Why Does Outsourcing Fail?

Before we delve into this topic and skylark our way through the tribulations of why outsourcing I would like to inform you why I feel I am qualified to write this article? The most important reason is that I have headed and managed a contact center (one of the largest in my own country – Pakistan) as well as owned a business that relied on the west for an income.

Now let’s look at the world industry – take any that you feel would outsource any business unit to another concern and you will see that globally people do not have a shortage of money rather they have lost the ability to manage their black berry’s, their laptops, their businesses and social calendars thus making them lose the most precious commodity ‘time’.

Weapons that were supposed to make us more efficient destroyed jobs for secretaries, assistants and line managers thus dumping too much onto one person.  So in reality when some CEO sitting in the west decides that he want to live a few years longer after having had a brain fart from stress and a heart attack that his wife was cheating on him because he was married to his electronic toys he decided to lose what he thought of as excess baggage.  RESPONSIBILITY!

The west overburdened with time constraints and with the realization that people and jobs were being replaced by mechanical toys that would only function if one spent time on them decided to outsource business or you might say responsibility.

Outsourcing started because the west decided that it had lost too much money in wasting time and could not recover its losses irrespective of the high cost that its people had already cost them so they decided to shirk the responsibility and went shopping for someone ready to do their dirty jobs.

As they wandered through Heathrow and JFK they realized that the majority of Asians there were willing to go to the homeland and set up an American shop back home.  After sifting through the nationalities they agreed upon the Indians and opened shop there.  For the past few years Bangalore was hub of activity in India and most companies like Dell etc displayed openly that its contact center was based off-shore.

This spread like wild fire and Pakistan jumped into the game and very shortly the west was abundant with people who had failed at everything that they tried in Pakistan and every job that the west could give them so they decided to tap it with one catch – Greed!

By offering the same results at pennies on the dollar South East Asians who had virtually no experience used their enterprising abilities to get the business with heavy contracts in play.  Yes a cult following started and people in the East found that working at night in a call center was a brilliant excuse to not have to tell your parents where you are.

The best countries that survived this test of time were those who invested wisely.  Take a look at China.  The chinks as we all call them spent close to a decade learning English.  They raised an army in the form of an entire generation that has the ability to speak in any dialect along with technical abilities and can actually quite sensibly offer you the best value for money.  Second they built an industry to take over complete control over production and today the trend is that if it’s designed in the west then the Chinese have the ability to produce it at a billionth the cost.

In case you did not know all APPLE products or as we call them Macs are extremely cheap to produce as apples factory in China sells it to apple.  The best investment that Jobs did was to save his own job by contracting the business out to a country that could actually produce equipment for him at such a cost where even after taxes the retail price and the high markups would only lead to pure profit.  The cheeky Chinese kept coming up with cheaper ways to produce electronics and everything that has a stamp on it from the west.

Today I possess and I-PAD that was from apple and I find it very cumbersome.  I also have two versions of the same thing in android and symbian designed by the Chinese known as Knock Pad and Hi Pad.  My mac has limitations but every time I use one of these hybrid machines they not only run faster they fly.

I am so in love with the aspect that they cost a few pennies that I decided to visit the factories.  I learnt over there that I was a blithering idiot to have bought a Sony PSP for over three hundred dollars and it had limitations.  My host presented me with one that had a built in 5 megapixel camera HDMI output and the ability to catch television signals as well as AM / FM and the best thing was that you could pop in a sim and use outlook express – when I asked the retail price – I almost choked on my beverage when I found out that at the equivalent FOB rate this product only cost less than fifty dollars.

Get what I’m saying.  These toys were radically affordable and excellent and better quality than what you got from a brand name in the west.

Back to outsourcing…  Outsourcing fails because people give in to the seven deadly sins most significant of which are greed and basic bottom line dishonesty. People also do not realize what assets they possess and often make up stories to get contracts.

The west has had its fingers burnt and are no longer ready to give any crucial business to any eastern country.  We need to establish honesty in realizing what our assets are and the losses we will have should we falter on our commitments.

If you are into outsourcing then stop worrying about money start focusing on a lower payback as the west wants you to work hard as well as over smart.  The outsourcing industry is filled with cheeky over smart people who are not educated enough to get any job done.  This is common for all people or countries where this service provision is a high export item.

The best areas for outsourcing that pay well are as follows –

• Knowledge process industry,
• Niche market technical solutions and
• the ability to produce quality at a lowered cost.

If you would like to know how outsourcing can help you and how you can benefit then feel free to contact me on skype and I can tell where to go and how to set yourself up NOT to fail.  As I am a capitalist I will charge you but the best thing is before you call me on skype I want you to make a promise to your self – you will focus on delivering quality and not money and best of all realize that nothing beats hard work!

If you’re looking for me on skype my nick is “ohbyteme”