Offshoring Business Process Reengineering Pattern
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An Offshoring Business Process Reengineering Pattern is a Business Process Reengineering Pattern that relocates a business process from one country to another.
- Context:
- It can (typically) be an Operational Process (such as a manufacturing process) or a Supporting Processes (such as an accounting process).
- …
- Counter-Example(s):
- See: Business Process, Labor Arbitrage, Globalization, Free Trade Agreement.
References
2014
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Offshoring Retrieved:2014-6-5.
- Offshoring is the relocation by a company of a business process from one country to another — typically an operational process, such as manufacturing, or supporting processes, such as accounting. Even state governments employ offshoring. [1] More recently, offshoring has been associated primarily with the outsourcing of technical and administrative services supporting domestic and global operations from outside the home country, by means of internal (captive) or external (outsourcing) delivery models. The term is in use in several distinct but closely related ways. It is sometimes used broadly to include substitution of a service from any foreign source for a service formerly produced internally to the firm. In other cases, only imported services from subsidiaries or other closely related suppliers are included. A further complication is that intermediate goods, such as partially completed computers, are not consistently included in the scope of the term. [2] Offshoring can be seen in the context of either production offshoring or services offshoring. After its accession to the World Trade Organization (WTO) in 2001, the People's Republic of China emerged as a prominent destination for production offshoring. Another focus area has been the software industry as part of Global Software Development and developing Global Information Systems. After technical progress in telecommunications improved the possibilities of trade in services, India became a country leading in this domain though many parts of the world are now emerging as offshore destinations. The economic logic is to reduce costs, sometimes called labor arbitrage, to improve corporate profitability. Jobs are added in the destination country providing the goods or services (generally a lower-cost labor country), but are subtracted in the higher-cost labor country. The increased safety net costs of the unemployed may be absorbed by the government (taxpayers) in the high-cost country or by the company doing the offshoring. Europe experienced less off-shoring than the United States due to policies that applied more costs to corporations and cultural barriers.
- ↑ "The Offshoring of American Government", Cornell Law Review, Nov. 2008, available: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1143044
- ↑ See "Appendix II: Definitions of Offshoring" in General Accounting Office: "International Trade: Current Government Data Provide Limited Insight into Offshoring of Services", September 2004. Imported intermediate goods are included in offshoring in "Swenson, D: "International Outsourcing", in The New Palgrave Dictionary of Economics, 2008.
2008
- (Grossman & Rossi-Hansberg, 2008) ⇒ Gene M. Grossman, and Esteban Rossi-Hansberg. (2008). “Trading Tasks: A simple theory of offshoring.” In: American Economic Review, 98(5).
2007
- (Blinder, 2007) ⇒ Alan S. Blinder. (2007). “Free Trade's Great, but Offshoring Rattles Me.” In: The Washington Post, 2007-May-06.
- QUOTE: I'm a free trader down to my toes. … I have stuck my neck out and predicted that the offshoring of service jobs from rich countries such as the United States to poor countries such as India may pose major problems for tens of millions of American workers over the coming decades. In fact, I think offshoring may be the biggest political issue in economics for a generation.
When I say this, many of my fellow free-traders react with a mixture of disbelief, pity and hostility. Blinder, have you lost your mind? (Answer: I think not.) Have you forgotten about the basic economic gains from international trade? (Answer: No.) Are you advocating some form of protectionism? (Answer: No !) Aren't you giving aid and comfort to the enemies of free trade? (Answer: No, I'm trying to save free trade from itself.)
- QUOTE: I'm a free trader down to my toes. … I have stuck my neck out and predicted that the offshoring of service jobs from rich countries such as the United States to poor countries such as India may pose major problems for tens of millions of American workers over the coming decades. In fact, I think offshoring may be the biggest political issue in economics for a generation.
2006
- (Blinder, 2006) ⇒ Alan S. Blinder. (2006). “Offshoring: the next industrial revolution?." Foreign Affairs, 85(2). http://www.jstor.org/discover/10.2307/20031915
- ABSTRACT: For centuries, most international trade involved an exchange of complete goods. But, with recent improvements in transportation and communications technology, it increasingly entails different countries adding value to global supply chains, or what might be called “trade in tasks.” We propose a new conceptualization of the global production process that focuses on tradable tasks and use it to study how falling costs of offshoring affect factor prices in the source country. We identify a productivity effect of task trade that benefits the factor whose tasks are more easily moved offshore. In the light of this effect, reductions in the cost of trading tasks can generate shared gains for all domestic factors, in contrast to the distributional conflict that results from reductions in the cost of trading goods in other neoclassical frameworks.