Labor Day of 2004 may have marked the nadir of American public antipathy
toward offshore outsourcing. Sen. John Kerry was on the stump using it as a
wedge issue to expand his base of labor support. Don’t worry, my Indian sources
assured me, attitudes will improve after the presidential election. Deals that were
once kept quiet will be announced in the press. Executives won’t be afraid to
speak up in public. One year later, I think we can safely say that these attitudes
are at best marginally better. You would think outsourcing was just a rumor for
all the deals that fly under the radar screens of the media and Wall Street analysts.
On the bright side, a study of 1,012 U.S. adults by Opinion Research Co. reveals that Americans have a much richer understanding of offshore out- sourcing than had previously been understood. ORC’s Jeffrey T. Resnick, an EVP who oversaw the study, says that three in five Americans say that there are positive aspects to outsourcing—including its impact on the world economy. There’s also an understanding that government restrictions on offshore outsourcing would adversely impact corporate competitiveness.
But here comes the bad news:
- Two-thirds of the American public say that outsourcing is bad for the U.S. economy
- Nearly three in 10 people said they were concerned they might lose their job as a result of outsourcing
- Two in five respondents say government isn’t doing enough to protect U.S. jobs
- Many respondents believe that they can influence business decisions by boy- cotting a product or service
For U.S. corporate executives concerned about public opinion and the opin- ion of other stakeholders such as investors or customers, the data suggests that “outsourcing when not handled appropriately can be a volatile issue,” says
Resnick. Yet the larger question is does transparency about offshoring help or hurt U.S. corporations? (See December 2004, Managing Offshore, “The Case for Transparent Offshoring.”)
Just as U.S. customers have come to understand that their clothes are probably not made in America (even if they are designed here), savvy American companies must make the case for how services globalization personally benefits their customers. How do you find out? Hold focus groups or field customer surveys. Is offshoring—captive or outsourced—a deal breaker for your customers?
For his part, Resnick favors offshoring transparency: “It’s an element of human nature: The less you know about something the more wary you tend to be.” That brings to mind a comment by FedExfounder Fred Smith, “Everyone’s entitled to their own opinion. But no one is entitled to their own facts.”
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Do you remember watching a movie called Heaven Can Wait? In the 1978 Warren Beatty version of the story (a remake of the 1941 classic Here Comes Mr. Jordan), a character named Joe Pendleton dies (several times, actually) and then reemerges in a different body to impress Julie Christie, who somehow still “recognizes” him. I ask you to keep this story in mind because, as it happens, this is the final issue of Managing Offshore and yes, we’re coming back in a different (read: improved) body as soon as possible. Last week our parent company announced a joint venture with an Indian publishing company called CyberMedia. The new JV is called CMP-CyberMedia LLC. Each side is contributing resources to the mix—we’re adding Managing Offshore and CyberMedia brings Global Outsourcing magazine. At press time we are unable to announce detailed plans, but our intention is to return shortly with a bigger and better information service that includes a print publication, events, a website, a newsletter and research.
We will continue the popular Offshore 100 study (See January 2005, Managing Offshore) and also aim to launch an event in early 2006. Stay tuned for further notices about your subscription and our near-term product plans. Your thoughts and ideas are valuable to us and we thank you for subscribing to this newsletter. Cheers!
