Off shoring -- who are the big winners?

We talk about off shoring and its impact on individual careers, organizations and national economies. A UC Irvine study analyzed the iPod, asking where the 451 parts that go into it are made and who makes them. IPods are assembled in Asia by companies you have probably never heard of, but Apple is the big winner. Most value is added by companies with brand names that conceive of products and do user-interface and engineering design, marketing, distribution and sales. Those involved in manufacturing and assembly add less value.

UC Berkeley professor Hal Varian discusses the report in this New York Times article. (This is a very good article, but I would not mention and link to it while the Times charged a subscription fee).

Do you think US firms will have the same advantage as Apple does today in the future? Why?

An excellent interview on outsourcing

Scott Lemon runs an outsourcing firm called HumanXtensions. He discussed his firm in a recent interview with Phil Windley. They talk about Scott's services, the differences between India and the Philippines, the management of oursource projects, the implications of globalization and outsourcing for today's students, etc. (18 minutes 32 seconds). This is an excerpt from a longer interview. This class note shows leading outsourcing nations.

Outsourcing applications -- a university example

The Economist published an article on corporate use of consumer and other services. One example they cite is Arizona State University, which is using Google Mail and plans to use other Google services.

I create list servers for the students in my classes. Last semester, 3 out of 60 students used their CSUDH email addresses. This suggests that we are spending a lot to offer a service that only a few students value.

But, should CSUDH outsource our email and other applications? We cannot run servers as efficiently as folks like Google or Amazon, but, even if a service provider is cheaper and more reliable, can we depend upon them? This is a business and contractual decision as much as a technical and cost decision. I listed a few pros and cons in this teaching note.