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How clients go broke

I've had a bit of a field day recently on the issue of outsourcing. Here's more bad news. 

"Today the region is sucking   in foreign investment at a rate of $37 billion annually, which places it   second to China in the international competition for capital and light years   ahead of India. Central European stock markets are taking off, too. Growth   ranges from 3.5% in Poland to 6.8% in Estonia. Poverty rates are declining,   and the area's 100 million citizens are turning into a potent consumer market.   Most of the region's countries have flat taxes, with rates as low as 15% for   corporations -- a big investment draw."

So says Business Week Online.

But it gets worse:

"Even now, carmakers and their suppliers are plowing   billions into Central Europe to build brand-new plants and add production   lines at existing ones."

Last week, Britain had a terrible time over the EU Budget. Is it any wonder when you see what is happening 3 hours away by commercial airline? Vinnie Marchandani, in an analysis of research undertaken by Forrester said:

"Finally, Forrester seems to suggest that potential rates for engagements sold as combined consulting and technical work could be as high as $ 200-250 an hour. No client that I know of is willing to pay an offshore vendor that much...frankly IBM, Accenture are not averaging anywhere close to that any more."

See what you're going to be up against in the consulting arena?

Now think about how the lack of investment and relatively high wages is killing off businesses in parts of the UK. The US is faced with a similar dilemma to that in the UK. How does it train its next generation of workers such that their skills remain in demand at a elvel that ensures prosperity rather than ending up on the outsourcers scrapheap?

The future is unquestionably in technology related services. Whether high tech, nanotech or biotech as moot. If your clients are not prepared for what could be seismic changes, then in the face of quality driven yet lower cost goods, I can only see the rust belt of British industry rising inexorably  higher. What does this mean for you and your clients?

 

Technorati Tags : offshoring, outsourcing, offshoring+negotiations

Offhoring yourself

In a discussion with Yat Siu, I asked about the technology boom in China. In his view, China will overtake the US as the economic IT powerhouse of the 21st century in the next 20-30 years.  This is a theme picked up by ZDNet although its timeframe is different. ZD Net paints a very stark picture.

All of which has extraordinary consequences for the profession. It means that you WILL be offshoring. It won't be optional because the services will exist with which to do that both economically and effectively.

Facts + figures on outsourcing

IDC has issued growth projections in Business Process Outsourcing/Offshoring. Although the study refers to large organisations, therre is no reason to presume this would not apply to  the smaller business. It's all about having the will to see where it can go.

Technorati Tags : Offshoring