An Ethical and Global Analysis of Software Offshore Outsourcing

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An Ethical and Global Analysis of Software Offshore Outsourcing


Before acquiring its current negative connotation, outsourcing referred to the practice of turning over parts of a business to a company that specialized in that activity. For instance, Cisco Systems, Brocade Communications, and other leading original equipment manufacturers (OEMs) outsource their manufacturing to Solectron Corporation, where I was a summer intern. By partnering with Solectron, OEMs can gain access to the latest equipment, process knowledge, and manufacturing expertise without making substantial capital investments. In essence, outsourcing to Solectron enables OEMs to focus on their core competencies of research and development and sales
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Now, skilled workers are finding that education isn't enough, not when an Indian worker is just as educated and is willing to do the same job for a fraction of the pay. A microchip designer or financial analyst makes $7,000 a month in the United States. The same worker in India earns $1,000 a month.1 Significant cost savings, gaining access to skills not found elsewhere, and providing access to a new market all contribute to the popularity of offshore outsourcing. Nonetheless, if software outsourcing continues, those with less-creative software jobs who update antiquated code, fix bugs, and perform routine programming tasks2 should prepare themselves for career upheaval.

Meanwhile, in India… 3

The thousands of technically astute, English-speaking graduates of India’s elite universities are riding America’s outsourcing wave. Blue-Chip companies IBM, Oracle, and Intel have already established a presence in India, as have promising start-ups. India increasingly is landing high-skilled, highly paid positions for engineers, accountants and financial analysts formerly employed in the United States. West Palm Beach-based Ocwen Financial Corp. offers a case study in how companies are cashing in on India's allure. Seeking to cut labor costs, Ocwen has hired hundreds of workers during the past two years in India, where skilled workers are plentiful and wages are low. Ocwen, which once had nearly 1,000 employees at its Palm Beach Lakes
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