I try not to be political on these blogs but there was a moment in the recent US presidential debate that raised, again, a point of discussion that has plagued the managed services professional community for a long time. Without assigning blame to either party or candidate, the issue of offshoring (i.e., outsourcing) was raised throughout the debate and it was not positive.
The general thesis was that US jobs are being lost due to outsourcing. This is true. In fairness, it's probably true all over the world. However, what the general public does not understand is the distinction between outsourcing and off shoring. You may say, what's the difference? There is a big difference and here it is.
Outsourcing is a very old model of business that goes beyond IT. Legal and accounting services are two very commonly outsourced functions that most companies do not possess within their organizations. Hence, they outsource it to a third party. Nobody complains that accountants and lawyers are losing jobs because the company outsourced it to a CPA or law firm. Similarly, if the cleaning of uniforms, the use of payroll companies, human resources, R&D, technical support, manufacturing, or any other services used by an organization is transferred to an outside third party, very few of us would likely say that is a bad thing.
Now, what happens when any of the above mentioned services gets handed off to a third party that does not reside inside the country? You get political fodder and confusion for the customer. So, let's help clear this mess up.
- Outsourcing, we've established, is a normal and historically accepted business practice for many organizations.
- Outsourcing does not automatically mean offshoring
- Indiscriminately using outsourcing and offshoring hurts, not helps, the understanding of legitimate uses of managed services
- Offshoring does have a legitimate role to play in our economy
- Not all offshoring means a loss of jobs in the host country
- MSPs need to be aware of these issues in case they are labeled as entities promoting offshoring (or outsourcing).
Politicians rarely do anything well. That's my only political statment I'll make. In this case, I wanted to make a statement to explain the distinctions of outsourcing, offshoring, and managed services. Naturally, I've staked my career long ago on the legitimacy of managed services and IT outsourcing. If done correctly, it can not only save jobs, it can create jobs within the very countries where the end-user outsources.
Let's hope our political representatives, wherever they are in the world, understand and respect the managed services and cloud community for all the good that we do.
