I had an interesting question asked, is offshoring unpatriotic?

The quick answer is, of course, NO.

If you think about it, the outsourcing or offshoring decision has nothing to do with patriotism. Patriotism is defined by Wikipedia as “love of and/or devotion to one’s country.” ( Or from the Merriam-Webster Online Dictionary patriotism: love for or devotion to one’s country). Offshoring does not denote the lack of love or devotion to one’s country.

Since offshoring is a business decision, you have to look at the business question. Every company that makes a product, or sells a service has some dependence on foreign good and services. If nothing else, the gas to drive the foreign made car (and before someone says that they only drive cars from their country, some of the parts are made elsewhere).

While true, current economic situation in the US might trigger negative thoughts on offshoring, the objective of any company is to make money. The shareholders are the people to whom we owe our loyalty.

I think that companies cannot be patriotic or unpatriotic. Companies are and should be focused on the long-term value to their stakeholders. If that means moving jobs out of the county where they can be performed at a lower cost, then (in a global economy) the price paid for a service outside the US is the real value of that job. Would it be unpatriotic to move an office from New York to Missouri (which has the 5th lowest cost of living in the US)?

The lesson here is not about patriotism it is about economics. If a company choses to offshore – that is their choice and one made for the stockholders. If the economy and their own revenue streams dry up because they have not expanded in the areas where the offshoring is done, then the offshoring companies are responsible for their own financial fate.

Sometimes outsourcing makes sense. But the decision to outsource should be carefully made. Outsourcing does not just mean sending jobs to different countries, outsourcing is also when you hire a vendor to supply a service for your company that you basically don’t want to do.

Domestic Outsourcing
Domestic outsourcing is when both the employer and employee are located in the same country. Cleaning services, facility management, restaurant services in the office cafeteria are examples of jobs that are examples of domestic outsourcing. One of the main reasons for domestic outsourcing is to reduce costs and management of an important service. It is very common to outsource any service that is not a core to the hiring company.

My former employer outsourced everything that was not core business. The company makes software and has thousands of people that do technical support for the software developed. They outsourced the desk side support – not core business.

The same company had a European IT lead that thought telecom should be outsourced, and idea I fought. All things telecom for him were, well, the phone on his desk. I was fortunate to present for the company EMEA VP, and finished my presentation with the question “is telecom core business?” I ran telecom, so this could have just been taken as an opened ended question, but the VP answered “Yes, it is.” End of conversation.

Outsourcing Decisions

Deciding to outsource, especially the first time or for a big project is not easy. Some questions to consider before making your decision are:

1. is this core business
2. will this become core business in 5 years (think big)
3. is this only a question of cost cutting
4. is this only a question of reducing headcount
5. is someone trying to get rid of a problem by sending it away

If the answer to any of these questions is yes, then deciding to outsource is probably not the best idea.

On the other hand, for those same questions yo have to consider these questions, which could change an outsourcing decision:

1. is there a shortage of talent in the area
2. is the talent available simply too expensive
3. would it be impossible to hire and train a team in the time frame available

Here is something people find hard to believe, there is no project too big  to be outsourced. The Treasury Department is going to hire its own mercenaries {oops, “private portfolio managers”} other financial services consultants to manage the $700,000,000,000 bailout.

There is also no project to small to be outsourced, I spent $100 to get some PHP coding done that was out of my skill set. The day it would have taken to learn the code was more valuable than $100 and when the programmer was done I just read his code and figured out what I needed to know.