Ahead of the Curve: Offshoring Manager

The allure of major cost savings is causing American corporations to quietly offshore more than ever.

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Offshoring Manager. Offshoring Version 1.0 had its kinks—for example, cultural differences turned out to be more problematic than anticipated. But many lessons have now been learned, such as the importance of on-site management of the offshored facility. And there's a better grasp of what sorts of projects should be "farshored" (for example, to India or China), "nearshored" (to Mexico or low-cost parts of the United States), or "homeshored" to individuals working from home. Most of JetBlue's reservationists, for example, are Americans who happily work from home.

The continuing allure of major cost savings, made more urgent by global competition, is causing American corporations and even small businesses to quietly offshore more than ever. Companies are even offshoring functions formerly thought of as offshore resistant, such as drug development, marketing research, and innovation of all stripes. Tom Anderson, founder and managing partner of Anderson Analytics, adds: "Almost all of the larger companies are trying their hand at offshoring [knowledge work] while trying to keep it as quiet as possible."

Offshoring well remains difficult, requiring excellent managers with superb organizational, leadership, and multicultural communication skills. People with those skills should find ample, well-paying employment opportunities in mid-to-large companies or at offshoring consulting firms such as Accenture, EDS, Equaterra, and Wipro. The demand for Indian workers has ratcheted up costs there, so managers with expertise in working with even lower-cost countries such as the Philippines, Indonesia, Thailand, and Vietnam should be in particular demand.

More info: The Black Book of Outsourcing: How to Manage the Changes, Challenges, and Opportunities (2nd edition to be published in 2008) by Douglas Brown