ABI/TRADE AND INDUSTRY. 2004. IT Outsourcing. The Controller's Report 14 (May).

This one-page article gives a useful overview of the hidden costs associated with IT outsourcing: evaluating vendors, managing the contract, enhancing security, traveling to offshore sites, and severance costs for laying off employees. In general, the cost for choosing a vendor and writing the contract is approximately equal to 3% of the contract cost. Average cost to manage an IT outsourcer is $300,000 per year. A hypothetical example of all the costs, prepared by Gartner, is given in a table.

AGGARWAL, A. 2004. Moving Up the Value Chain, From BPO to KPO. Evalueserve (Oct. 2). ACM Job Migration Task Force Meeting (Oct.) Chicago, IL.

This lecture provided definitions and statistics on current and future IT and business process outsourcing, the movement from low-end to high-end jobs, knowledge process outsourcing, and offshore destinations.

AGRAWALl, V. 2003. Offshoring: Is it a Win-Win Game? McKinsey Global Institute (Aug.)

This report is the first general report from the McKinsey Global Institute based on their work on IT outsourcing and BPO in India. Topics include: what drives offshoring, the economic benefits of offshoring, who is offshoring and where do they go, services that can be offshored, the impact on employment, the impact on the economy, the resilience of the US economy, why it is so difficult to offshore, and how to handle worker displacement.

ANDREWS, S., CAVANAUGH, J., HARTMAN, C., KLINGER, S., AND CHAN, S. 2004. Executive Excess 2004. Institute for Policy Studies and United for a Fair Economy.

This report is issued by two progressive organizations, the Institute for Policy Studies and United for a Fair Economy. Most of the report is not relevant to offshoring. However, in a section on correlations between executive salaries and various other factors, the report shows that the top executives at the 50 largest outsourcers earned an average of $10.4 million in 2003 which is 46% more than the group received on average in 2002 and 28% more than the average large-company CEO. These 50 companies have been heavy supporters of political action committees in the 2004 election. The report notes similar positive correlations of executive salaries to those who make political contributions, take an active role in political fundraising, and have high levels of corporate political contributions. There is no effort to untangle cause and effect.

ASPRAY, W. 2004. (Offshore) Outsourcing Overview, ACM Job Migration Task Force Meeting, Chicago, IL. (Oct.).

This lecture presented an overview to the ACM Job Migration Task Force at its first meeting. Topics included data, companies and nations that send IT work across their borders, companies and nations that do this work, a case study of India, and economic and political considerations.

ATKINSON, R. 2004. Understanding the Offshoring Challenge. Progressive Policy Institute (May 24). (Available at http://www.ppionline.org/ppi_ci.cfm?contentid=252655&knlgAreaID=107&subsecid=123 ).

This is an excellent overview article. The author is the vice president of the Progressive Policy Institute and head of its Technology and New Economy Project. The report discusses four responses to offshoring: ignore and do nothing, protectionism, subsidizing companies through tax and regulatory relief, and innovation and adaptation to being part of a world economy. He discusses offshoring trends: which countries, what kind of work, how many jobs, factors working against large-scale migration of jobs, and the threat from automation. He discusses the increase in technology by identifying multiple enablers of outsourcing and advantages and disadvantages to companies that outsource. He considers whether offshoring is destroying good middle-class jobs. In an interesting historical perspective not found in many other outsourcing studies, he considers claims made in the 1940s, 1950s, and 1960s of a new economy that does not play by the old rules as a way to evaluate recent claims about structural changes in the economy. In the most politically partisan section of the paper, he debunks eight myths about outsourcing (three by pessimists, five by optimists).

BAKER, S. 2004. Software: Will Outsourcing Hurt America's Supremacy? Business Week (March) 84.

The article traces the lives of two elite students who are just finishing their computing education at Carnegie Mello and IIT Mumbay and the prospects for their careers. The greatest strength of the article is the personal view that it gives of the meaning of outsourcing to careers in the software profession. The end of the article has information about different software jobs (architects, researchers, consultants, project managers, business analysts, and basic programmers), typical salaries and salary trends for each of these professions in the United States, and predictions about the fate of these occupations in the United States in the future.

BALASUBRAMANIYAN, M. AND GUYER, L. 2004. Face Off: Do Offshoring's Benefits Outweigh Its Drawbacks?" Network World (July 5) 42.

These are pro and con arguments. Balasubramaniyan is a general manager at Wipro Technologies; Guyer is president of Alliance@IBM which is a Communications Workers of America union. Balasubramaniyan makes a predictable argument. There are two notable points in his presentation. (1) In analyzing these issues, it is useful to distinguish between offshoring through vendor partners and in-house offshoring. (2) Most of the reasons for outsourcing are well known, but he puts the call for local markets well: "Offshoring also helps a company be closer to its global customers, thereby providing appropriate offerings to its regional market and ensuring speedier problem resolution. Developers and support personnel in the relevant geographies have a better understanding of customers' needs, regulatory compliances and regional preferences, and can better implement the product or provide the service." Guyer gives three arguments against offshoring. (1) Outsourcing results in lower customer satisfaction - he complains about the language skills of the vendor's employees and gives examples of a lower quality of service in a particular call center. (2)The cost savings of outsourcing are counteracted by even greater productivity losses. (3)There is a high level of offshoring failure -he cites Gartner prediction that one in four offshore projects will fail in 2004.

BARDHAN, A., JAFFEE, D., AND KROLL, C., 2004. Globalization and a High-Tech Economy: California, the United States and Beyond. Springer-Verlag.

Description from Amazon.com. High-technology and globalization are arguably the two most important forces driving the US economy today. This book analyzes how they interact and the implications of that interaction. The methodology applies data and statistical analysis to determine the impact of these forces over a broad spectrum of the US economy. Key topics addressed include why the US economy runs a continuing trade deficit in manufactured high-tech goods, why high-tech firms steadily lose manufacturing jobs while creating professional jobs, and why high-tech industries rely on foreign outsourcing for much of their manufacturing.

BATCHELOR, B. 2003. Will Wal-Mart last forever? Culture Watch (Dec.).

The author of this opinion piece states that customer dissatisfaction with Wal-Mart might eventually lead to Wal-Mart's demise. The author contends that consumers hate Wal-Mart but shop there only to stretch their budgets, while in contrast consumers rave about Target and Costco. "The notion that Wal-Mart's aggressive expansion has destroyed small-town America is nearly universal. Recently the store has faced censure for paying its employees substandard wages and for hiring illegal aliens. Public outrage could reach a point where shoppers turn away from Wal-Mart and give their business to retailers viewed as more employee -- and consumer - friendly."

BHAGWATI, J. 2005. A New Vocabulary for Trade, Wall Street Journal (Aug. 4) A12.

This distinguished Columbia University economist argues against Tom Friedman's "the world is flat" thesis. He points to comparative advantages held by the United States such as strong infrastructure, strong venture capital, an ability to attract talent from around the world, and a culture of inventiveness. He also points to problems with education in India and democracy in China. Instead of Friedman's approach, Bhagwati reminds his reader of a theory of "kaleidoscopic comparative advantage" that he put forward ten years earlier, where countries gain, lose, and regain comparative advantage under rapidly changing circumstances.

BRITISH BROADCASTING CORPORATION 2005. China Plays Down the Nuclear "Threat". BBC News (July 16).

The Chinese government has downplayed remarks by Major General Zhu Chenghu suggesting that China might use nuclear weapons if the US attacked it over Taiwan by stating that the remarks were the general's opinion and not official Chinese policy.

BROOKS, F. 1995. The Mythical Man-Month. Addison-Wesley Professional Publishing.

Book description from Addison-Wesley. The Mythical Man-Month is a blend of software engineering facts and thought-provoking opinions. Fred Brooks offers insight for anyone managing complex projects. These essays draw from his experience as project manager for the IBM System/360 computer family and then for OS/360, its massive software system. Now, 20 years after the initial publication of his book, Brooks has revisited his original ideas and added new thoughts and advice both for readers already familiar with his work and for readers discovering it for the first time.

COLVIN, G. 2005. Can America Compete? Fortune (July 20).

The article investigates the crisis in confidence in America about continuing to be competitive in the global marketplace. There is a discussion of the failing of the American K-12 education system, the lack of American students enrolling in higher education in science and engineering, the departure of foreign students to their home countries in record numbers after receiving their degrees, loss of jobs for American workers, increasingly strong educational systems in other countries, wage stagnation from foreign competition, education as a possible policy solution, the success that the United States had with education reform as it moved from an agrarian to a manufacturing nation, and the value of immigration reform to attract and retain foreign students and science and technology professionals.

CUSUMANO, M. 1991. Japan's Software Factories: A Challenge to U.S. Management. Oxford University Press.

From Amazon.com. Though Japan has successfully competed with U.S. companies in the manufacturing and marketing of computer hardware, it has been less successful in developing computer programs. This book contains the first detailed analysis of how Japanese firms have tried to redress this imbalance by applying their skills in engineering and production management to software development. Cusumano focuses on the creation of "software factories" where large numbers of people are engaged in developing software in cooperative ways, i.e., individual programs are not developed in isolation but rather utilize portions of other programs already developed whenever possible and then yield usable portions for other programs being written. Devoting chapters to working methods at System Developing Corp., Hitachi, Toshiba, NEC, and Fujitsu, and including a comparison of Japanese and U.S. software factories, Cusumano's book will be important reading for all people involved in software and computer technology as well as those interested in Japanese business and corporate culture.

DIAMOND, J. 2005. Collapse, How Societies Choose To Fail Or Succeed. Viking Press, Penguin Group, New York, NY.

Description from Penguin Group. Diamond probes what caused some of the great civilizations of the past to collapse into ruin, and what can we learn from their fates? Diamond weaves an all-encompassing global thesis through a series of fascinating historical-cultural narratives. Moving from the Polynesian cultures on Easter Island to the flourishing American civilizations of the Anasazi and the Maya and finally, to the doomed Viking colony on Greenland, Diamond traces the fundamental pattern of catastrophe. Environmental damage, climate change, rapid population growth, and unwise political choices were all factors in the demise of these societies, but other societies found solutions and persisted. Similar problems face us today and have already brought disaster to Rwanda and Haiti even as China and Australia are trying to cope in innovative ways. Despite our own society's apparently inexhaustible wealth and unrivaled political power, ominous warning signs have begun to emerge even in ecologically robust areas like Montana.

DOSSANI, R. AND KENNEY, M. 2004. Offshoring: Determinants of the Location and Value of Services. Sloan Workshop Series in Industry Studies. (Aug.).

In this paper by two of the more thoughtful writers on offshoring, a number of issues related to the offshore relocation of work are raised. These include issues about the impact of labor pools and trade rules on offshoring; the use of offshoring to achieve economics of scale, scope, and specialization; secondary effects of offshoring such as innovation and risk-taking; and how various factors play out in the decision to do work in-house or outsource, and whether to outsource inshore or offshore. These issues are examined in three studies: a Silicon Valley start-up, Cradle Technologies, that offshores chip fabrication to Taiwan, does design work internally in India, and sells and markets in Japan through a Japanese firm; Agilent Technologies that does R&D, finance, and accounting for its worldwide operations in its own firm in India; and TCS, an Indian firm that conducts outsourcing work in the IT and software industries.

DREZNER, D. W. 2004. The Outsourcing Bogeyman. Foreign Affairs 83, 3, (May/June) 22-34.

Drezner teaches political science at the University of Chicago. This article, which has been widely read and discussed, gives a very upbeat analysis for America of the outsourcing challenge. It does an excellent job of describing the economic factors at play in outsourcing. Topics include putting US job losses to offshoring in perspective, the relation between offshoring and job loss, political backlash to offshoring, the economic harm of protectionism, geographic proximity in jobs, problems with job loss projections, the role of technology in job loss, historical perspective on jobless recovery, the principle of comparative advantage, and non-economic benefits of offshoring. Drezner recommends that politicians try to do no harm and that they change rules under which displaced workers can receive federal assistance. He also suggests that industry consider outsourced job unemployment insurance. Since the perception of the problem is actually much higher than the actual risk, the cost of premiums on policies would be low for the psychological benefit to workers.

DRUCKER, P. F. 2005. Trading Places. The National Interest (March) (Available at http://www.nationalinterest.org).

This article is not about offshoring but provides relevant context for understanding it. The article examines four trends in the world economy. The world of information is changing how and what we buy and what consumers expect. The world of money is being changed as the US dollar is undermined by the US budget deficit, thus placing in peril the US role as the central bank for the world. The world is increasingly being run by multinationals who represent 80% of the world's industrial production. These companies are headquartered in many different countries, of varying size, and in many industries, increasingly through partners rather than subsidiaries. Finally, there is a new world of mercantilism, dominated not by nation-states but instead by trading blocs of several countries that have free trade within the bloc and protectionism outside the bloc. Increasingly the role of the United States is being challenged by this system. All of these changes are challenging the Bush approach to world affairs.

ECONOMIC POLICY INSTITUTE 2003. EPI Issue Guide: Outsourcing (Available at http://www.epi.org/content.cfm/issueguide_offshoring).

This is intended as an introduction to the subject. It contains a section on the following frequently asked questions.

• Why are people worried about white-collar offshoring?
• How does offshoring fit in with larger trends in white-collar work?
• Won't offshoring fade as an issue once the economy recovers?
• What is driving white-collar offshoring?
• How much will the US economy gain from white-collar offshoring?
• Who benefits from offshoring?
• Isn't offshoring compensated for by 'inshoring'?

Using data from the Bureau of Labor Analysis, the Bureau of Economic Analysis, and NASSCOM, the paper presents 14 tables related to unemployment and employment rates in the United States for various age groups and occupations, salary by occupation and industry, demand for software investment, trade surplus for the United States as a whole and for the service sector, change in software-related jobs, labor compensation and corporate profit sharing of income growth during economic recoveries, and jobs related to foreign ownership of companies in the United States.

FALLON, A.J. 1993. Foreign Outsourcing of the U.S. Electronics Industry. The Industrial College of the Armed Forces National Defense University, Fort McNair, Washington, DC. Executive Research Project S21.

From the report's introduction. This paper examines the microeconomic dynamics facing the manufacturing industry, how they contributed to the off-shore migration of US manufacturing, and to assesses how new management strategies and techniques can support the continuing global competitiveness of American industry.

FRAUENHEIM, E. 2005. Tech Skills Pulling in More Pay, Report Says. CNET, news.com (July 19).

The article reports on a study that provides information about wages for IT workers in the United States and Europe based on a survey by Foote Associates. Overall pay increased 4.9% for non-certified technical skills and 3% for certified technical skills in the year ended July 1, 2005.

FRIEDMAN, T. L. 2005. The World Is Flat: A Brief History of the Twenty-First Century. Farrar, Strauss and Giroux, New York, NY.

Description from the author's Web site. Thomas Friedman demystifies the brave new world for readers, allowing them to make sense of the often bewildering global scene unfolding before their eyes. With his inimitable ability to translate complex foreign policy and economic issues, Friedman explains how the flattening of the world happened at the dawn of the twenty-first century; what it means to countries, companies, communities, and individuals, and how governments and societies can, and must, adapt.

FRIEDMAN, T. L. 2005. It's a Flat World, After All. The New York Times (April 3).

This article on the implications of globalization for the United States and, in particular, the threats in technologically driven products and services from China and India, has received a great deal of attention. It serves better to explain the issues and threats of globalization than many of the more academic publications. The article is an adaptation from Friedman's recently published book, The World is Flat: A Brief History of the Twenty-First Century.

GOMOLSKI, B. 2004. What to Tell the Kids. Computerworld (Oct.).

The article reports on parental fears that IT will not be a good career choice for their children. Job growth areas in IT are identified: business processing design and management, information management, and relationship and vendor management. The author is a vice president at Gartner.

HAGEL, J. III. 2004. Offshoring Goes on the Offensive. The McKinsey Quarterly 2.

Hagel worked in McKinsey's Silicon Valley office for many years before becoming an independent business consultant. The article focuses on some of the reasons beyond low-cost labor that would cause companies to want to offshore work. The focus is on distinctive skills and high performance levels offered by some of the offshoring vendors. One company that is profiled in the article is the Philippine firm eTelecare, which operates a state-of-the-art call center. Other examples include Taiwanese firms doing wireless chip design. One of the most interesting points of the article is about these companies taking advantage of the low cost of middle management salaries so as to increase the middle management ranks to a point where they can not only handle routine administration and management tasks but also spend time improving lower-level employee skills. Given that the applicant pools available to the offshoring companies tend to be larger and stronger, many of the best vendors spend more money on the hiring process - going through a lengthier and more rigorous screening process to get higher quality employees. Another feature of many of the better offshoring companies is to devote set-aside time of middle-level managers to identify and implement process improvements that enhance operational performance. The article also talks about ways that offshore vendors have helped companies move into new product markets such as Gateway into plasma televisions, Hewlett-Packard into digital cameras, and Dell into smart phones through the help of Asian original-design manufacturers.

HAGEL, J. III. 2004. Capturing the Real Value of Offshoring in Asia. Working paper. (Available at http://www.johnhagel.com/paper_offshoring.pdf).

Hagel argues that most companies do not get the full value from offshoring because they focus on labor arbitrage rather than using offshoring to accelerate and expand capability initiatives. Many of the examples given are from a call center (eTelecare) in the Philippines and from hardware manufacturing firms in China. Some of the topics that receive coverage are wage rate differentials at different skill levels and how to make that work for your company; distinctive skills held by the offshore vendor such as large pools of engineering talent and deep experience with designing for manufacturability; taking advantage of cultural attributes such as using social networks and personal relationships to enhance formal and organizational relationships; advantages of being able to hire more people, especially at the managerial level, because of the lower cost, in order to improve skill building, enact process improvements, and impact performance; compressing work cycles through larger teams and working round the clock; creating more flexible supplier relationships; and expanding the scope of capacity building by moving up the value chain, expanding into adjacent activities and markets, and expanding backward into the supply chain.

HATCH, P. J. 2005. Offshore 2005 Research: Preliminary Findings and Conclusions. Ventoro (Available at http://www.ventoro.com).

This 115-page report, by a consulting firm that serves US and European companies wanting to outsource work, is based on interviews with more than 5,000 executives and 300 outsourcing vendors around the world. Topics include statistics about offshoring, making the offshoring decision and whether to buy or build capacity, selecting and managing vendors, appropriate roles for vendors, statistics and analyses on culture and politics of countries where a company might send work, people and teams and leadership issues both on the vendor and client premises, performance and process and audit issues, managing projects, and managing risks.

HAYWARD, D. 1997. How Offshore Programmers Save IBM Millions. TechWire (Feb. 18). (Available at http://www.offsiteteam.com/outsourcing1.html Accessed Aug.).

From the article. IBM expects to save millions of dollars a year and cut some of its software product development cycles by more than a third thanks to what it claims is a radical new application development method. Big Blue said Tuesday it has split the development of eight VisualAge PartPak products between Seattle and four low-cost programming centers in Asia and Europe. The PartPak products are Java-based components for the Internet and corporate intranets and are due to ship by the end of September this year. Programmers and analysts working for IBM in Seattle will supervise and review work their colleagues in Asia and Europe have carried out a few hours earlier. They will then set new targets for their offshore colleagues to meet the next day. IBM officials said the two-shift system lets the company both increase its productivity and cut its costs dramatically.

HIRA, R. 2004. Offshoring of High Skilled Jobs: Emerging Global IT Business Model. ACM Job Migration Task Force Meeting Washington, DC. (Dec.).

Topics in the presentation include a definition of offshoring, why companies offshore, amount of work offshored, variety of work offshored, positive and negative impacts of offshoring, IT job dislocation, emerging global services business model, US visa policies, insourcing, winners and losers in globalization, critique of existing studies, and possible policy responses.

HOUSE, C. H. 2001. Careers in a WWW World. Internal Intel document.

House is director of Societal Impact of Technology for the Intel Corporation. This is a thought piece addressed primarily at human resource directors on three forces that are changing the current workforce environment: (1) the establishment of the virtual corporation, through greater focus on core competencies and outsourcing of other functions; (2) skill shortages in the workforce, especially those that are science based; and (3) shortcomings in the mathematics and science competency of American students. One section of the paper discusses India, mainly the rapid growth in its ability to produce exportable technological products and services because of the rapidly growing pool of science-skilled workers.

IDC. 2004. Companies are Turning to Home-Shoring to Boost Productivity and Efficiency While Reducing Costs, IDC Says. Press Release (Dec. 21).

This press release discusses an IDC report entitled An Alternative to Offshore Outsourcing: The Emergence of the Home-Based Agent (IDC#32237). IDC reports that there are currently more than 100,000 home-based phone representatives in the United States, taking the place of workers in call centers. Home-sourcing addresses problems that call centers have had with agent quality, high turnover rates, and the seasonal nature of work.

JAMES, J., 2005. Losing the Competitive Advantage? The Challenge For Science and Technology in the United States. American Electronics Association. (Available at http://www.aeanet.org/publications/IDJJ_AeA_Competitiveness.asp).

From the report's summary. This report explores the challenges the United States currently faces and, in many ways, is ignoring at its peril. Our purpose is to alert audiences that America's edge, particularly in science and technology, is increasingly at risk. AeA began this discussion in March 2004 with our report on offshore outsourcing. Our view then, as it remains now, was that offshoring is merely a symptom of a dramatically shifting global economy and the U.S. role within it. This report serves as a natural sequel, in that it addresses this big picture. Many of the findings may sound vaguely familiar, even obvious; others may seem surprising. We analyze a number of competitiveness factors within these pages that, when taken in isolation as they so often are, would not necessarily constitute a crisis. But the inter-relationship - the cumulative effect of these trends - makes the more compelling argument that the status quo is unsustainable and that any reasonable person will see the need to act.

JENNEX, M. E. AND ADELAKUN, O. 2003. Success Factors for Offshore Information System Development. Journal of Information Technology Cases and Applications 5, 3, 12-31.

The paper reports on a survey of personnel from outsource and client companies concerning the factors that are critical for a small-to-medium-sized company in the outsourcing business. Usable responses were received from 201 individuals: 68 from US outsourcers, 59 from non-US outsourcers, and 74 from client organizations. 31 potentially critical success factors, drawn from a literature review, were considered. Six key critical factors were identified. Two of these factors, technical skills and general knowledge skills of the outsource workers, can be directly controlled by the startup outsourcer. Two others, a knowledgeable client contact and trust, are mutually controlled by the vendor and client. The last two critical factors, intellectual property right protection and telecommunications infrastructure, tend to be controlled by the governments of the vendor (and to a lesser degree the client). The article points out that "traditional offshore development is primarily application development. These applications tend to be highly structured requiring little or no changes to the requirements specifications. These projects require less interaction and project management from the client. They are ideal for outsourcing as deliverables and bids are understandable and predictable and risks are better understood. Current offshore development includes e-business and Web application development, and "follow-the-sun" or "round-the-clock" application development. These projects tend to be less structured in nature and need more client contact and project management than traditional offshore development projects. They are less ideal for outsourcing as deliverables, costs, and risks are less predictable." There is a useful literature review in this paper.

A.T. KEARNEY INC. 2005. What to Move Offshore? Selecting IT Activities for Offshore Locations. (Available at http://www.atkearney.com/main.taf?p=5,3,1,73).

The study argues that most large US companies are now devoted to offshoring and have determined the location(s) and the particular provider(s). The most pressing issue in terms of providing competitive advantage is to identify what tasks to offshore. This article describes a process by which a company can make that decision. It includes identifying core functions and other functions that should not be offshored, for example, for regulatory or political reasons. It also involves considering logistical issues that change over time such as the nature of the market and the company's place in it. Inasmuch as these change over time, offshoring decisions need to be reconsidered with recommended intervals for reconsideration spelled out in the report. The report also provides a process for a company to use in identifying ways in which IT functions can be bundled, helping them to determine which to offshore and which to keep in house. Tasks for offshoring are often those that are not time sensitive, require minimal client or customer interaction, have limited reliance on intellectual capital, feature routine or standardized processes, do not involve secure data, and are large enough to produce a substantial benefit.

KENNEDY J. F. 2002. The Influence of Outsourcing on Job Satisfaction and Turnover Intentions of Technical Managers. Human Resource Planning, 23-31.

A questionnaire was completed by 469 low- to mid-level US Air Force engineering managers who performed a support function that was to be outsourced. These were people who were not in jeopardy of losing their jobs but the outsourcing had the potential to cause other significant changes such as change of job title, duties, or responsibilities; transfer to other installations; relocation of their family; or curtailing certain future career options. The study found that the outsourcing negatively influenced their job satisfaction and caused them to seriously consider leaving their jobs for employment in the public sector.

KENNEY, M. 2003. The Growth and Development of the Internet in the United States. In B. Kogut Ed. The Global Internet Economy. Cambridge University Press, Cambridge, UK, 69-108.

This article examines the US policies and investments that enabled the growth of the Internet. The pervasive nature of the Internet as a communications media is discussed along a multitude of dimensions. An analysis of the various experiments that are aimed at exploiting the Internet is also presented.

KETLER, K. AND WILLEMS, J. R. 1999. A Study of the Outsourcing Decision: Preliminary Results. In Proceedings of the 1999 ACM SIGCPR Conference on Computer Personnel Research (SIGCPR'99) (April) New Orleans, LA. J. Prasad Ed. ACM Press, New York, NY, 182-189.

This paper provides preliminary reports from a study of corporate managers and IT managers in the United States about their firm's practices in outsourcing IT work (not specifically offshore outsourcing). The response rate was low - only 9% - so there is some question about the value of the results. Major conclusions are that 75% of the firms were outsourcing. Education and systems development were the tasks most often outsourced. Critical factors in deciding to outsource were cost savings, access to increased knowledge and expertise, and availability and quality of vendors. Loss of control, data security, and loss of in-house expertise were the major issues for companies choosing not to outsource, and some of these companies questioned the actual cost-savings compared to opportunities for cost-savings through downsizing, consolidation, or reorganization.

KRISHNA, S., SAHAY, S., AND WALSHAM, G. 2004. Managing Cross-Cultural Issues in Global Software Outsourcing. Communications of the ACM 47, 4 (April) 62-66.

The article describes five years of in-depth case studies on cross-cultural issues in outsourcing in North America, Western Europe, and Japan by an Indian, Norwegian, and British faculty member. The article points to problems with communication (how formal, how much written versus oral) between people from the vendor and client countries, and in the cultural adaptation of the bridgehead teams working in the client companies (social behavior, attitudes towards authority, language issues). Strategic approaches to offshoring projects are discussed. Best are those that can be specified in a culturally relatively neutral way such as software embedded in operating systems or middleware. Many of the outsourcing companies want to take on projects that enable them to gain new expertise such as a new area application (banking) or move up the value chain from simple maintenance to higher levels of project involvement. Offshoring applications software is tricky and requires effective in-depth relationships between the two sides. (Germans-Asians have had trouble generally in this regard.) One can try to replace strong cultural match with careful relationship management, but it is difficult to achieve. Active management is always a key to success. Use of common control and reporting mechanisms, systems development methodologies, and computer hardware and software all help. One cannot expect to manage away major differences in norms and values such as attitudes about hierarchy and power or different business practices. One can build cross-cultural teams to provide a negotiated cultural perspective. This might involve using bridgehead teams that spend long periods on the client premises and exchange staff on a long-term basis. Another strategy is to use managers who bridge the cultures. Systematic on-the-job cultural training is not all that common, and training generally is seen as a one-way process for the software supplier to learn about the cultural practices of the client. Two-way training is best.

MCCARTHY, J. 2004. Near-Term Growth of Offshoring Accelerating. Forrester (May).

Forrester has not revised its long-term projection on jobs lost to outsourcing (by 2015), but it has increased the short-term projection because of greater visibility about the advantages of offshoring, broader services offered by offshore vendors, the establishment of captive offshore centers by user companies, and onshore IT technology and service vendors setting up offshore operations. These trends are based on interviews with more than 100 user companies and a survey of 1800 business leaders. The article projects jobs that will be lost in each of the next five years and in 2015 in various job categories (management, business, computer, architecture, life sciences, legal, art and design, sales, and office). Forrester predicts that offshoring will remain a highly political topic.

MCGEE, M.K. 2004. Behind the Numbers IT Workers' Morale Mired in a Slump. Information Week (June 21) 86.

According to the Meta Group's 2004 IT Staffing and Compensation Guide, almost three-quarters of the 650 IT executives surveyed claimed that IT worker morale is now an issue. The most common response is employee recognition (45%) such as write-ups in the company magazine. Only 2% are lightening the load by hiring more staff and only 4% are giving bonuses to improve morale.

MCKINSEY GLOBAL INSTITUTE. 2005. The Emerging Global Labor Market (June).

From the Web site. The background for the report examines the current debate on offshoring and the context for MGI's latest research effort, defines terms used in the report, explains the report's scope, and introduces the questions covered by the research. The report finds that the number of service jobs offshored will remain modest compared to total employment in service activities in developed economies over the medium term. The gap between the current degree and the potential level is largely explained by internal barriers, most notably operational issues, management attitude to offshoring, and structural issues. External regulatory barriers play a small role overall. The potential for global resourcing varies depending on the industry. Part I covers demand, Part II supply, and Part III matches supply and demand and shows that supply of IT workers in low-wage countries outstrips demand but that engineering has a close match between supply and demand.

MEARS, J. 2004. The Promise of Outsourcing. Network World (July 5) 28.

This is the opening article in a special edition on offshoring. The article provides numerous interesting tidbits about the reasons for outsourcing and profiles several countries that are doing offshoring work. It cites data from the Gartner Outsourcing Summit 2004 and from Forrester Research and IDC as well as economic analysis by Catherine Mann of the Institute of International Economics. Topics include jobs lost to offshoring, importance of Y2K to the rise of offshoring, the benefits of offshoring, protectionist legislation, General Electric as an offshoring leader, and profiles of offshoring industries in China, Philippines, Africa, and Mexico.

MICROSOFT INC.2003. Microsoft Reports Fourth Quarter Earnings. (July 17). (Available at http://www.microsoft.com/msft/earnings/FY03/earn_rel_q4_03.mspx).

This gives Microsoft's public quarterly earning statement, including some information about global operations.

NATIONAL INTELLIGENCE COUNCIL 2004. Mapping the Global Future. Report of the National Intelligence Council's 2020 Project (NIC 2004-13, Dec.). (Available at http://www.odci.gov/nic/NIC_globaltrend2020.html).

This is the report from the National Intelligence Council's 2020 Project giving general predictions about the global situation in 2020 based on consultations with non-govern-mental experts around the world. These predictions set the background for understanding offshoring and global migration of software work and products. Topics include the emergence of China and India as new global players, the importance of globalization as a megatrend, world economic growth and uneven distribution of the benefits, the changing profile of multinational companies, the disruptive influence of information technology on the power of the nation-state, the reversal of democratization trends in the former Soviet Union and Southeast Asia, inability of the United Nations and the world financial institutions to be effective in the new global environment, reduced chance of world war but continued health of extremist groups, and increasing threats from biological agents.

NATIONAL RESEARCH COUNCIL, COMMITTEE ON WORKFORCE NEEDS IN INFORMATION TECHNOLOGY 2001. Building a Workforce for the Information Economy. Washington, DC.

This is a major publication on the IT workforce that resulted from the issues surrounding H1-B visas and age discrimination concerns in the IT workforce several years ago. The first section of the report defines and characterizes IT work, counts the size of the workforce and identifies the various issues concerned with determining whether there is a shortage of IT workers. The second section of the study takes up some special topics such as older IT workers, making more effective use of the existing IT workforce, and the role of education and training in creating more workers over the long term. There is a section of recommendations. The chapter on foreign workers considers the impact of foreign workers on the US economy, provides information about various visa programs (including a good summary of all the different visa types) and some of the problems with them, discusses the availability of foreign IT workers to US companies both within the United States and by locating IT work abroad, and looks briefly at the interaction between importing foreign workers and locating work offshore. There are only three or four pages directly relevant to offshoring.

NOBLE, S. 2005. Why Offshore Outsourcing Projects Fail. Global Sourcing Insights LLC (May 20).

The author is the Director of Global Sourcing Insights. The paper considers four reasons why work conducted offshore sometimes fails: (1) barriers to communication including inadequate equipment, communication at a distance, use of the appropriate communication technology, and appropriate mechanisms for communication such as status reports and Intranets; (2) complexity of infrastructure, including not only facilities and hardware, but also the legal and regulatory environments for dealing with issues such as privacy, security, and intellectual property; (3) division of labor, addressing who can do the work at the lowest cost as well as where and by whom a specific task should be done to ensure it is accomplished most efficiently and effectively; and (4) handling of cultural factors appropriately such as in Latin cultures where work may not be the defining factor in one's life, or in Asian cultures where people defer to authority.

PRESTOWITZ, C. 2005. Three Billion New Capitalists: The Great Shift of Wealth and Power to the East. Basic Books, New York NY.

From Publishers Weekly (as quoted on amazon.com). Ex-Reagan administration trade official Prestowitz follows up his critique of U.S. unilateralist foreign policy in Rogue Nation with this perceptive diagnosis of the nation's economic decline under globalization. While China and India focus on trade and industrial policies and turn out competent workers who put in long hours at a fraction of American wages, the U.S., Prestowitz argues, struggles with crushing trade and budget deficits, a zero savings rate, failing schools, dwindling investments in scientific training and research, a collapsing dollar and a debt-dependent economy that will face an "economic 9/11" once foreign creditors bail out. The argument echoes Thomas Friedman's book The World Is Flat, but Prestowitz's analysis is more thoughtful than Friedman's pro-globalization cheerleading. He criticizes from firsthand experience Washington's cavalier embrace of free trade and aversion to industrial policy ("they'll sell us semi-conductors and we'll sell them poetry," notes one Reagan administration economist) and argues cogently that the research and development apparatus and high-tech entrepreneurship that is supposed to save America's economy is likely instead to follow the manufacturing base offshore. It's a lucid and sobering forecast.

PRISM ECONOMICS AND ANALYSIS 2004. Trends in the Offshoring of IT Jobs. Software Human Resources Council, Ottawa, Canada.

Description from the Web site. This study reviews published literature on the subject and is one in a series of reports prepared for SHRC as part of its ongoing work to better understand the Canadian IT labor market. The release of the study marks the start of what SHRC plans to be a constructive dialogue on offshore outsourcing with key players in Canada's IT sector.

PRUITT, S. 2005. Employee Can Benefit From Outsourcing, Poll Shows. Computerworld (Jan. 12).

This brief article reports on a survey of 200 employees in large organizations in the United Kingdom, the Netherlands, France, and Germany before, during, and after their jobs were outsourced (not necessarily across national boundaries). While remuneration, benefits, and retraining were important, at the top of the list was good communication from the employer. Also important was a chance for the employee to voice concerns, typically through their labor representative.

REICH, R. 2003. Nice Work If You Can Get It. The American Prospect26 (Dec.). (Available at http://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.

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.

SARGENT, J.F. AND MEARES, C.A. 2004. Workforce Globalization in the U.S. IT Services and Software Sector. Office of Technology Policy, U.S. Department of Commerce. ACM Job Migration Task Force Meeting, Washington, DC (Dec.).

Topics included trends in the globalization in the IT workforce; factors driving offshoring; brief studies of India, Ireland, and Russia; advantages for the US IT workforce; offshoring R&D; multinationals; work likely to be and work not likely to be offshored; and wage and employment trends for US IT workers.

SCHAFER, M. 2004. Annual IT Staffing and Compensation Guide. Meta Group (March).

From the Meta Group Web site. The IT Staffing and Compensation Guide is a detailed compendium of the best practices necessary for managing the IT workforce effectively, trends currently impacting IT staff, and job descriptions and salary data for more than 170 positions. It includes case studies and practical information necessary for managing IT human capital, building IT leaders, developing skills and competencies, and managing the entire employee life cycle. For approved users, an online tool enables benchmarking of salary data and access to raw data.

SIEMENS BUSINESS SERVICES 2005. Corporate Web site. (Available at http://www.siemens.com/. Accessed March).

This is a public Siemens's Web site. It provides information about the company's global operations, an overview of products and services, and access to the company's annual report.

SIMPSON, L. 2004. Engineering Aspects of Offshore Outsourcing. Sponsored by the National Society of Professional Engineers, Washington Internships for Students of Engineering, and the National Science Foundation.

This 82-page study provides detailed information about the offshoring of engineering work. The main focus is on licensing, trade agreements, and issues of quality such as security and safety, the training of foreign engineers and the stability of the country in which they work, and insurance issues. The report does not consider offshoring of IT, nor does it cover visa programs.

STEINMUELLER, W. E. 1996.The U.S. Software Industry: An Analysis and Interpretive History. In D. C. Mowery Ed. The International Computer Software Industry. 25-52.

Description of book from Amazon.com: This is the first book to provide comparative research data on the software industry in three major parts of the world: the U.S., Japan, Western Europe, and the Russian Federation. It explores the reasons that some countries have had more success in software development than others. The research was conducted by a group of international experts in the software industry. [Steinmuller has written the principal article on the US software industry for this edited volume.]

STURGEON, T.J. 1999. Network-Led Development and the Rise of Turnkey Production Networks: Technological Change and the Outsourcing of Electronics Manufacturing. In G. Gereffi, F. Palpacuer, and A. Parisotto Eds. Global Production and Local Jobs. International Institute for Labor Studies, Geneva, Switzerland.

From the paper. The intent of the chapter is to explore some of the reasons behind the emergence of turnkey contract manufacturing, and discusses the implications of this new organizational model for places that seek to foster the development of the electronics industry. I argue that the rise of turnkey contracting has created new imperatives for developing places to connect to global-scale production networks or be left out of the mainstream of industrial development. The policy rubric that responds to this new reality I have dubbed Connectwork-led development.

TAUB, S. 2004. Outsourcing Boosts Jobs, Economy. CFO.com (March 31).

This article reports on an ITAA study that claims that outsourcing curbs inflation, increases productivity, and lowers interest rates. It contrasts the ITAA study with a study by DiamondCluster International that finds that companies now expect a cost saving of only 10 to 20% from outsourcing, compared to 50% two years ago.

TRAJTENBERG, M. 2005. Retaining the Competitive Edge in the Era of Globalization. The Eitan Berglas School of Economics, Tel Aviv University, (Feb.).

This general overview of offshoring is filled with data. The principal topics:

• what offshoring is all about,
• attributes of jobs offshored,
• the globalization of science and innovation,
• trends in the mobility of scientists and science students,
• larger teams, international cooperation, geographic dispersion of research,
• how a nation benefits from globalization of science and innovation.

TURKISHPRESS.COM 2004. World on Brink of Surge in Offshore Provision of Services: U.N. TurkishPress.com (Sept. 22).

This article summarizes a United Nations report that states that, "multinational companies are on the brink of shifting more services to cheaper locations abroad as the trend towards offshoring in the sector reaches a tipping point." The UN also warned high-wage countries that it would be "short-sighted" to resist the trend by forcing corporate service jobs to stay at home. "UNCTAD also estimated that investment in offshore business processing would expand from 1.3 billion dollars in 2002 to 24 billion dollars by 2007, although it would not necessarily all flow to developing countries."

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT 2004. The Offshoring of Corporate Service Functions: The Next Global Shift? World Investment Report 2004 (Chapter 4).The Shift Towards Services. The United Nations, New York, NY and Geneva, Switzerland.

The chapter covers the tradability revolution, future prospects for the offshoring of services, outsourcing versus captive business models, the search for competitiveness driving corporate offshoring, impact on host countries, and implications for home countries.

VARADARAJAN, S. 2005. But the World's Still Round. The Hundu (Aug. 2).

The author presents a negative review of Thomas Friedman's popular book, The World is Flat. The reviewer argues that Friedman's book is uninformed by international business history which provides many examples that run counter to Friedman's arguments and that Friedman in unable to separate quantitative changes from qualitative ones.