They should know nothing is as easy as it looks
Sending Jobs Overseas Isn't Always Worth It, U.S. Companies Find
Problems with logistics, language and red tape can make outsourcing jobs overseas a money-losing move.
By Alex Pham
Times Staff Writer
April 11, 2004
Christina Oliver and Kristen Kuhns scoured the globe for the same thing: cheap computer programmers.
They found them in different places — Oliver in Australia, Kuhns in India — but learned the same lesson about the global economy: For all the hype and hand-wringing about U.S. companies shipping jobs overseas, outsourcing to foreign countries can be a mind-boggling chore that doesn't always save much money in the end.
It took Kuhns four years to make the move pay off for TierSolution Inc. of Pleasant Hill, Calif. Oliver gave up after a few months and reeled the work back to the Hollywood headquarters of Legacy Interactive Inc.
"We ended up with a much better product, but it ended up taking too much work," said Oliver, a senior producer at Legacy. "Plus, when you add up the extra costs — the delays, the extra money we had to pay above the contract amount and such — it turned out to be less expensive to do in-house."
Big corporations have spread jobs around the world for decades. Only recently have advances in technology and telecommunications made it possible for small outfits like TierSolution and Legacy to do the same — or to try to. In a recent survey by technology research firm Gartner Inc. of 100 companies of all sizes that had outsourced overseas, 18 said they had saved nothing by sending jobs offshore and nine saw their costs rise.
