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IT insourcing vs. outsourcing: Readers debate selective outsourcing

In this CIO Chatter, our readers respond to a recent column on IT insourcing vs. outsourcing. What are your views in the selective-outsourcing debate?

There are some hard-to-argue-with business benefits that accompany an offshore outsourcing strategy -- namely, that it allows companies to enter foreign markets and often operate at a lower cost per head. As such, for a number of years now, offshore outsourcing has seemed a cost-effective way to grow the business, especially in times of economic hardship. But questions of ethics still loom large in the IT insourcing vs. outsourcing debate.

In a recent SearchCIO-Midmarket column on offshore IT outsourcing and the ethics behind it, we proposed that companies might be well served to revisit the notion of insourcing, specifically how a selective outsourcing strategy fits into the larger U.S. economy. "This is where CIOs have the opportunity to support the business' bottom line by thinking nationally but acting locally," we wrote.

To learn what readers had to say on this hot topic, we asked, "Do any ethical implications of outsourcing play a role in your staffing strategy?" We quickly found that not everybody agreed with our patriotic proposal:

  • "To take such a microview of economies seems somewhat short-sighted. The U.S. economy is so dependent on the global economy that focusing just on keeping jobs in the U.S. does not address the fact that jobs in other countries also affect the U.S. economy and business growth. We are all connected."

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What we proposed as the "circle of life" in the U.S. economy doesn't necessarily circle back on a one-to-one ratio. "There's an assumption that by shifting money into foreign markets, those markets will eventually shift that same capital back to the U.S.," we noted. But check out the U.S. trade deficits: $500 billion annually and growing. We have to acknowledge that resources sent out don't always re-grace our shores.

The insourcing vs. outsourcing debate remains ethically charged for obvious reasons. As noted in the column, Apple Inc. has taken criticism for offshoring the manufacturing of iPads and iPhones to gigantic facility Foxconn, where conditions are reportedly not on par with facilities in the U.S. There are also questions of how the U.S. could be affected in the event of a natural disaster or other event that cuts it off from worldwide resources. The following comments from our readers reflect both sides of the debate:

  • "Working conditions at Foxconn are allegedly inferior to what would be legal in the U.S. I don't think there is any question that this has been proven -- it's not 'alleged' anymore."
  • "Not outsourcing means you have to grow your own wheat and vegetables in your backyard. When India can import Intel processors or Microsoft OS, what's wrong in sending software jobs to Bangalore? Too much protectionist measures would have reciprocal effects."

One reader was in great support of our proposal, or at least one that meets the lofty ideals of improving work conditions, stabilizing the economy and bringing more equality to the distribution of wealth:

  • "While I agree that business requires selling at a profit, the profit motive, disconnected from any sense of social responsibility, is fundamentally unsustainable. We are evolving into a plutocracy where the 'serfs' work to fulfill only their most basic needs, while the corporate elite accumulate increasingly wasteful and unjustifiable wealth. Historically this scenario leads to revolution. People need to envision possibility in the future, not an inexorable slide to the bottom.

This insourcing vs. outsourcing debate played a role in the 2012 election -- and the debate continues on a worldwide scale. What say you about selective outsourcing? Let us know what you think in the comments section below.

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What strategy will best drive U.S. business sales and growth going forward?