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Where will outsourcing stand as one or few-person highly talented persons aided by automation and software replace the corporations in the developed world
According to international think tanks, the new trend in Corporate America and the rest of the developed world will heavily impact the outsourcing revenue.
It is now well accepted that large corporations in America is slowly getting replaced by one or few person-companies run by very talented individuals. The new “intelligent and efficient” operations will employ very few people if al all any. The level of inefficiency will be negligible and these individuals running these small nano-companies will earn enormous profits as they conquer the world of business.
The current boom in outsourcing is coming from inefficiency of large corporations. For example, India’s largest IT operation in a project is busy in maintaining the legacy systems codes for a greetings card company in America. There will be no outsourcing contract to the Indian company (in millions of dollars) if the managers of the Greeting Card company would have done their job efficiently and migrated the old 1960 legacy system into Web based systems in time and kept proper documentation of the system. The he Greetings card company’s biggest complaint is that those who developed and maintained this humongous legacy system supporting their business processes retired or left and they have no documentation or clue to what is in there! The only way out now is to bring in an Indian software body shop type organization who can provide enormous number of software engineers at $8 per hour to debug the system, enhance the system and so on.
Well this Greetings Card Company will not be able to sustain in the business world for long. They are heavily reducing staff and showing all signs of typical large American or European companies that have collapsed over time.
However, these companies are slowly being replaced by much smaller companies in America run by one or two very talented individuals aided by the Internet, software automation and Robots. These new companies are hundred times more efficient, provide goods and services at one-tenth the price and are providing a nightmare scenario for many Indian and Chinese low cost companies on the long run.
As large inefficient top heavy Western Corporations with large overhead are replaced by the new generation operations run by a one or very few very talented individuals aided by software automation, robots and productivity tools, the number of people employed will be reduced dramatically and need for outsourcing of typical Indian market type legacy systems software services will just evaporate.
While outsourcing may look great now, in a few years it will just be non-existent. Outsourcing lives eats and thrives on the basis of typical Western operational inefficiencies with high overheads and management mistakes. The long-term future of outsourcing not only bleak – it is out right dead.
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