A thought, inspired by Joel:

One thing that it makes sense not to outsource is your core competency.

In order to be successful, you need strong and direct control over your core competency. A company that invests money, that outsources the investment decisions, isn't left with much else. Because they aren't investing their own resources in making the best investment decisions themselves, they are likely to be worse off.

Outsourcing, by definition, gives you less direct control over what is happening than insourcing. Since you know what you want, this results in extra time needing to be spent on the project. And that's fine--but, if it's your core competency that is being delayed, then that's a problem for the company.

Maybe, then a general rule of thumb is that, the further anything is from the heart of what you're doing, the more sense it makes to outsource it to the specialists whose core competency it is to do that thing.

So a friend was recently at a party where someone inquired if she knew me and if I was the guy who "outsources to Puerto Rico." My friend responded, "Yes, but it's Argentina" to which this guy went on a tirade, yelling on the top of his lungs to everyone there about what I do. A paraphrase of what he said, as related to me, is something like this:

I can't believe you talk to someone like that. What he's doing to the country is so horrible. He's destroying our jobs and our country. He's such an asshole, you shouldn't associate with him. He has to have severe mental issues to be doing this, he is really fucked up and a horrible, heartless person.

Whoa. Me?!?! (I will point out that this man is a canonical upper-class leftist--but that analysis is more for a political blog, not for here.) This is among the strongest, most direct verbal attacks on what I do that I've heard about.

We need to get the message out: the moral imperative is on our side, not their's. I've said it before on this blog and I will continue arguing it until I am disproved: it is immoral to force a business to give consumers higher prices (because of higher wages), and it is unfair towards consumers. And it is fundamentally moral to hire 3 talented people in a country with zero opportunity than--with the same money--to hire 1 talented person in a country with lots of opportunity. Period.

The irony is that outsoucing might not be efficient for other reasons and thus we might lose the outsourcing war in the end (such as: what if it is just deeply inefficient to do so?)--but I have not yet found evidence against the moral argument.

Outsourcing requires strength. I already knew that from dealing with the Argentines. But I am always reminded that I need to deal with the non-businessmen Americans, too.

Every project, they say, necessariy involves a trade-off between time, money, and quality. And if we accept that fact that we won't accept any reduction in quality, then every project will inevitably involve a we have a time/money trade-off. One of the lessons that I've been learning, running my outsourcing company--for better, or for worse--is that this time/money trade-off is very real and has been hard finding ways to compensate for it: a good outsourcing company can give you high-quality work at an amazing cost--but it will take more time to do it. Period.

I'm devising my own methods to solve this problem. Stay tuned to hear them as I figure them out...

While discussing outsourcing, one of my programmers in Argentina recently told me:

"Since everyone knows how much you love the USA & George Bush, no one can accuse you of hating America when you promote outsourcing!"

Whoa. What a great point is implicit in this sentence: From the point of view of the poorer, third world country, of course free trade & creating jobs is a good thing! How can creating jobs for talented people with little money & opportunity, while creating cheaper products for everyone locally, be a bad thing? And those Americans who fight against it: they're the reactionary, I-love-America-and-don't-want-to-help-the-rest-of-the-world types!

This attitude I've found to be more or less common throughout Argentina and Chile, at the very least. Seen from the other side, the benefits are obvious and the people that don't support it are stereotypical ones that don't care about destroying anything in their way.

Funny how different the image is in the US. In the US, by and large (in general), the Republicans are the ones supporting outsourcing strongly and the Democrats (sans B. Clinton) fighting it and, simultaneously, the picture is commonly painted that the Republicans want to oppress the poor third-worlders and the Democrats actually care about them. Looks a bit different from the outside, eh?

So there is an added advantage to outsourcing: it promotes world peace.

The proof is simple. Which two countries are more likely to fight each other: the one in which has a large amount of trade & jobs moving between the countries? Or the one with little? Is the US more likely to fight with Saudi Arabia, or with China?

Of course there are certain circumstances under which such countries still do fight. In the era of colonization, the wealthier country might invade the poorer one so that it could own it. But in our post-colonial world, we just give them jobs--that the locals then have the choice of voluntarily accepting or not.

More generally, outsourcing promotes cultural understanding. It is obvious to state that cultures that deeply understand each other are less likely to disagree as well, just like a healthy couple. And what better way to promote cultural understanding than to have each culture interact with the other on the level of serious investment?

Well, a better way would be insourcing, but that's another story for another day. And outsourcing still achieves similar ends, too.