Outsourcing's Bad Rep

Outsourcing should join the list of taboo topics that shouldn’t be discussed on a first date, along with money and politics.   Just saying the word invokes snarls on the faces of anti-outsourcing business people and professionals across the nation, mostly due to the widespread negative perceptions associated with poorly paid, undereducated overseas support staff “stealing” jobs and potentially confidential information from Americans.   Some tax software vendors, including Intuit and ATX/Kleinrock, faced harsh criticism when they chose to send tech support to other countries and have since reversed their decisions.   But not everyone is against the idea.   The owner of a small CPA firm in Ft. Lauderdale, Fla., started outsourcing six years ago and currently utilizes people in India, Pakistan and China. Cost savings alone are incredible—he pays them $3 to $10 per hour compared to $35 to $75 that their U.S. counterparts receive. But that’s common knowledge and also part of the controversy.   What’s more amazing is the quality and speed of the work they do for him. In one occasion, he estimates that a chartered accountant (not an unskilled laborer) prepared one of his most complex tax returns overnight for one of his largest 1040 clients on April 8 with 80 percent fewer errors than anticipated. (For more on his story, see “Secrets of Outsourcing.”)   Can every firm have as positive an experience as he did? Probably not. Some businesses have attempted it and failed, but likely did not follow the same steps as he did in order to succeed.   He was smart about testing the waters—sending out the same tax return to three different firms to see which one would do the best job and checking on security measures the companies have in place such as using “dumb” terminals that don’t contain disk drives so information cannot be downloaded and saved locally. And firms that are considering outsourcing must first decide which tasks make sense to outsource and which jobs to keep close to home.   But if the possibility exists to utilize resources in other countries—where, by the way, they can complete tasks in the middle of the night because of the time difference—and if doing so ultimately can help time-strapped practitioners serve their clients faster, does it really hurt that much to try it with a few small projects?   It may be a worthwhile experiment. Just don’t discuss it over dinner.