In defense of Outsourcing

Here's an email that is floating about that landed on my inbox today (I've copied an extract to retain the essence, but also suitably anonymize the suspect):

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So to help executives get a better understanding of the challenges, I am working on a whitepaper, entitled "10 Ways to Fail at Outsourcing" and need feedback from people like you to questions like:
• Why are you (not) outsourcing?
• What are you biggest development related frustrations?
• In what region(s) are you developing your software?
• Would you ever consider nearshore development?
• What lessons have you learned from your outsourcing experience?
• Are you leveraging Agile or Lean in your development toolbox?
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This led to to inevitable discussion on why local firms still continue to compete and spread FUD on the basis on location?

My perspective is that this is a tired position to take, one that clients can smell a mile away. Do not start to bash offshoring simply because you don’t have any, and do not glorify near-,on-,right- (or whatever else) shoring as cost advantages start to vanish.

The battle has moved on to innovation and niches – where you deliver services from is a spectrum that the client gets to pick based on cost and risk sensitivities. As it turned out, “low value” gets better value from offshore locations such as India, and high value better from onshore historically.

Now it is entirely possible to deliver high value from offshore/India but what rankles people is that the pricing is still a hangover from the low value days(think: cost plus pricing), making the pie smaller for everyone. This is why offshoring has been always been perceived as a race to the bottom.

Innovation in India is entirely possible (multitude of examples exist - you are all aware) however unless the price points are fixed - the perception status quo will remain.