Labor is at risk for the almighty buck, but its a strategy that will not last as it will not offer the competititve advantage over the long run. High skilled US workers will not continue to be developed in universities when students realize their jobs will be outsourced at the first opportunity.

The beat goes on IBM Consulting is benefiting from Taiwan banks outsourcing IT to IBM Consulting. Everyone is looking for the cheapest deal they can find. 

 

Taiwan’s financial services companies were told consider outsourcing as the sector faces greater consolidation and competition, and cost savings. Egbert Chan, IBM financial service senior service executive for Hong Kong and Taiwan, said banks should consider outsourcing non-core operations as a way to transform their business. Singapore-based DBS Bank has reduced its IT budget by 20 percent since outsourcing those functions to IBM in 2002, according to DBS Bank IT director Francis Ng.

 

What does this mean for IBM – does it mean they are cheap labor.  Does this mean IBM outsourcing prostitutes its work out to people who will work on the cheap?

Read more in Business
« Collect Money Owed Without The Use of Collection Agencies
Why Punctuality is Crucial in Business »

 

Off-shoring of work to overseas manufacturing plants is also not new. For over 30 years, U.S. multinationals have “off-shored” their manufacturing and R&D facilities in computer chips, chemicals and pharmaceuticals to the U.K., Germany, France, Ireland and, more recently, to China and India.

 

If global firms have to compete effectively for international markets and to retain their position in existing markets, they need the ability to improve their cost, quality, time-to-market and capacity to innovate.

 

The sad part of what is going on in most computer and pharmaceutical companies is that the real development is going on in North America and then outsourced for cheaper labor to support somewhere else. This is shifting the employment to countries that benefit from the labor of high skilled US employees to cheap laborers.

 

Image via Wikipedia