Oustourcing . . . a return to a position of normalcy

Posted on August 5, 2010

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This past Monday’s PI Window on Business segment “Outsourcing Revisited: Is It A Viable Strategy?” with IACCM CEO Tim Cummins and public sector expert Colin Cram delivered many great insights, so I would strongly suggest that you tune in to the on-demand version of the broadcast.  In short, you will not be disappointed.

Besides talking briefly about the general effectiveness of outsourcing as a viable vehicle to enable companies to compete in the ever emerging global marketplace, overall economic impact, as well as the numerous challenges of maintaining an adequate level of security in the cloud, for me one particular point stood out.  I am of course talking about Tim Cummins’ statement that outsourcing is in reality and in the context of history, a “return to a position of normalcy.”

Referencing Ronald Coase the British Economist, whose seminal works include “The Nature of the Firm” (1937) and “The Problem of Social Cost” (1960), Cummins indicated that other than a relatively brief period in history, the concept of long-term or cradle to grave employment is or at least was by and large a short-lived concept.  A blip on the proverbial radar screen if you will.

Ronald Coase

Why is this important?  One of the main issues towards which the detractors of outsourcing will point is the likelihood of job displacement.   Depending on your age, and in particular those over 50 . . . I myself have been in a steady holding pattern at 39 for more than a decade, you will undoubtedly recall a time when changing one’s job more than once or twice was a rarity.

In today’s world, being in the same position with the same company for more than 3 years is considered an oddity and to some a sign of a clear lack of motivation.  This was certainly true during my days on the speaking circuit (an activity that I will once again resume this September), when I can remember countless young procurement professionals approaching me after a session telling me that their strategy for both career and income advancement was tied directly to a nomadic mindset in which they would move on to the highest bidder every 2 to 3 years.

Given this monumental shift in workforce expectation, Cummins’ observation raises a number of very interesting questions including;

  • to what degree will outsourcing benefit from a workforce that no longer maintains an expectation that a job with a particular company is for life?
  • what impact will this shift have on the quality of work and output?
  • what impact will this have on countries whose economic engine is slow to make the transition from primary and secondary industry sectors to both the tertiary and quaternary sectors?

Once again, there were so much more ground to cover with Cummins and Cram, and obviously an hour did not afford us with the needed time.

For this reason, we will be airing a special follow-up broadcast on outsourcing sometime in September, so stay tuned to the PI Window on Business Blog for dates and times.

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