Frank Byrt reports in a 12/1/05 WSJ article that Dallas-based EDS plans to double the number of its employees working in "cost-advantaged locations" outside the U.S. About 15,000 of EDS's 117,000 employees currently work in such locations. The move will mean job losses for some North American and European employees.

Here's an excerpt from Byrt's article:
"Chief Executive Michael Jordan said such countries have an increasing number of low-wage workers with the technical skills EDS needs, while the pool of people in the U.S. with those abilities is shrinking. 'Any commercial enterprise has to take advantage of it,' if the company is to remain competitive internationally, he said about outsourcing."

Should you be a reference account? Vendors and service providers use reference accounts as part of their marketing basket. The idea is that individuals from firms who have used their products and/or services agree to talk to potential customers. The idea is that satisfied customers will vouch for the product/service they received and answer questions from potential customers. Serving as a reference account has pros and cons, of course.

On the plus side, reference accounts typically can expect special deals, preferential treatment, and advance copies of the latest software. These can be appealing carrots.

So what's not to like? Well, it takes time to talk to potential customers. You might also worry about the liabilities associated with making candid comments. The vendor might impose certain restrictions on you. You might want to make restrictions, too, that you'll only talk to people in your industry, or at your decision-making level. Perhaps you don't want to have to talk about how much the services cost - or what you're getting in return.

Is it worth it? Could it be so appealing that you should actually suggest it yourself?

I'm curious about your experiences serving either as a reference account or as someone who's used one and hope you'll post your comments here. If you're interested in the topic, the January 2006 issue of Redmond Magazine (an independent monthly that covers Microsoft, http://www.redmondmag.com) promises to have an article on the topic. I, for one, am looking forward to reading it.

Last month, Dilbert creator Scott Adams ran two cartoons on outsourcing that you may enjoy. While "researching" this post, I ran across one of Adams' earlier ones (kinda blurry), along with one by Mike Luckovich and another from Pat Oliphant that some of you may enjoy.

http://www.dilbert.com/comics/dilbert/archive/dilbert-20051111.html
http://www.dilbert.com/comics/dilbert/archive/dilbert-20051112.html
http://java.blogeasy.com/article.view.run?articleID=6863

Mike Luckovich's editorial cartoon
http://209.157.64.200/focus/f-news/1066204/posts

Pat Oliphant's editorial cartoon
http://www.sepiamutiny.com/sepia/archives/000368.html

The November 21, 2005, issue of Time profiled John Warner as one of the five best governors in the US. Warner, a Democrat, managed both to cut Virginia's budget by $6 billion, but also to pass a $1.4 billion tax hike, the largest in Virginia's history. Thanks largely to Warner's efforts, Virginia and Utah shared first place in the Government Performance Project's ratings for best-managed state in the country.

http://www.time.com/time/archive/preview/0,10987,1129494,00.html

Virginia has also been in the news lately thanks to its unprecedented 10-year IT outsourcing deal (subject to approval by state legislators) with Northop Grumman. According to Paul McDougall's excellent November 21, 2005, Information Week article, Northrup Grumman will:

• receive more than $2 billion - along with partners HP and Gateway
• take over the state's mainframe, server, desktop, voice, and data networks
• spend more than $55 million building two data centers
• fund IT education at the University of Virginia
• provide state IT employees with 4% raises and signing bonuses upon transferring to the company
• and retain transferred employees for at least a year.

What's to like? The arrangement should save the state $200 million, upgrade its IT systems, spur economic development and IT education, and save state tech workers' jobs. McDougall's article says that EDS and IBM also competed for the contract and that, unlike the many failed government IT outsourcing efforts in other states and municipalities, Virginia's IT employees and union were consulted and kept in the loop.

http://www.informationweek.com/showArticle.jhtml?articleID=174400404

Coincidentally, a November 29, 2005, InfoWorld article by Nancy Weil describes "intensifying" legislative efforts aimed at curtailing offshoring. http://www.infoworld.com/article/05/11/29/HNantioffshoring_1.html?source=NLC-BUS2005-11-30

By purchasing the Chilean BPO firm Comicrom, Mumbai-based Tata Consulting Services increases its Latin America-based head count to about 2,000 staffers. Excerpt: "TCS's strategy in Latin America is to increase the scale of its operations so that it can offer BPO and IT services not only to markets in the region but also to other Spanish- and Portuguese-speaking markets, including in the U.S."

http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,106055,00.html?source=NLT_XSP&nid=106055

Related
http://www.comicrom.cl/english/internas/alianzas.aspx
http://www.tcs.com/0_media_room/releases/200511Nov/BPO_firm.htm