projects and potential locations for the work to be done and service providers to do it. 3. contract development, to work out the legal, pricing and service level agreements (SLA) terms, and 4. outsourcing management or governance, to refine the ongoing relationship between the client and outsourcing service providers.

What is interesting in this definition is that it requires, by their own admission in the article, full participation among an organization’s corporate hierarchy to ensure that it is implemented correctly. Executive level individuals have the responsibility to tie in all affected employees in order to evaluate whether the services rendered by the outsourced provider, particularly an off shore team, are not services which may be provided in-house by willing employees without compromising strategic growth and development of the company. What is up with outsourcing, when asked in this manner, is that implementation is not being carried out correctly. I wish I could have answered the young man at the restaurant that his perception on outsourcing was a function of how it was implemented at his company.

Numbers alone will not and cannot explain the need for outsourcing of jobs. When this happens, it alienates employees in the company who feel that they can accomplish those duties in a more efficient manner because of their experience an

This question resonated with me one day after I attended a lunch meeting at a restaurant in Westborough Massachusetts. To those readers un-familiar with the state, Westborough is a town located near the intersection of Interstates 90 and 495. It is a high tech hub housing regional offices for EMC Corporation, I.B.M, Danaher Motion, and other technology related firms.

While having my burger, I saw a group of engineers from a local corporation walking out and I happened to overhear the conversation of a young man who was with the group. He was asking, “What’s up with outsourcing?” to some of his colleagues and presenting quite a worrisome argument on the matter. Other comments followed, but I was stuck on the man’s question. So that afternoon, I set out to answer it for myself.

I began my investigation by first asking why I was going to get involved in this fact finding journey. The answer was obvious to me; I was an outsourced individual providing services to a company like the young man’s. As a private independent consultant, I am the out-sourcee so to speak. Next, I asked what. What is outsourcing? This was tougher than I thought. Certainly I had some assumptions on what this meant, but didn’t really understand it in its entirety and quite frankly didn’t know how complicated it could really be.

Outsourcing is contracting with another company or person to perform a particular function. Almost every organization outsources in some way. By this definition alone I couldn’t answer the “what’s up” portion of what I was wondering about. I started to think however that nothing really was “up” with it. I mean, in some fashion services have been contracted for functions and thus outsourcing was just another typical aspect of doing business and always has been. This is when I realized that what the young man must have been asking was really “What is up with today’s outsourcing?” I will give myself literary license to answer that question.

Today, outsourcing takes on many faces. Some services are outsourced to independent contractors or consultants such as my self, who are regionally located. These, provide services to companies seeking to complete functions in the area of business they are in and charge a rate commensurate with the provider’s level of experience or expertise related to that function. The providers of those services represent the “outsource” which the company seeks for those skills. In essence, the outsourced consultant is a resource which the company can go to when they have a particular need but do not want to fill their competency void or deficit with an additional person on their payroll. And of course there may be many other reasons for this, but for sake of conversation we will focus on those. Value is shared equally among the two parties. Both the company benefits from the expertise and services of the consultant and so does the consultant from the work given to him/her.

Another form of outsourcing, which ultimately is the underlying reason I wrote this article, is off shore outsourcing. This type of outsourcing is similar to the first case in that it represents the exchange of work and services among two parties for a set of functions that need to be met, but the difference is that the consultant in this case resides and operates outside of the country of origin.

I posed the question of this type of outsourcing to both a group of junior and senior engineers that I was acquainted with and to a group of engineering managers from my past. The population was six and I admit that no scientific criteria, was applied to the survey.

Surprisingly what I found was that the discussion was very much geared by personal experience with offshore teams and industry. In one case, a mechanical engineering colleague with twenty plus years in the field, who was just starting to interact with an off shore design team in India, felt that this method of sourcing was poor. In his opinion, the potential problems associated with the exchange of intellectual property and trade secrets represented a “business security risk” and as such did not represent an equitable exchange of services or value. He felt that “one day this will spell out disaster for American industry.” This was quite contrasting to the opinion of the most junior member of the population who viewed the process as one of “innovative global collaboration” and “efficient use of resources” to meet his employer’s demanding goals

The issue of outsourcing was really an issue of perception.

Little mind was placed on the classical definition of out-sourcing which is the “ [purchasing] (goods) or subcontract[ing] (services) from an outside company.

This was important to me because that is exactly what was up with out-sourcing. What was up, was that companies have been out-sourcing since they were created. Nothing really was new except the faces. It is the most fundamental form of business and one can argue that bartering for goods and services was the original form of outsourcing. The question really should lie on “how” organizations outsource.

According to SourcingMag.com, an online resource for IT advice on the practices of business process outsourcing, the process of outsourcing generally encompasses four stages:

1. strategic thinking, to develop the organizations philosophy about the role of outsourcing in its activities. 2. evaluation and selection, to decide the appropriate outsourcing projects and potential locations for the work to be done and service providers to do it. 3. contract development, to work out the legal, pricing and service level agreements (SLA) terms, and 4. outsourcing management or governance, to refine the ongoing relationship between the client and outsourcing service providers.

What is interesting in this definition is that it requires, by their own admission in the article, full participation among an organization’s corporate hierarchy to ensure that it is implemented correctly. Executive level individuals have the responsibility to tie in all affected employees in order to evaluate whether the services rendered by the outsourced provider, particularly an off shore team, are not services which may be provided in-house by willing employees without compromising strategic growth and development of the company. What is up with outsourcing, when asked in this manner, is that implementation is not being carried out correctly. I wish I could have answered the young man at the restaurant that his perception on outsourcing was a function of how it was implemented at his company.

Numbers alone will not and cannot explain the need for outsourcing of jobs. When this happens, it alienates employees in the company who feel that they can accomplish those duties in a more efficient manner because of their experience and

company or person to perform a particular function. Almost every organization outsources in some way. By this definition alone I couldn’t answer the “what’s up” portion of what I was wondering about. I started to think however that nothing really was “up” with it. I mean, in some fashion services have been contracted for functions and thus outsourcing was just another typical aspect of doing business and always has been. This is when I realized that what the young man must have been asking was really “What is up with today’s outsourcing?” I will give myself literary license to answer that question.

Today, outsourcing takes on many faces. Some services are outsourced to independent contractors or consultants such as my self, who are regionally located. These, provide services to companies seeking to complete functions in the area of business they are in and charge a rate commensurate with the provider’s level of experience or expertise related to that function. The providers of those services represent the “outsource” which the company seeks for those skills. In essence, the outsourced consultant is a resource which the company can go to when they have a particular need but do not want to fill their competency void or deficit with an additional person on their payroll. And of course there may be many other reasons for this, but for sake of conversation we will focus on those. Value is shared equally among the two parties. Both the company benefits from the expertise and services of the consultant and so does the consultant from the work given to him/her.

Another form of outsourcing, which ultimately is the underlying reason I wrote this article, is off shore outsourcing. This type of outsourcing is similar to the first case in that it represents the exchange of work and services among two parties for a set of functions that need to be met, but the difference is that the consultant in this case resides and operates outside of the country of origin.

I posed the question of this type of outsourcing to both a group of junior and senior engineers that I was acquainted with and to a group of engineering managers from my past. The population was six and I admit that no scientific criteria, was applied to the survey.

Surprisingly what I found was that the discussion was very much geared by personal experience with offshore teams and industry. In one case, a mechanical engineering colleague with twenty plus years in the field, who was just starting to interact with an off shore design team in India, felt that this method of sourcing was poor. In his opinion, the potential problems associated with the exchange of intellectual property and trade secrets represented a “business security risk” and as such did not represent an equitable exchange of services or value. He felt that “one day this will spell out disaster for American industry.” This was quite contrasting to the opinion of the most junior member of the population who viewed the process as one of “innovative global collaboration” and “efficient use of resources” to meet his employer’s demanding goals

The issue of outsourcing was really an issue of perception.

Little mind was placed on the classical definition of out-sourcing which is the “ [purchasing] (goods) or subcontract[ing] (services) from an outside company.

This was important to me because that is exactly what was up with out-sourcing. What was up, was that companies have been out-sourcing since they were created. Nothing really was new except the faces. It is the most fundamental form of business and one can argue that bartering for goods and services was the original form of outsourcing. The question really should lie on “how” organizations outsource.

According to SourcingMag.com, an online resource for IT advice on the practices of business process outsourcing, the process of outsourcing generally encompasses four stages:

1. strategic thinking, to develop the organizations philosophy about the role of outsourcing in its activities. 2. evaluation and selection, to decide the appropriate outsourcing projects and potential locations for the work to be done and service providers to do it. 3. contract development, to work out the legal, pricing and service level agreements (SLA) terms, and 4. outsourcing management or governance, to refine the ongoing relationship between the client and outsourcing service providers.

What is interesting in this definition is that it requires, by their own admission in the article, full participation among an organization’s corporate hierarchy to ensure that it is implemented correctly. Executive level individuals have the responsibility to tie in all affected employees in order to evaluate whether the services rendered by the outsourced provider, particularly an off shore team, are not services which may be provided in-house by willing employees without compromising strategic growth and development of the company. What is up with outsourcing, when asked in this manner, is that implementation is not being carried out correctly. I wish I could have answered the young man at the restaurant that his perception on outsourcing was a function of how it was implemented at his company.

Numbers alone will not and cannot explain the need for outsourcing of jobs. When this happens, it alienates employees in the company who feel that they can accomplish those duties in a more efficient manner because of their experience an

ation we will focus on those. Value is shared equally among the two parties. Both the company benefits from the expertise and services of the consultant and so does the consultant from the work given to him/her.

Another form of outsourcing, which ultimately is the underlying reason I wrote this article, is off shore outsourcing. This type of outsourcing is similar to the first case in that it represents the exchange of work and services among two parties for a set of functions that need to be met, but the difference is that the consultant in this case resides and operates outside of the country of origin.

I posed the question of this type of outsourcing to both a group of junior and senior engineers that I was acquainted with and to a group of engineering managers from my past. The population was six and I admit that no scientific criteria, was applied to the survey.

Surprisingly what I found was that the discussion was very much geared by personal experience with offshore teams and industry. In one case, a mechanical engineering colleague with twenty plus years in the field, who was just starting to interact with an off shore design team in India, felt that this method of sourcing was poor. In his opinion, the potential problems associated with the exchange of intellectual property and trade secrets represented a “business security risk” and as such did not represent an equitable exchange of services or value. He felt that “one day this will spell out disaster for American industry.” This was quite contrasting to the opinion of the most junior member of the population who viewed the process as one of “innovative global collaboration” and “efficient use of resources” to meet his employer’s demanding goals

The issue of outsourcing was really an issue of perception.

Little mind was placed on the classical definition of out-sourcing which is the “ [purchasing] (goods) or subcontract[ing] (services) from an outside company.

This was important to me because that is exactly what was up with out-sourcing. What was up, was that companies have been out-sourcing since they were created. Nothing really was new except the faces. It is the most fundamental form of business and one can argue that bartering for goods and services was the original form of outsourcing. The question really should lie on “how” organizations outsource.

According to SourcingMag.com, an online resource for IT advice on the practices of business process outsourcing, the process of outsourcing generally encompasses four stages:

1. strategic thinking, to develop the organizations philosophy about the role of outsourcing in its activities. 2. evaluation and selection, to decide the appropriate outsourcing projects and potential locations for the work to be done and service providers to do it. 3. contract development, to work out the legal, pricing and service level agreements (SLA) terms, and 4. outsourcing management or governance, to refine the ongoing relationship between the client and outsourcing service providers.

What is interesting in this definition is that it requires, by their own admission in the article, full participation among an organization’s corporate hierarchy to ensure that it is implemented correctly. Executive level individuals have the responsibility to tie in all affected employees in order to evaluate whether the services rendered by the outsourced provider, particularly an off shore team, are not services which may be provided in-house by willing employees without compromising strategic growth and development of the company. What is up with outsourcing, when asked in this manner, is that implementation is not being carried out correctly. I wish I could have answered the young man at the restaurant that his perception on outsourcing was a function of how it was implemented at his company.

Numbers alone will not and cannot explain the need for outsourcing of jobs. When this happens, it alienates employees in the company who feel that they can accomplish those duties in a more efficient manner because of their experience an

nd as such did not represent an equitable exchange of services or value. He felt that “one day this will spell out disaster for American industry.” This was quite contrasting to the opinion of the most junior member of the population who viewed the process as one of “innovative global collaboration” and “efficient use of resources” to meet his employer’s demanding goals

The issue of outsourcing was really an issue of perception.

Little mind was placed on the classical definition of out-sourcing which is the “ [purchasing] (goods) or subcontract[ing] (services) from an outside company.

This was important to me because that is exactly what was up with out-sourcing. What was up, was that companies have been out-sourcing since they were created. Nothing really was new except the faces. It is the most fundamental form of business and one can argue that bartering for goods and services was the original form of outsourcing. The question really should lie on “how” organizations outsource.

According to SourcingMag.com, an online resource for IT advice on the practices of business process outsourcing, the process of outsourcing generally encompasses four stages:

1. strategic thinking, to develop the organizations philosophy about the role of outsourcing in its activities. 2. evaluation and selection, to decide the appropriate outsourcing projects and potential locations for the work to be done and service providers to do it. 3. contract development, to work out the legal, pricing and service level agreements (SLA) terms, and 4. outsourcing management or governance, to refine the ongoing relationship between the client and outsourcing service providers.

What is interesting in this definition is that it requires, by their own admission in the article, full participation among an organization’s corporate hierarchy to ensure that it is implemented correctly. Executive level individuals have the responsibility to tie in all affected employees in order to evaluate whether the services rendered by the outsourced provider, particularly an off shore team, are not services which may be provided in-house by willing employees without compromising strategic growth and development of the company. What is up with outsourcing, when asked in this manner, is that implementation is not being carried out correctly. I wish I could have answered the young man at the restaurant that his perception on outsourcing was a function of how it was implemented at his company.

Numbers alone will not and cannot explain the need for outsourcing of jobs. When this happens, it alienates employees in the company who feel that they can accomplish those duties in a more efficient manner because of their experience an

projects and potential locations for the work to be done and service providers to do it. 3. contract development, to work out the legal, pricing and service level agreements (SLA) terms, and 4. outsourcing management or governance, to refine the ongoing relationship between the client and outsourcing service providers.

What is interesting in this definition is that it requires, by their own admission in the article, full participation among an organization’s corporate hierarchy to ensure that it is implemented correctly. Executive level individuals have the responsibility to tie in all affected employees in order to evaluate whether the services rendered by the outsourced provider, particularly an off shore team, are not services which may be provided in-house by willing employees without compromising strategic growth and development of the company. What is up with outsourcing, when asked in this manner, is that implementation is not being carried out correctly. I wish I could have answered the young man at the restaurant that his perception on outsourcing was a function of how it was implemented at his company.

Numbers alone will not and cannot explain the need for outsourcing of jobs. When this happens, it alienates employees in the company who feel that they can accomplish those duties in a more efficient manner because of their experience and history within the organization. It is at this level that improper outsourcing practices may damage the quilt that forms the culture within an organization and takes away from the value which it provides to its customers.

One way in which companies can make sure that the processes behind outsourcing implementation are followed is to do like Google™. Google™, which has grown to be one of the brightest and most innovative companies in the world uses a philosophy of involvement to make sure that all employees are tied in with corporate strategy. According to BusinessWeek Online’s October 3, 2005 interview with Marissa Mayer , Director of Web Products at Google™, the company’s innovation stems from its culture of openness and involvement. In her own “rocket ride” with Google™, she admits that she cannot handle all of the tasks she is assigned to alone. One of her and Google™’s reasons for success lies in the belief “that good ideas can and should come from anywhere.” To stay on top of the innovative curve a company needs to identify its key strengths and concentrate on those and employees need to be on board with goals so that they can participate and grow alongside the company. At no point should an employee feel as if they are isolated or segregated from the creative process. Again, this is what is up with outsourcing and its perception: inappropriate implementation.

Too many companies alienate their staff from the business strategies and prevent them from being stakeholders in the organization’s success story. When this happens, offshore service providers are seen as intruders or threats to their well being. For someone like my self, this is very damaging because I want my clients to know that the services I am providing are meant to strengthen their organization’s business objectives and to free up time for their staff to concentrate on creative ideas that will allow their businesses to grow. As an engineering and design consultant I understand that this sometimes comes in the form of task delegation to teams that are offshore. I do this, but make sure that the terms are properly defined and that objectives are clearly identified without compromising the company or its staff’s well being. It is important to make sure that the service is value-equitable.

As the United States moves beyond a manufacturing economy into one of innovation and service, it is important to know that our future relies on the ability of us to choose the right strategies for outsourcing in general, not just offshore. It will be critical for us to be cognoscente of the strengths and weaknesses in all types of outsourcing so that employees of all levels can be assured that the right decisions have been made for them and the organization. For the senior level engineer who is concerned about job security and intellectual property protection, processes will need to be developed so that security critical tasks do not fall into the wrong hands. And for the junior level engineer seeking creative growth within an organization, it is important for him/her to understand the benefit of off loading tasks that are not of value or mission critical to his/her function so that growth opportunities within the organization can be sought (i.e. training, professional development, idea development, etc.)

Consultants like myself, familiar with the complexities of doing business with various types of outsourcing can help answer the question of what truly is “up” with outsourcing. One thing is for sure, outsourcing has been with us since the beginning and will stay with us in the future. It is up to us to figure out how we will manage it.