Offshoring problems

I had only 75 more e-mails to read through before I could head home, and it looked like most of the remaining ones were spam or what I call near-spam. Those are e-mails from salespeople who got your name from the front desk and want you to know how their product has aided many others in your industry. One caught my eye, however, even though I wasn't interested in the product.

The gist of the message was, "Now that you've outsourced and found that all you did was move your problems overseas, where they are more difficult to solve, why not try our new workflow-processing tool and actually solve your problems?" Finally, somebody else gets it! Offshoring makes many problems worse.

Yes, the programmers in India, Vietnam and elsewhere are very talented. But in chasing low-cost programmers, many managers neglect to calculate the costs of having one part of their operations located 12 time zones away.

Our operations centre is located in an adjacent state, so we can get there with a quick flight of just an hour and a half. During half of the year, those operations are in the same time zone as headquarters, and during the other half, they are an hour ahead. If you ignore the local slang, almost everyone speaks the same language. And yet, even though we enjoy far more similarities than we would with offshore operations, we still need to spend time to make sure we're working together and understanding each other.

But despite all this, as a manager I have a fiscal responsibility to review all the ways in which my company's scarce resources can be allocated. Still, each time I look at offshoring, I reach the same conclusion. The hidden costs are large. Moreover, having smart developers tuned in to our business processes and able to discuss their ideas easily with business owners creates improvements in workflow, just like the near-spammer advertised.

The biggest challenge is that too much of our domestic talent doesn't understand this. Very few job candidates seem to take the opportunity to add value. Last year, it took us months to find the right person with the right attitude and the right skills. During that period of lost productivity, I could see some value in going overseas, even with the higher costs.

Virginia Robbins is CIO and managing director at Chela Education Financing

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