Leading Economists, Thinkers and Outsourcing – Part 5: Thomas Friedman

If you’ve been following the previous posts in my economics of outsourcing series, I hope you agree that the thinking of Williamson, Solow, Nash and their colleagues have much to teach us about improving outcomes for today’s underperforming IT Outsourcing relationships. 

Recently, outsourcing has been popularized, debated and indeed lionized in the mainstream press by Thomas Friedman.  His major bestseller, The World is Flat: A Brief History of the Twenty-First Century (first released in 2005 and updated twice since then) stresses the importance of technology and outsourcing as major elements of modern global economic structure.

Freidman’s book identifies 10 “flatteners” that have leveled the global playing field. The rise of outsourcing and related activities such as off-shoring and supply chain networks figures prominently on that list.  Freidman says outsourcing has allowed companies to split service and manufacturing activities into components that are subcontracted and performed efficiently on a global scale. In addition, the ease of offshoring today means that a company can locate manufacturing, call center, help desk, application maintenance, and other processes to a foreign locale to take advantage of less-costly labor and operations.

The emergence of sophisticated tools and the role of technology is another flattener, according to Friedman, because companies can now use the Internet, sophisticated software – including workflow and open source software – to coordinate and streamline items such as sales, distribution, shipping and risk management in real time.  Workflow software protocols in particular have become so prevalent in our business lives that they are helping to create the foundation of a new global platform for collaboration, Friedman says. 

While Friedman did a great job of explaining the potential for a globalized IT delivery capability, we all know the reality is much less successful and more complicated. Incremental progress is being made with the use of certification standards, better project and program management and more sophisticated management and reporting tools. 

But while all of these things are improving the situation, we believe outsourcing in general and offshoring in particular, continues to significantly underperform – for both the customer and the service provider.

Vested IT provides the tools and methodology to create, deliver and maintain a highly performing outsourcing relationship. It is founded in research and has been field-tested in some of the largest companies in the world. Vested IT will deliver the promise of outsourcing by unlocking and fostering innovation within the context of a collaborative, outcomes-based outsourced relationship.