From the “Well, DUH!” files

The Register notes that outsourcing to overseas is NOT all that and a bag of chips:

Although researchers from Gartner predict the market for outsourcing will grow from $8.4bn in 2004 to $12.2bn in 2007 they say 80 per cent of projects started to save money will fail to do so.

Despite the growth in outsourcing the overseas component of this will remain small. In 2005 less than two per cent of the call centre market is made up of offshore companies, rising to less than five per cent in 2007.

Up to 2008, 60 per cent of firms that outsource sections of customer-facing processes will suffer customer defections and other hidden costs which will outweigh any possible savings.

“Customer defections”. That means people voting with their feet.

Makes sense: If you cheap out on phone support, the customer can always tell…and decide that you’re not worth doing business with.

Now, when will someone twig to the fact that a lower profit margin is not a sign of failure but oh, maybe of caring enough to put more money back into the business, and by extension, the community–not the shareholders’ already overstuffed pocketbooks?

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