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Shine falls off offshoring

Well, we didn’t see that coming…much. The political climate has changed worldwide and offshoring is no longer as appealing as it was, according to a new report from Genesis10. The 235 executives interviewed for the survey are by now a lot more interested in sourcing their infrastructures and services at home.

“As we expected, there is a growing realization that sending work offshore often translates to decreased productivity, security risks and hidden costs that negate intended cost savings,” said Genesis10 CEO Harley Lippman, quoted in the release.

That’s one factor and as we said at the opening, politics may be another.

We would also point to automation – we’ve been noting the diminishing appeal of hiring loads of cheaper workers for transactional tasks when there is every chance of using even less expensive and more productive robotics or, as you move up the food chain, artificial intelligence instead.

Plus – and this is equally important – in spite of themselves, businesses have in the past tended to go for fads and buzzwords. They always deny this when asked but if everybody was going for something called “outsourcing” (for which you can read, as the US president frequently does, “offshoring”) ten years or so ago, it was always going to hit a peak and then recede a bit. It’s just how these things behave.

So by all means there can be reduced productivity and security risks associated with offshoring, and this will be part of the reason it’s no longer the most popular way to do business. It’s also no longer the newest and shiniest kid on the block, and there are other ways of achieving the same effect. It’s bound to find its niche as business methods always do; we’d bet actual cash it won’t be the massive thing it was a few years back.

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