Summary and analysis (The seven deadly sins of outsourcing) article Essay

Summary and analysis (The seven deadly sins of outsourcing) article - Essay Example Therefore, in order that the mainline industries too gets benefitted to the fullest extent 1. Outsourcing activities that should not be outsourced: It has been suggested that the company must have a clear idea of what to outsource and what to keep with itself. Example has been cited of a car rental company which ended up with more IT costs after outsourcing. The increasing levels of competition in the globalization regime have made companies all the more conscious about the cost benefit ratios. As the profit margins are heading southwards, multinational corporations around the globe have started looking for locations where they could shift some of their non-strategic jobs in order to cut costs. China, India, Philippines, South Africa, Thailand, Russia, Poland, Mexico, Indonesia, Vietnam etc. are some of the countries where MNCs from USA, UK, Germany and other developed nations have started outsourcing the jobs. Therefore, the recommendations of the article are very much relevant in this scenario. For example, in case of any dispute arising out at the outsourcing destination, the company may not be in a position to take back up measures, which in turn would result in losses on many fronts. Outsourcing certainly touches upon the human capital management issues. The moment company employees come to know about any such move from the management, they start becoming apprehensive about their future with the company. Recognition of ‘conflict’ on issues in the management process is central to the difference between HRM and Industrial Relations policies. There was a time, when western nations used to be big attractions for skilled workforce, but today the eastern nations have become the destination of IT professionals. Outsourcing to such destinations leads to huge cost savings, but there are some risks as well. For example, in recent days media has reported instances when