July 10, 2012
True Globalization is a Reality...
From the mainstream media to political rhetoric, there’s a lot of negative talk right now (particularly in the U.S.) about outsourcing. While global businesses understand the need to “farm out” certain tasks that could not otherwise be done efficiently or cost-effectively in-house, there’s a wide misconception among the general public that outsourcing only means “taking away jobs and sending them overseas”. This is far from the truth.
There are many types of outsourcing. Some companies “sub-out” non-strategic work such as accounting, payroll, human resources, marketing, logistics, security and janitorial services. Other businesses outsource short-term projects, high-risk projects and complex IT projects. Businesses also create satellite offices to pursue emerging markets overseas, in which case, they hire locals as required by local employment laws and regulations. Outsourcing even happens within the U.S. among other U.S. companies. The list is endless and greatly depends on the strategic vision of the company.
Businesses rarely close shop in America and open shop in another country. In other words, most “outsourced” services and positions with satellite operations would never have been available in the home office. And while there are some functions that at one time made sense to manage in the U.S. such as the stereotypical example of call centers, which are now more often outsourced to places like India, those decisions are made not simply to cut costs but to preserve remaining jobs in America, and keep a company moving forward. Smart businesses know how to optimize global workforces to deliver the best products and services at the best price to their customers. More often than not, a company’s U.S. employee headcount will continue to grow as their global workforce grows.
True globalization is a reality. Companies (and individuals) look for the best way to manage their business and lives. Market forces allow this to happen irrespective of government “bandaids” that stifle global business while controlling supply and demand, which is a lot like trying to control gravity or Mother Nature. It’s just not possible.
Businesses are organic. They grow, they adapt, they change. Companies need to have the ability to evolve in response to their environment (which is now global) or they’ll die. And despite what some may say, businesses are made up of people, and when those people have the ability to focus on their core competencies, they have more time to innovate, expand and lead. It’s time to embrace the benefits of outsourcing and what it can do to help businesses grow. America can lead again if they are willing to embrace change.
Founder & CEO, Tiger-Consulting