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RAI, S. 2004. India Sees Backlash Fading Over Boom in Outsourcing. The New York Times (July 14 ).
In recent months, Indian companies have been worried about the backlash to lost jobs in Europe and the United States, but there is now a sense in the Indian industry that this backlash has abated. A more pressing concern for some of the companies is finding enough qualified talent to fill their growing workforce. India's $15 billion software and back-office services industry has grown at about 30 percent in each of the past few years with an expectation of $50 billion in business by 2008. More than two-thirds of the business is with the United States. Infosys, India's second largest software and outsourcing firm, reported a 39 percent increase in its quarterly profit. Nearly two-thirds of its business comes from the United States. The company increased its employee count by 2300, to 28,000 in the quarter and gained 29 new clients, including Reebok, Amazon, Cisco, Apple, and Boeing.
RAJAN, S. 2004. Prosperity and its Perils. Time 163, 9 (March 1) 34.
The article gives an impressionistic picture of the perils of outsourcing work in Bangalore: working long hours, sleeping and showering at work, burnout, substance addiction, relationship breakdowns, sleep disorders, digestive problems and remedies such as dietitians, yoga teachers, and meditation teachers. No evidence is provided about how widespread these problems are.
RAMAN, A. 2005. The Degree Bazaar. OutlookIndia.com (Sept. 5).
The article discusses the rapid growth of private universities in India. Topics include the high capitation fees, efforts to make sure that fees and admissions are set on a reasonable basis to avoid selling degrees, the large number of private institutions that are being founded by politicians and their families, and how the development of these institutions does not necessarily square with national goals for social justice since these schools are mainly only available to wealthy families.
RAMER, R. 2001. Moving Offshore: A Brief History of Global Software Outsourcing. Draft Essay.
The article tells the history of two early success stories in IT offshoring, India and Ireland. It explains some of the reasons that software globalization occurred (labor-intensive work driven by the dot-com boom, telecom boom, Y2K, and widening use of computers in the developed world) before turning to the two country's histories. The story of India includes the movement away from centralized planning with the election of Rajiv Gandhi and his plan to capture a significant share of the software export market through tax subsidies, reduced regulation, and infrastructure development, followed by more liberalization in the early 1990s that led to increased multinational investments in India. The importance of the higher educational system and English as the primary business language are discussed. The story of Ireland focuses on the role of the Irish government to slash taxes and bring in manufacturing jobs beginning in 1968. The software industry grew out of efforts to write software for the DEC VAX hardware built in Ireland. The importance of the Irish higher education system is emphasized, as are later efforts of the Irish government.
RAMER, R. 2001. The Security Challenges of Offshore Development. SANS Institute.
This article gives a good overview of issues related to the security of information systems and data when a client offshores work. The coverage is abstract. It does not discuss specific cases or indicate their frequency of occurrence. Risks include:
" loss of control of conditions under which software is developed,
network complexity increasing to a point where configuration management is
a challenge,
" client and vendor having security policies and procedures that clash,
" making trade secrets, customer data, and financial information available
to a foreign company whose employees are not subject to US laws, threatening the client company's intellectual property,
" non-existent or unenforceable protection of data laws in much of the world.
RAMSTED, E. 2004. The Technological Rise of China was Speedy - And Just the Beginning. The Wall Street Journal (Dec. 20), B1.
This brief article was stimulated by the purchase of IBM's PC division by a Chinese firm, Lenovo Group, and gives some markers of China's technological progress. China is now the second largest purchaser of PCs and has the second most Internet users (almost 100 million); in both cases, the United States remains the leader. The article also describes the concentration of specific technologies in specific regions of China such as television and computer assembly in Guangdong province, notebook production in Suzhou, and telecom equipment manufacturing in Hanghzou.
READ, B. B. 2004. The Lure of Offshore. Call Center Magazine, (April) 30 - 38.
The article gives an overview of many of the issues facing US companies that
are considering sending call center work offshore. Some of the issues that
are considered are travel burdens for far-offshoring; problems of developing nations that are the homes for most offshore companies (poor infrastructure, bureaucracy, corruption, political instability); data security risks; wage escalation in these countries making the value proposition lower; problems knowing how to manage turnover; problems retaining ambitious, college-educated workers in call center jobs where there are few career paths; problems with choosing poor-quality outsourcing vendors if the US company does not perform its search for a vendor with due diligence; trade-offs between costs and having the work done in near-shore countries; lack of fit for offshoring for companies that have concerns about cultural fit, consumer and political backlash and high start-up costs; loss of cost advantage to near-shoring from currency fluctuation; and some suggestions on how to protect data and limit staff turnover.
REDIFF 2005. Rediff interview with Naresh Gupta. (April 21). (Available at www.rediff.com/money/2005/apr/21inter.htm.. Accessed Aug.).
The article contains an interview with Naresh Gupta who has been promoted from Adobe's operations in India into the company's executive management group in the United States.
REICH, R. 2003. Nice Work If You Can Get It. The American Prospect26 (Dec.). (Available at www.prospect.org/webfeatures/2003/12/reich-r-12-26.html).
This article argues that productivity is the main reason for job loss. Two types of work are increasing in number: symbolic analysts (lawyers, bankers, financiers, journalists, doctors, etc.) whose earnings are rising faster than inflation, and personal service workers (cabbies, restaurant workers, security guards, retail workers, etc.) whose salaries are stagnating because of oversupply from immigrants and displaced factory workers. Education is recommended as the way to have high-paying jobs for more Americans.
REIFER, D. J. 2004. Seven Hot Outsourcing Practices. IEEE Software (Jan/Feb) 14-16.
Reifer is a consultant in California. He identified seven practices that companies should follow when outsourcing, based on his experiences working for the Pentagon and as a consultant.
" Outsource only when it makes good business sense.
" Never outsource a core competency.
" Establish win-win conditions with your suppliers.
" Nurture your relationships with your suppliers.
" Measure performance as quantitatively as possible.
" Make exceptional performance financially worthwhile.
" Treat outsourcing as a technology transfer opportunity.
The author provides a generic paragraph on each of these points and lists some outsourcing resources.
REINGOLD, J. 2004. Into Thin Air. Fast Company (April) 76.
This article takes a sympathetic look at the US workers who have lost jobs and who believe that their jobs were lost to offshoring. The article contains a number of personal stories. One of the main sites for complaining about jobs lost to outsourcing is YourjobisgoingtoIndia.com. The Trade Adjustment Assistance Reform Act of 2002 gives federal aid to people whose jobs have been moved overseas but the legislation was targeted at manufacturing jobs and most IT workers are not eligible; a group of former IBM programmers initiated a class action suit in January 2004 against the government to broaden the eligibility to include them. In an August 2003 report by the McKinsey Global Institute, it is noted that 31% of workers who lost their jobs in earlier waves of offshoring never were fully reemployed and 80% took wage cuts. Some cities are hit more by offshoring than others. One example is Colorado Springs, CO, where Agilent did extensive offshoring. Multinational companies are doubly worried about the public relations issues of offshoring: angry at home over lost jobs, angry about offending large markets if they pull back.
RHODES, H., DENNIS, J.C., AND ROACH, M.C. 2004. Overseas Outsourcing: the Risk of Doing Business. Journal of AHIMA 75, 4 (April) 26-31.
This article from the American Health Management Association discusses privacy considerations in medical transcription work outsourced overseas. It discusses key provisions in the various laws that apply to these privacy considerations: HIPAA, Gramm-Leach-Bliley Act, California State Bill 1386, the European Union Data Protection Directive, and India 's (proposed) Information Technology Act. Medical transcription has increased dramatically over the past few years as a result of electronic health records. Demand has outstripped supply and offshoring began in 1994. Contrary to many US company expectations, Indian transcription is not significantly less expensive than doing the work in the United States because of the costs of telephone and Internet connections, technology investment, staff training, management staff, travel, and proofreading costs. It is rather because of the shortage of qualified transcribers in the United States that offshoring is attractive. US companies do not want to hire only trained transcribers and do not like the six months to a year required to do on-the-job training, and many of the graduates of medical transcription programs are not fully ready for the job upon graduation. The article also discusses ways that US firms contracting out these services can protect themselves through data protection audits, indemnification language in vendor contracts, indemnity bonds, escrowed funds, insurance that covers purposeful as well as inadvertent misuse of health information by the vendor, and contract provisions that allow the client to obtain an injunction to stop an existing or threatened improper use or disclosure of health information.
RIBEIRO, J. 2004. Source Code Stolen from U.S. Software Company in India. InfoWorld (Aug. 5).
Jolly Technologies, a maker of labeling and card software for the printing industry, reported that a software engineer at its three-month-old research and development facility in Mumbai had stolen proprietary source code by downloading it to a personal account on Yahoo!. The company suspended work in India and was working with Indian police to resolve the problem. It is uncertain whether the issue can be resolved through the Indian legal system.
RIGBY, B. AND KOLKER, T. 2005. LexusNexus Uncovers More Security Breaches. Reuters, Amsterdam (April 12).(Available at www.tbrnews.org/Archives/
a1528.htm).).
From the Web site. An investigation by LexisNexis, owned by Anglo-Dutch publisher Reed Elsevier, determined that its databases had been fraudulently breached 59 times using stolen passwords, leading to the possible theft of personal information such as addresses and Social Security numbers. LexisNexis, which said in March that 32,000 people had been potentially affected by the breaches, will notify an additional 278,000 individuals whose data may have been stolen. Of the initial group contacted, only 2 percent asked the company to conduct an investigation of their credit records. LexisNexis has found no cases of identity theft such as using a stolen Social Security number to apply for a fraudulent credit card.
ROACH, S. 2004. Offshoring - Myth and Reality. Morgan Stanley Global Economic Forum (March 31).
In this brief article, Roach criticizes the projections of Forester and others, pointing out that Catherine Mann of the Institute for International Economics as doing some of the best analysis. He argues that several factors are responsible for the US jobless recovery including the high-fixed costs of hiring, post-Enron aversion to risk in American corporations, and outsourcing, and he emphasizes the lack of hiring more than the firing that occurs through outsourcing. He reflects on the problem of developing countries having a time lag from when they become producers in the world market to when they become consumers in the world market, and this interregnum holds problems for workers in developed nations.
ROGERS, M. 2005. Can China Build its Own Silicon Valley? MSNBC.com (May 23).
This brief article describes the effort to build an advanced development community around Tsinghua University in the Zhongguancun neighborhood of Beijing. According to the author, there is an effort to build "an entrepreneurial infrastructure that can take a company from napkin doodle to business cards and a health plan in a week." Tsinghua is arguably the best university in China with strong programs in science and technology and a strong business school. The Tsinghua Science Park offers a full suite of services including venture capital, legal services, and property management. The article discusses the importance in this technological rise of "sea turtles," native Chinese who study overseas but return to China to work. Comparisons are made between China's run at America's technological superiority in the coming decades and the overblown Japanese challenge touted in the American press in the 1980s.
ROLAND BERGER STRATEGY CONSULTANTS AND UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT 2004. Service Offshoring. (June).
The authors surveyed more than 100 top-level executives from the European top 500 companies about offshoring strategies. They found that about 40% of the companies had already offshored some work, and most of them were planning to do more offshoring. Almost 50% had done no offshoring and had no plans to do so. The United Kingdom accounts for almost two-thirds of all service jobs offshored from Europe. 80% are satisfied with their offshoring experience, 3% dissatisfied. High-cost countries, including Germany, France, Austria, and Switzerland had the highest satisfaction rates. Cost savings are the main driver, and typically run between 20 and 40%. The most common offshoring tasks are finance, accounting, IT support, and human resources services. Captive and entrepreneurial offshoring were about equally common. The destination for work is most often the United Kingdom, Ireland, Spain, Portugal, Poland, Hungary, and Romania, and India for jobs including large numbers of workers. Many European companies do not believe the US model of offshoring works for them given labor conditions, diversity of culture, and language issues.
ROLAND BERGER STRATEGY CONSULTANTS 2004. Global Footprint Design: Mastering the Rules of International Value Creation. Munich, Germany.
From the Web site. The Rhineland-Westphalian Technical University (RWTH) in Aachen examines offshoring practices in German industry.
" 90 percent of German industrial companies are planning further offshoring in the next five years.
" Two thirds of them believe the quality of production abroad is as good as or better than that in Germany.
" 13 percent are already transferring complex technical systems, and the number is increasing.
" 71 percent of smaller companies (with sales of up to EUR 100 million) will manufacture abroad five years from now.
Four distinct globalization strategies are identified. The trend for German industry to transfer operations abroad is accelerating; 90 percent of German companies plan to withdraw production capacity from Germany in the next five years. Most of it will go to Eastern Europe or Asia. 67 percent of industrial companies reckon that the quality of production abroad is now as good as or better than what they find in Germany. Fully 13 percent of companies are already moving complex systems and technologically-sophisticated components to locations outside Germany. Small and medium-sized enterprises in particular are poised to plunge into a wave of internationalization. 71 percent of companies with annual sales of under EUR 100 million also intend to launch production operations outside Germany within five years. These are the key findings of a study conducted jointly by Roland Berger Strategy Consultants and the Laboratory for Machine Tools and Operational Studies (WZL) at the Rhineland-Westphalian Technical University (RWTH), Aachen.
ROY, V. AND AUBERT, B. A. 2002. A Resource-Based Analysis of IT Sourcing. The DATA BASE for Advances in Information Systems 33, 2, 29-40.
This information science paper examines the factors that influence an organization when deciding to keep development of an information system in-house or outsource it. The most relevant part of the paper to offshoring is the literature review, which briefly discusses the various approaches to studying this problem theoretically: an economic approach, focusing on coordination and governance of economic agents; a social approach, focusing on the relationships between clients and service providers and issues of power, trust, and culture; a strategic management approach, focusing on how organizations use strategy to achieve their goals; a political approach, focusing on political behavior rather than economic rationality; and (the approach the authors favor) a resource-based approach, focusing on the resources required to perform required activities and the strategic value of these resources. A theoretical model is constructed using the resource-based approach and a case study examined. There is no discussion of offshoring specifically. Both authors are professors of information science at HEC Montreal.
RYAN, P. 2005. Challenges Before Indian Call Centres. Domain-b.com (Aug. 27).
The article discusses the current and future situation for Indian call centers. It is expected that North American and UK clients will continue to use Indian call centers, but market maturity and increased competition from other emerging offshore locations (including Egypt) will flatten growth. The author recommends that Indian call center companies invest in reducing agent churn (through training and professional development, transportation services, and onsite recreation and meals), continue their campaign against public sector corruption, choose urban centers strategically, train agents not to give affirmative answers to callers when they are not valid, and promote quality as well as price.
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