The debate on outsourcing

Most of the stories we write in CDN and in our sister publication Computing Canada about outsourcing are positive.

And why wouldn’t they be? Outsourcing IT services and infrastructure is an excellent way to save a big company a lot of money and make a small organization more efficient and focus

on core competencies. It is with smaller organizations where the channel has really helped out by providing a host of offerings from help desk to storage virtualization.

With the onset of two major elections here and south of the border the debate surrounding outsourcing has turned from promoting these obvious advantages into discord and dissent.

On the pro-outsourcing side is Hewlett-Packard CEO Carly Fiorina, who has publicly said that outsourcing, especially to countries such as India, will give U.S. companies a competitive advantage.

In the pro-nationalist camps the argument is basic: Outsourcing is the unnecessary export of jobs.

Fiorina’s point is simply this: Concentrate on innovation and then outsourcing isn’t a problem.

And, who’s to say she isn’t right? Canada and the U.S. have definitely taken the lead in this category over the past century.

The protectionist front isn’t resting on the U.S.’s track history of innovation. It is, for example, in the midst of creating legislation to discourage American companies from outsourcing calls to foreign call centres, including Canada. The Canadian government will no doubt challenge this under North American Free Trade Agreement rules because by not doing so it would cost the country thousands of jobs.

It is my belief that the outsourcing movement has built up too much momentum to reverse itself. The key point is that outsourcing offers companies a competitive advantage. In this age of a global economy how can companies ignore this? They can’t.

The only way is to change the rules. Bring in legislation that would protect jobs in Canada and the U.S.

The problem with that is our political leaders, be they George W. Bush, Paul Martin, John Kerry, Jack Layton or Steven Harper, have committed themselves to freer trade and a global economy. So really there is no choice but to outsource.

Tech Data Canada president Rick Reid points out outsourcing can work both ways. “”The market is going to make it happen. How can we avoid it?

“”Software developers have to find ways to drive costs out of their business models.””

He adds that people weren’t too upset when BMW outsourced manufacturing to South Carolina.

“”It seems o.k. when it comes this way.””

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Jim Love, Chief Content Officer, IT World Canada

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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