Effects of Outsourcing Companies Positions to Low Cost Countries Part 3

Inside The Outsourcing Debate: How DuPont Benefited from Outsourcing to China:

When we began looking at the debate surrounding outsourcing companies, we came across DuPont, which has outsourced its project of creating online database of fabrics to China. The report published in Outsourcing Asia's website said that by outsourcing to China the company was able to create a 24/7 operation and complete the project before schedule. The report also pointed out why the company had selected China as its destination and also talks about China's future as outsourcing destination for themselves as well as other companies.

How US Government Can Benefit From Outsourcing

Looking at the example of DuPont, where outsourcing helped companies such as DuPont to complete a project in time and also saved costs, we decided to look at how outsourcing might help the government. We came across a report on the US government's IT challenge and how outsourcing can be of help in Outsourcing Asia's website. The report said that, in the year 2005, 50 percent of the federal government's 70,000 IT workers would become eligible for retirement, according to a 1999 study. Also, the Government is IT legacy systems have also aged. So even if young people join the companies’ work force they are not trained in the old system. They have to be trained, which means increase in cost and expenses for Government. This gap has opened doors to the suppliers to offer outsourcing as a solution to the problem. The report mentioned that many Unions and Government workers are against outsourcing because they fear that it will raise unemployment in USA. Although there is a general fear of outsourcing among the public, we believe that if we are able to create a mutually beneficial outsourcing relationship between the two parties and show the benefits to the people, they will begin to feel positive about it.

To achieve early savings, the two companies bought into a structure and effective governance along with establishing good relationship at all levels at both the organizations. They were able to exceed the savings target in the first year of their partnership with the help of open communication, continuous innovation and win-win based solutions. Looking at the example of QinetiQ and Accenture we can say that good outsourcing relationships can create a win-win culture, which can benefit both sides. More and more companies are trying to copy the success of these two companies.