In the lead-up to the Great Recession and in the troubled economy it created, offshore outsourcing became a common staffing strategy to cut costs and maximize ROI. But according to SearchCIO-Midmarket.com site editor Wendy Schuchart in her recent CIO Matters column, the IT industry is now moving toward reshoring jobs in the U.S. Her column, based on signals from General Motors Co. and other well-known firms, notes that bringing jobs back to the U.S. is a recipe for good press but, somewhat perplexingly, companies seem to be keeping the reshoring of IT jobs hush-hush.
Most of the companies I know don't have accurate repositories and rely on what their staff learns over time and retains. If you want to move this to another geography and add turnover, you have a recipe for trouble.
To follow up, we asked our SearchCIO-Midmarket.com readers, "What's the biggest hurdle with offshoring IT jobs?" We suggested that quality issues, language barriers, turnover rates and time-zone differences might cause troubles and sway organizations one way or the other when considering offshoring outsourcing versus reshoring jobs in the U.S. In our comments section, readers noted that quality issues sit near the top of the cons list, but that's not the only downside:
- "The real question is about knowledge management. Most of the companies that I know don't have accurate repositories and rely on what their staff learns over time and retains. If you want to move this to another geography and add turnover, you have a recipe for trouble. Furthermore, in order to have a successful offshoring experience, you must have good grip on your knowledge assets and be capable of making sure that your vendor does the same for the duration of the contract. Reality has been that, when an outsourcing decision is taken, already a lot of the IC [intellectual capital] is locked in people's heads as cost-reduction measures led to poor documentation quality. This makes KT [knowledge transfer] difficult and very imperfect given the time constraints and the rough emotional circumstances under which those changing jobs in the sending geography 'educate' those picking up the ability."
- "I worked with an offshore development team for a couple of years, and what they generally produced was not what was needed. The communication gap, how people interpret things, just caused a lot of problems with deliverables. This was resolved to a point by having an interpreter who was technical, but by the time you paid both of us, was there really any money saved?"
- "Wholesale offshoring was never a good idea in my opinion, and there is a long list of IT and BPO [business process outsourcing] efforts that went wrong. Too few decision makers nowadays are prepared to adjust their approaches based on facts and figures; too many often just regurgitate the mainstream opinions of the day."
- "A lot is promised in terms of quality and cost savings. Rarely is the quality achieved. There are also significant questions on the cost savings when the total cost is considered. (Increased management time, longer time to market, support from subject matter experts to support them, supplier management, etc.)"
- "It's a total disaster; by the time they come up to speed, they leave."
- "Quality issues are the result of turnover, cultural issues."
- "Quality is what is being sacrificed. The outsourcing company and the company receiving the job don't understand the importance of exchanging the right information to provide quality output."
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Evidently, language barriers and a lack of communication are contributing to quality issues in IT offshoring outsourcing, which are likely motivating CIOs to consider reshoring jobs in the U.S. Our readers also make clear that knowledge management and information exchange are crucial considerations in both offshoring and reshoring decisions, and that ignoring them can really damage the quality of work being performed.
What's your company's approach to offshore outsourcing or reshoring jobs in the U.S.? Are our readers way off in choosing "quality issues" as the biggest hurdle in offshore outsourcing? Sound off in the comment section below.