by Beth Bacheldor

Outsourcing Overseas Means What?

Jun 09, 2010
Enterprise Applications

Depending on who you ask, outsourcing overseas, aka offshoring, has different meanings. What’s yours?

Sen. Blanche Lincoln may have won the primary against Lt. Gov. Bill Halter in the runoff for Arkansas’ Democratic Senate nomination, but the winner of a debate between the two I’ll leave to you.

Several weeks ago, the Associated Press reported that the two democrats were in disagreement over outsourcing—specifically, Lincoln’s claims that Halter helped manage a company that sent American jobs overseas. You can read that article here.

The center of that debate had more to do with semantics than substance, if you ask me. You see, Lincoln said she thinks outsourcing jobs overseas means sending work abroad that could have gone to Americans. Halter (on sort of the other hand) said he thinks it means cutting jobs and replacing them abroad. What, I ask you, is the difference? Therein lies the rub.

You see, during the political stumping, Lincoln had been criticizing Halter for his work on the board of WebMethods (now part of Software AG, which in 2006 said it had cut costs by doing more product development in Bangalore, India.) So, Lincoln said Halter outsourced American jobs overseas. But apparently, while WebMethods didn’t pick Arkansas or anywhere else in the U.S. when it chose to open an office in Bangalore, there’s been no evidence presented that it cut any American jobs to do so, the Associated Press reported.

To Lincoln, the Bangalore jobs were new jobs that were put in India, as opposed to here, given to Indians instead of Americans, and thus constitutes offshoring. To Halter, outsourcing means taking a job here and moving it overseas while also eliminating the position of the person that was performing it here.

I did a Google search on a definition for outsourcing, and here’s what I found: the transfer of a business function to an external service provider; the process of subcontracting to a third-party; purchasing an item or a service from an outside vendor to replace performance of the task with an organization’s internal operations; the practice of using subcontractors or other businesses, rather than paid employees, for standard services. One can easily add “overseas” into any of these definitions for a more apt description of offshoring; ror example, the process of subcontracting to an overseas third-party or the practice of using overseas subcontractors or other businesses, rather than paid employees.

If one were a stickler for saying what you mean, then it appears Halter has it right. In other words, based on these above definitions, it appears WebMethods didn’t outsource. But if one leans more toward meaning what you say, then Lincoln is on the winning side, methinks. Her definition allows for more nuance, and in today’s complex business world, nuance has power. So readers, what do you think?