Turning Outsourcing into Near-Shoring

In recent history, the business tactic of outsourcing and offshoring, where companies would hire outside organization from a distant foreign country to perform their business processes, has created a debate among the citizens of the United States and was even topic for debate in the latest presidential election. According to an article in The Washington Post, “the debate over outsourcing has been morphing, and today there are growing numbers of people who think that what started as a sensible, globalized extension of sending some work outside a firm to specialized companies may in fact be creating long-term structural unemployment in the United States”. While there will always be the opposing argument that outsourcing isn’t as “damaging to the U.S. economy as commonly believed”, the US outsources an estimated 8 to 10 percent of its jobs (which can rise up to 50% as we discussed in class) which ultimately means that “somebody invariably loses a job as somebody else gains one”.

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            Other problems exist with outsourcing and offshoring persist due to the fact that the contracted employees are mostly located across the globe in Asia. Laborers are thus disconnected with the company, meaning that they most likely don’t speak the same language, can’t be relied upon to meet a quick deadline, and are less unmotivated since their wages aren’t particularly linked to the success of their employers. Similarly, the distance between the United States and Asia requires greater shipping costs for products than if the contractors were situated locally.

Nonetheless, an article released on Forbes discusses a new firm called Ziptask that offers reliable project managers who administer the outsourcing process themselves and provide reliable freelancers who complete the contractor’s desired task. Although this process is still considered outsourcing (because the company hires outside workers), Ziptask’s goal is promote nearshoring by transferring business to nearby or neighboring countries and “to disrupt the massive $480 billion global outsourcing industry”. Here’s a quick and amusing animated video created by Ziptask that describes what they do:

 

Ziptask Founder Shawn Livermore believes his company is perfect for getting minor projects out of the way in order to stay focus in more important tasks. His company provides workers greater efficiency in the project management of outsourcing as well as bringing jobs back oversees to more local freelancers. While Ziptask may not immediately return the jobs from Asia and decrease the unemployment rate in the United States, they certainly provide the right motivation and initiative for other companies to follow and for improvement in the future.

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            One of the most fascinating aspects of the article for me is that Livermore even goes as far to mention the “theoretical possibility that we could probably outsource our entire job for a while, and no human would notice”. Interesting enough, a worker at Verizon did exactly that for over a year without anyone noticing. He was earning six figures annually and them paid Chinese workers around fifty grand to complete all of his work for him. By offshoring all of his work and freeing up his schedule, the Verizon employee was able to surf the Internet from 9 to 5, yet still ironically “received excellent performance reviews for the last several years in a row, even being hailed the best developer in the building”. This left me thinking about any potential negative side affects of Ziptask, as well as those that can be developed from bringing the offshored projects back to the US.

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6 thoughts on “Turning Outsourcing into Near-Shoring

  1. This is a great topic as it differs from yet supplements and is extremely applicable to class discussions. You start out by giving both sides of the argument about outsourcing, identify the problem, and then offer a solution: Ziptask, which is a very clear and well thought out structure for discussion. What I found especially interesting about this post is the example of the the Verizon employee who outsourced his entire job, yet continued to receive flawless performance reviews. You have very interesting content and effectively used the medium for this type of blog. My suggestion for improvement is to continue to offer your own personal thoughts about the topic. Your conclusion starts “this left me thinking”, but I, as a reader, am interested to know more about these thoughts, since it is clear you did some in-depth research.

  2. You do a good job mentioning the positive and negative aspects for off-shoring/outsourcing. I think you bring up an interesting point that outsourcing work may not be a negative thing, but it depends where and to whom you are sending the work. Outsourcing work within a country or even to neighboring countries might be an improvement. The comment about the Verizon worker who outsourced all of his work reminded me of a video I saw that The Onion made. It is a parody of workers outsourcing their work, and it is pretty funny. Here is the link if you want to check it out since it relates to your post: http://www.theonion.com/video/more-american-workers-outsourcing-own-jobs-oversea,14329/

  3. I enjoyed this blog because it takes something we have learned about like outsourcing and relates it to a new term of near-shoring. Companies like Ziptask have proven to have the potential to make others’ work extremely efficient. Your example of the man working for Verizon shows that outsourcing has made efficiency inexpensive. The fact the Verizon employee could get people overseas to do his work for a small fraction of his salary is mind-blowing. I’m curious to see Ziptask’s potential in bringing these outsourced jobs closer and closer to this country. All around great summary and use of media, but like John I would like to know some more of your thoughts.

  4. This blog post was excellent in taking a topic discussed in class and applying it to a real life scenario. Ziptask is a company that attempts to make a worker’s life easier without the drawbacks of outsourcing to a different continent. It will be interesting to see if this new tactic, near-shoring, will pick up steam in the near future. Like you suggested, will Ziptask have any negative effects? I think that it may be tough for this company to succeed for the long-term because although it’s helping increase productivity, the cost of a near-shoring system seems to be more than sending the work to a Chinese worker for very little pay. Ziptask claims to have many skilled professionals; I assume their working price isn’t cheap. In other words, why would Ziptask become a favorable corporation over the various cheap workers throughout Asia and India. Any thoughts?

  5. This was a really interesting blog post. Ziptask seems to provide a much more reliable service than outsourcing to China or India. After the Excel portion of this class, I know how tricky spreadsheets can be and that one small mistake can change everything. I think that it would be better to send my work to someone who specializes in Excel than to send it to China or India with thousands of other documents and hope that the person working on it doesn’t make a mistake.

  6. This is a fantastic post! Really well researched and you drew your own observations as well. This is obviously a highly debated topic in the US today because it effects the lives of so many individuals. Perhaps this “near-shoring” is the solution. I watched the video and I must say it is pretty convincing. Obviously as you pointed out there will be some problems with Ziptask, but I do think it has some potential. But I also think that outsourcing is a big part of globalization, and globalization cannot be reversed. So I’m really interested to se how much clout Ziptask can garner, and what the future of outsourcing will becoming. Thanks for sharing!

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