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Articles & Press Releases > Article 3

Outsourcing in the “20-teens”:  What it Means for You

“Prediction: The effort required to outsource a task involving the manipulation of data of any kind will continue to decrease until it will be faster and cheaper to outsource just about anything than it will be to use in-house talent. What will you do today to ensure your prosperity when that happens?”

Seth Godin recently issued this idea to ponder. Does it get you thinking? What are the possibilities in a world with a lot more outsourcing?

He is saying that tasks requiring data manipulation will be the first to be nearly completely outsourced by companies because it will get easier to outsource it. Also, as data manipulation gets easier to outsource, comparing 1) the work required to do that outsourcing and overseeing it to 2) keeping a staff on board to perform the task, will lead to a “no brainer” decision. Outsourcing the task (and everything that involves) will be perceived as being cheaper and less stressful to an organization than using employees to perform those tasks.

Seth goes on to state that following the outsourcing of most data manipulation, business people will find that it behooves their company to outsource “just about anything”.

Just about anything?

What does that mean for both large and small businesses in your country? And what does that mean for you and your career/business future?

First, we need to be forward-thinking regarding what types of tasks and duties will be outsourced, and in what timeframe.

Second, we need to figure out which types of work will be outsourced to companies in a different country. (“Overseas” as I say; “offshore” as they say.)

Third, once we know #1 and #2 (or at least have a good idea), we can make a plan for our career or for our business.

What Work Will Be Outsourced in the “20-teens”?

In recent years, I’ve been surprised by some of the work that has been outsourced (and to whom). When U.S. companies sent their customer service call centers to other companies either here or abroad, I thought, “Okay. That’s do-able (to a point).” When I later heard that a few hospitals outsourced their radiology to doctors who read x-rays and other reports and diagnosed patients from overseas, I thought they were getting very creative.

A local hospital outsources their “floor doctors” to an outsourcing firm. The doctors are physically located at my local hospital. However, they are not hospital employees; rather, they are employees of an outsourcing firm that outsources “hospitalists” (their term for floor doctors). (I found this out after a hospital stay when I got my bill for the floor doctor -- who wasn’t in my group, which created an insurance problem. This could happen to you! I ended up contacting the outsourcing firm and cutting a deal. This firm should have submitted their bill to insurance after the hospital submitted theirs – I suggested that as a future business model in order to avoid situations like mine.)

What else can be outsourced? Remember, the work can either be performed at the customer’s site or at another location. What about:

  • Engineering: civil; mechanical
  • Certain accounting tasks
  • Film and video creation
  • Research & analysis: marketing; financial; pharmaceutical

 

The possibilities, while not endless, may come to seem endless starting in 2010 and for the following 10 years. Some will strike us as “Why didn’t I think of that?” to “They’re outsourcing what?”

Which Work Will Be Outsourced Overseas?

When we’re talking about work being outsourced to a company in a different country, this is when we have concern for local jobs.

Fortunately, there is currently an “Offshore Outsourcing Backlash” that probably stems more from unhappy customers than from anything else.

I’m all for saving money. However, when that so-called savings leads to customers who decide to no longer be customers, and leads to cranky employees who have to fix what the overseas folks broke, I’m not seeing the savings any longer.

I think we’ll continue to see a lot of work outsourced to people in other countries. The customers have a stronger say than employees, though. When I have my “customer hat” on, I let companies know when I’m unhappy with their service and when I’m happy with it.

A company that is good to study regarding their customer service experience is Zappos, which has kept their customer service team “onshore” and goes the extra mile to ensure their customers have good experiences with their company.

Truly, to keep a business thriving through the next 5 to 10 years, pleasing customers is going to be #1 in order to retain existing customers and draw referrals from their good reports.

Therefore, the more we, as customers, voice our opinions about a company’s service, the more they’ll keep us happy by ensuring that their staff or contractors who have customer contact are able to work with us to our satisfaction.

For work such as data manipulation where there is no contact with a company’s customers, we may continue to see the most outsourcing overseas. The “Offshore Outsourcing Backlash” in these areas will most likely stem from each country’s citizenry vocalizing how they feel about so many jobs being shipped off. In a recessionary climate, a larger percentage of people will be concerned, voice their opinions, and some companies (realizing the citizens speaking up are their customers) may change their minds, as some are doing already.

What Should Be Your Plan?

So, what should your plan be?

Keep in mind that while many more tasks will be outsourced, as long as the outsourcing company chosen is in your country, those outsourcing companies will need employees.

If you’re in a corporate career, this might mean taking a job at an outsourcing company. Or, where you work currently (and depending on your position), you could develop a new division for outsourcing and create a whole new business for the company. It could involve selling existing customers first and then finding new business.

If you’re an entrepreneur, it could mean starting an outsourcing company. Once you’ve studied the trends and done your homework, you’ll have a better idea of the types of outsourcing businesses are ready to pay for. (A friend of mine who lives in a metropolitan area recently started a company that outsources bilingual translators to hospitals to translate between staff and patients.)

Or, if you already own an ongoing concern, it means more choices for you to run and grow your business. You will have more choices in front of you regarding which tasks will be performed by an employee, and which will be performed by a contractor. It’s up to you to compare the costs.

What Should You Do Now?

What should you do in the meantime? Pay attention to what is happening with work in your country. Research what occurs in outsourcing over the next two years, and keep reading about it. Discuss it with other business people. Then make a plan for how (as Seth says) you will “ensure your prosperity”.

Glory Borgeson, President
2009 Borgeson Consulting, Inc.