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Feasting on the carcasses of off-shoring firms

Filed in archive Offshoring by Scott Wilson on January 02, 2009

In a downturn it's inevitable that those firms which are luckier or better prepared than their competitors will take advantage of their positioning to eat the lunch, or other savory delectables, of those less fortunate. India's various disadvantaged off-shore outsourcing firms may be on the menu after a particularly troubling 2008; Internet access problems, terrorist attacks, and the global economic crisis have all taken their toll, and the Financial Times is now reporting that India's Satyam Computer Services may be the first target for a deal in the wake of increasing financial difficulties.

Stability is the watchword of the CIO, and the possibility of ones outsourcing firm being taken over or otherwise disrupted is unsettling, to say the least. While it's most likely that any purchaser would seek to continue operations and profit from the acquisition's existing business, takeovers are bad for morale and often result in operational difficulties... not the sort of thing you want to inherit as a client.

Those CIOs who are able to control their panicky initial reactions to the deepening recession might exercise their initiative to move their outsourcing to more stable ground, or reduce their reliance on it considerably, but the generic cost-cutting or frozen deer-in-the-headlights responses we have seen so far in the enterprise doesn't argue for a more well-reasoned response to this new threat. I have high hopes that people will start to get realistic about their IT operations with the new year, however... next week we'll take a look at some steps to consider as it begins to dawn that this economic landscape isn't just a bad dream, but a fact of life for the foreseeable future.

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Tags: economy  India  outsourcing  have  firms  carcasses+shoring  shoring+firms  feasting+carcasses 




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