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Outsourcing and Social Responsibility: Not Mutually Exclusive

Posted 21 February 2011 | By | Categories: Blog

You have to hand it to them: The International Association of Outsourcing Professionals (IAOP) knows how to run a tightly organized, high quality show. I’ve covered a multitude of beats during my 30 years as a journalist, which means that I’ve covered countless trade shows, devoted to almost every conceivable industry and niche. From that long experience, I can credibly assert that IAOP’s “Outsourcing World Summit” this year is, simply put, a class act.

Covering these shows can make a journalist feel like Bill Murray in the movie “Groundhog Day”, but the Summit this week is an exception.

I just emerged from the Summit Kick-Off Luncheon, held near the hotel pool and ringed by the picturesque Santa Rosa mountain range. The food was superb; the conversation even better. As someone who has covered aerospace for many years, I was struck by the remarks at lunch of Natalia Khandros, regional manager, global engineering sourcing, Pratt & Whitney.

Pratt & Whitney, of course, is a major aerospace engine manufacturer. “Outsourcing has become increasingly important in the aerospace sector, but aerospace really is underrepresented here at the Summit,” she said. “I wish there was more discussion of the extended supply chain for companies such as ours. Aerospace companies are increasingly spreading their operations to regions that stretch all around the globe.”

To be sure, the aviation industry is in the throes of accelerating consolidation. Driving these mergers and acquisitions is the need to enhance operational efficiencies and reduce labor costs. (See my article on this topic, in the January issue of Globalization Today magazine.)

Applicable to aviation — and all industries — were the keynote remarks made by Michael F. Corbett, chairman, IAOP. I sat in attendance and found his comments of relevance to virtually any company in any industry. He discussed the results of a recent IAOP member survey. With those results as context, he emphasized the “hot button” issue of social responsibility.

Corbett noted that all the overheated political rhetoric lately about how outsourcing exacerbates domestic unemployment might foster the notion that outsourcing’s negative reputation will ultimately overshadow its positive impact on business and society. However, he said, there’s nothing in the survey data to suggest that this is actually the case.

Corbett said that 95% of customer respondents to the IAOP indicate that the political controversy and subsequent protectionist initiatives have exerted no negative impact on their organization’s actual outsourcing decisions. Twenty-two percent do say that they are more careful to avoid awareness of their company’s outsourcing activities, making the matter one of messaging and not reality.

“What is happening is that outsourcing customers and providers are working even harder to make their programs socially responsible,” Corbett said.

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Put another way, outsourcing can help companies do well, by doing good.

That’s an important point, because the term “outsourcing” is a pejorative in many quarters. It’s seen by its critics as a way for companies to cut costs, by relying on low-wage jobs in developing countries — at the expense of higher-paid workers in developed areas such as the United States and Europe. But that’s a glib and misleading simplification that doesn’t take into account the way in which outsourcing reinforces the generation of value-added jobs in advanced economies, while lifting the aspirations and living conditions of the world’s poor.

“Over the years, outsourcing has gone through many forms. Today, we think outsourcing is a global platform for transformation and growth, driven by integrated teams of high-value professionals, using advanced management practices and processes,” Corbett told the crowd. I saw many heads nodding up and down, in affirmation.

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John Persinos
John Persinos

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