, Ex: Some Janitors,or Part-time employees might be willing to do the job, if you look around there would be a lot of them]. Some of the so called "strategic" parts would be outsourced to the other geographies of the world. I know of a Huge Bank that started operations in SriLanka, but given the poor spoken language[English] skills, the bank outsourced all its data entry work to SriLanka. So innovation lies in mapping the right requirement to the right geography.