Offshoring: It's better for everybody

Offshoring is benefiting companies, countries and economies on both sides of the debate, according to attendees at the Better Management Live Conference in Las Vegas this week.

Technology companies in Europe and the US claim the offshoring 'kick-back' is the creation of new jobs in their domestic market which are "higher up the economic value scale" than those jobs which they have sent to countries such as India.

While on an individual-by-individual basis there are clearly those who will be worse off, in general this is having a positive effect on Western economies and workforces, according to Nigel Holloway, director of executive services at the Economist Intelligence Unit, who quoted McKinsey figures.

Chip Greenley, VP marketing and solutions at HP, said: "From a generic perspective it has to be good for the global economy."

Greenley and representatives from other vendors, said cost savings associated with offshoring are being reinvested in the creation of more high-value roles in the domestic market.

"We have taken large chunks of our business and moved them overseas," said Greenley. "If we know that by offshoring our accounts payable handling we will create the budget to hire 200 new hardware and software engineers then I can tell you it is going to happen."

Art Cooke, president of SAS International, agreed with such a strategy.

"We try to do the sensible things and do what is best for us," said Cooke, who said that may include outsourcing some "background work" but warned against outsourcing any development of core business or handing over the reins on any project linked to the growth of the company.

Cooke added that those who are currently getting heated about a large number of less skilled jobs going overseas are guilty to some degree of a lack of ambition and expressed surprise that in "a knowledge economy" there is such anger over the loss of back-office jobs.

"Would people really rather their son or daughter was studying how to programme some small part of an ERP system or working towards something genuinely innovative and cutting edge?" he said.

Cooke believes the fright of the offshoring phenomenon should encourage Western economies to remember to keep innovating and generating invaluable new skills sets.

"If an economy isn't going to innovate it deserves everything it gets," he said.