Negatives of Outsourcing

"...there is a situation today where employees have started fearing job losses. This gives rise to lower motivation and thereby decline in services. After all who would like to serve an organization that he feels is going to sack him for all his services."

So the biggest negative aspect of outsourcing that people think about, especially in the United States, is the loss of numerous jobs to developing countries in order to save costs. Organizations that might be perfectly happy without outsourcing are being backed into a corner. In order to maintain a competitive advantage, or at the very least to keep up with the pack, these companies feel like they absolutely have to outsource, outsource, outsource...

What is your opinion on this? Are companies really backed in a corner with no other option but to outsource? Or is it just the easiest way to cut costs? On an ethical point, is it worth it to save money but cost people there jobs and their livelihoods? Where is the line ultimately drawn?

"IT Outsourcing Company Posts Unprecedented Revenue Growth"

In an economy riddled with failing businesses, major IT outsourcing markets are experiencing double digit percentage growth. Tata Consulting Services (TCS) and Infosys Technologies both posted very strong revenue growth for the quarter ending September 2010. TCS posted revenues of $2 billion for the quarter and a net income of $455 million. 

TCS CEO, N. Chandrasekaran attributes this meteoric rise to his team's "agility to respond to these opportunities across markets and more importantly, execute flawlessly". With the increased demand for IT outsourcing, these companies are hiring in large quantities, which increases the job supply and backs what we discussed early in class: that jobs related to IT have some of the highest rates of increase in any market. 


One of the reasons TCS is growing to quickly is their innovativeness. In the past quarter, they have applied for 380 patents, and been granted 64 of them. This just goes to show that their intensive innovativeness is one of their strongest assets and will carry them far in combination with their very agile team of IT specialists. 


This shows some of the positives of outsourcing. Next week I will to discuss some of the negatives. 

http://it.tmcnet.com/topics/it/articles/110740-it-outsourcing-company-posts-unprecedented-revenue-growth.htm