PRINT
EMAIL
COMMENT
BUZZ UP
DIGG
OUR PREMIUM CONTENT
The Kiplinger Agriculture Letter
The Kiplinger California Letter
Kiplinger's Biofuels Market Alert
Kiplinger's Retirement Report
SUBSCRIBER HELP
CURRENT LETTER
2009: A Rough Start
But a Better Finish
PREVIOUS ISSUES
Vivian L. Hanson is a partner in the Technology Transactions Group in the New York office of Morrison & Foerster LLP. Ms. Hanson has extensive experience in outsourcing, technology transfers, licensing and other intellectual property transactions, as well as in joint ventures, strategic alliances, mergers, acquisitions and general corporate matters.
Gordon Milner is a partner in the firm's China practice. He specializes in providing advice on intellectual property, information technology law and outsourcing. He has advised clients in the technology, financial services, telecommunications and life sciences industries in Asia, Europe and the U.S. on a wide spectrum of technology-related matters.In less tumultuous times, companies have looked at outsourcing as a way to improve a business: Let an experienced vendor handle and improve particular business tasks so the firm can focus on its core functions. But in a recession, when companies are frantically trying to reduce costs, they turn to outside contractors to save money, pure and simple.
"Today’s outsourcing deals are intensely, singularly concerned with reducing head count and saving money -- the sooner, the better," write Morrison & Foerster attorneys Vivian Hanson and Gordon Milner. "In an environment where Fortune 500 companies have disappeared overnight, a successfully executed outsourcing deal could make a difference in a company’s ability to ride out these challenging times."
The authors point out that the cost cutting allure of outsourcing goes beyond the likely lower wages to be found overseas. Instead of carrying their own fixed costs, companies can rely on a contractor to produce what they need on a far more flexible and efficient basis. "Variable pricing based upon usage enables companies to reduce expenditures when ... demand for their own goods and services decreases," they write. "Conversely, as demand increases, external vendors are typically better equipped to increase provision of outsourced services, thereby enabling companies to meet fluctuations in the marketplace without consistently carrying bloated overhead costs."
Hanson and Milner explain how to ensure that the contracts worked out with vendors actually provide the flexibility a company is seeking. They also explain some of the ins and outs of hiring vendors in two of the most sought after countries for outsourcing -- India and China. For example, they suggest including arbitration clauses to resolve disputes. Judgments made in U.S. courts are not enforceable in either country, but India and China are both signatories to global agreements that do require honoring decisions handed down by arbitrators.
POSTED BY: katie (November 19, 2008 10:53 AM)
Outsourcing may be great for companies for the short-term but in the long-term it will only hurt the U.S.A. and the companies, because without jobs our county will fall. Greed has caused all of our problems.
.companies' greed for more and more profits(Outsourcing at the expense of their workers)
.Unions making unreasonable demands
.Bankers' greed for large profits(making loans knowing that the payments could not be meet for long)
.People getting loans that would not be able to pay (greed)
Without jobs we will never get out of this problem. No job = no purchases.
Companies need to ask the question, will China and India be able to keep them in business. Therefore outsouring will only continue to create problems
We need to keep America working!!
POSTED BY: k.s. (November 19, 2008 02:28 PM)
Personally, I think that companies would fare better in this economy if consumers actually had money - companies are losing customers and potential customers by sending jobs, and, therefore, money, overseas. Are Indian and Chinese citizens going to spend their paychecks in the American market? No. That money could be going to a qualified worker in the US, where it would reenter our own market. By outsourcing, companies are actually removing billions of potential dollars from our economy, and it WILL end up hurting them.
POSTED BY: Philip (December 01, 2008 10:58 PM)
Outsourcing isn't about shipping jobs overseas, it is about sourcing the best available labor at the best rate -- exactly like how consumers comparison shop to get the best price on an item. Stopping outsourcing is basically removing US from the global competitive market. Higher valued jobs are created as a result of lower skilled jobs being outsourced. If you find your current job being offshored, then it's time to pick up another skill.
E-Mail Article
Print Article
