India, China, South Africa, Philippines, and Vietnam—what do these countries have in common? They are home to thousands of companies that perform CAD, structural detailing, structural design and analysis, 3-D visualization, GIS, and other services for U.S. based engineering firms. Regardless of the moral issues so many U.S. workers and business owners have with the practice, studies show that the trend to procure services from firms whose principal base of operation is outside the United States is growing.
Susan Dell Orto, a consultant with ZweigWhite, reports in "Offshore outsourcing: A problem or a solution?" that about 19 percent of firms involved in a recent study by ZweigWhite and Satellier, LLC have offshore outsourced engineering service. While firms that have offshore outsourced already are about three times more likely to do it again during the next year than firms with no prior experience, more and more work is expected to go overseas.
According to a study by Booz Alen Hamilton and India’s National Association of Software Services Companies, the current global spending on offshored engineering is $15 billion. By 2020, the study projects this will grow to between $15 and $225 billion.
Of course, many firm owners are adamantly opposed to the practice of offshore outsourcing, citing that it will worsen the opportunities for U.S. workers, drive more young engineers away from engineering, and commoditize services even more than some believe they already are. Others aren’t concerned with the moral dilemma of offshore outsourcing work, but rather don’t believe that firms who use this model can maintain high-quality service for clients, or overcome communication barriers and still be efficient.
Proponents say they enjoy reduced costs, the ability to take on more work, and the opportunity to allow staff to focus on more strategic functions.
Whichever side of the fence you are on, it seems to be happening around us and happening more and more each year. Given it is such a heated issue, I invite you to share your thoughts with me about your experiences or your decision not to offshore outsource. Write to me at email@example.com, and your comments may be published in a future issue of CE News.
Additionally, you may be interested in attending a 90-minute live webinar on the topic when Dell Orto will explore the issue of offshore outsourcing and its potential role in the industry. Click here to learn more.