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Doubts over business benefits of offshoring

The bank I work at has been exploring the offshoring to India option for about two years now (British public is against offshoring, 2 May). Although costs have not been reduced and projects are failing miserably, they have been marketed as being successful and cost effective, which allows top management to continue with redundancies and increase the number of offshored employees.

Costs of actual offshoring have been hidden as costs under other expenses on balance sheets or are being picked up by other projects with only local resources. When projects do come in late or over budget, they are marketed as being successful because of the need for handover periods.

Truly offshored resources are in fact cheaper than local contractors. However, for every local contractor replaced, it results in two to three offshored employees to pick up the work. Offshoring does have its time and place, but I do not feel it should be for the entire IT function.

Name withheld

June 9, 2008 in Outsourcing | Permalink


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