This post originated from an RSS feed registered with Agile Buzz by James Robertson. Original Post: Outsourcing - canary in the mine? Feed Title: Cincom Smalltalk Blog - Smalltalk with Rants Feed URL: http://www.cincomsmalltalk.com/rssBlog/rssBlogView.xml Feed Description: James Robertson comments on Cincom Smalltalk, the Smalltalk development community, and IT trends and issues in general. Latest Agile Buzz Posts Latest Agile Buzz Posts by James Robertson Latest Posts From Cincom Smalltalk Blog - Smalltalk with Rants

Paul Strassman has some interesting conclusions about outsourcing:

• My 1995 assertion that "outsourcing is a game for losers" still stood up in 2002, even though in this case I don't propose to connect the outsourcing of IT with negative profitability. The current findings offer a managerial perspective on the economics of outsourcing.
• My calculations indicate that only 26% of the low profitability results are attributable to outsourcing. Companies already failing for other reasons will tend to outsource increasing amounts of work, thus diminishing their value-added.
• My findings don't support the frequent predictions that U.S. firms will tend to outsource in order to increase profits and thus eventually leave us with a "hollow" economy

It's not that outsourcing causes problems - it's that companies in trouble run to outsource - and such companies, already having process issues, manage the outsourcing as well as they manage everything else (which is to say, not well). Interesting article