From the other side, the cost of qualitative education is constantly rising. So people who invested huge money in their education can not afford receiving low salaries. Therefore it becomes impossible to find highly-educated professional human resources at low price. Those who sat that personnel from India or China is highly educated should ask themselves how many college graduates from India or China are working at top positions at U.S. companies. Often talented people from overseas should first work in the U.S. company for few years and overtake some corporate training (or post-graduate education) to become valuable employees.
I think that ACME Corporation should use experience of other IT companies which are successful in transferring their facilities to developing countries. For example, managers at U.S.-Dutch professional publishing giant Wolters Kluwer shifted software development and editorial work to India and the Philippines. Therefore they are able to pump out a greater variety of books, journals, and Web-based content more rapidly. Wachovia Corp., the Charlotte-based bank inked a $1.1 billion deal with India's Genpact to outsource finance and accounting jobs and handed over administration of its human-resources programs to Lincolnshire-based Hewitt Associates. It's "what we need to do to become a great customer-relationship company," says Director of Corporate Development Peter J. Sidebottom cited in Engardio (2006). Wachovia aims to reinvest up to 40% of the $600 million to $1 billion it hopes to take out in costs over three years into branches, ATMs, and personnel to boost its core business.
Here's what such transformations typically entail: Genpact, Accenture (ACN ), IBM Services, or another big outsourcing specialist dispatches teams to meticulously dissect the workflow of an entire human resources, finance, or info tech department. The team then helps build a new IT platform, redesigns all processes, and administers programs, acting as a virtual subsidiary. The contractor then disperses work among global networks of staff ranging from the U.S. to Asia to Eastern Europe.
In recent years, Procter & Gamble (PG ), DuPont (DD ), Cisco Systems (CSCO ), ABN Amro (ABN ), Unilever, Rockwell Collins (COL ), and Marriott (MAR ) were among those that signed such megadeals, worth billions.
As Engardio (2006) writes, many executives are discovering offshoring is really about corporate growth, making better use of skilled U.S. staff, and even job creation in the U.S., not just cheap wages abroad. True, the labor savings from global sourcing can still be substantial. But it is peanuts compared to the enormous gains in efficiency, productivity, quality, and revenues that can be achieved by fully leveraging offshore talent.
However what the company really has to help it survive in this environment is finance. So ACME Corporation can attract professional talents from India, China and Eastern Europe with the same methods as it attracts American specialists. Good strategy for ACME Corporation is to provide social insurance and credits for mortgage or other purposes to its college-educated English-speaking employees from India or China that will attract talented personnel to the company.
As Liu (2006) writes, the US economy emerged after World