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PBS Cringely on IT Outsourcing

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PBS Cringely on IT Outsourcing
Topic: Technology 8:47 pm EST, Jan 23, 2004

Shipping work overseas saves money that drops to the bottom line as profit.  Stock prices are today keyed to earnings-per-share as is, to a certain extent, executive compensation.  Now look at the average time that an institutional investor actually holds a given stock.  This can be measured in months, sometimes in weeks, but hardly ever in years.  So the investor timeline is short and the CEO timeline -- with average tenancies in those positions at less than five years -- is not much longer.  So offshoring works great for these two groups.  The stock goes up and along with it, the CEO's bonus and stock options.  By the time the long-term effects of this policy are felt, both the investors and the CEO are long gone.  And even if the CEO is still around, it is with a golden parachute negotiated long before that often pays him more to go away than he might have got to stay.

I have to admit that I have begun to plot my path out of tech and get my house paid off. The world economy has changed and the bottom line is the end of the line.

PBS Cringely on IT Outsourcing



 
 
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