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Jamaican OverDrive - Outsourcing and Offshoring Case Study
Jamaican OverDrive - Outsourcing and Offshoring Case Study
By Sam Vaknin
Author of "Malignant Self Love - Narcissism Revisited"
The Organisation for Economic Cooperation and Development (OECD)
tried and failed to find proof or traces of widespread outsourcing
and offshoring. "There is little hard evidence of the extent of
international outsourcing and offshoring, despite widespread media
attention." - its baffled analysts conclude in a June 2005 report.
Outsourcing is the performance of the business functions and
competencies of the firm (call or data processing, software
engineering, manufacturing, research and development, customer
services, payroll management) by an outside contractor. Offshoring
is outsourcing beyond the borders of the firm's domicile, to a
foreign supplier abroad or to the firm's overseas or cross-border
subsidiaries.
Outsourcing and, even more so, offshoring are perceived as a threat
to job security in the West, where wages are much higher and job
perks more numerous and expensive to provide. Foreign data
processing firms gain access to sensitive data. Facilities in
hostile countries or potential geopolitical rivals, such as China
and India, may compromise national security.
Even the OECD admits that, in the words of The Economist, "close to
20% of total employment in the 15 pre-expansion EU countries,
America, Canada and Australia could 'potentially be affected' by the
international sourcing of services activities."
In a May 2005 report, titled "The Emerging Global Labor Market",
McKinsey Global Institute estimated that in 2003 there were a mere
1.5 million outsourced service jobs. The number is projected to soar
to 4.1 million in 2008. But even this is a tiny drop in a massive
ocean. In the USA, note the authors, in the year to March 2005, more
than 4.6 million people start in new jobs - monthly!
Offshoring is a growth industry not only in India. Export of
business services has recently mushroomed in Ireland, Estonia, and
Sweden - all European Union members.
Even places such a Jamaica, not exactly a hotbed of innovation and
technology, benefit.
OverDrive - an e-commerce, software conversion and e-publishing
applications leader - has expanded an e-book technology centre by
adding 200 e-book editors. This happened in Montego Bay, Jamaica -
one of the less privileged spots on earth. The centre now provides a
vertical e-publishing service - from manuscript editing to
conversion to Quark (for POD), Adobe, and MS Reader ebook formats.
Thus, it is not confined to the classic sweatshop cum production
centre so common in Less Developed Countries (LDC's). It is a full
fledged operation with access to cutting edge technology.
The Jamaican OverDrive is the harbinger of things to come and the
outcome of a confluence of a few trends.
First, there is the insatiable appetite big publishers (such as
McGraw-Hill, Random House, and Harper Collins) have developed to
converting their hitherto inertial backlists into e-books. Gone are
the days when e-books were perceived as merely a novel form of
packaging. Publishers understood the cash potential this new
distribution channel offers and the value added to stale print tomes
in the conversion process. This epiphany is especially manifest in
education and textbook publishing.
Then there is the maturation of industry standards, readers and
audiences. Both the supply side (title lists) and the demand side
(readership) have increased. Giants like Microsoft have successfully
entered the fray with new e-book reader applications, clearer fonts,
and massive marketing. Retailers - such as Amazon - opened their
gates to e-books. A host of independent publishers make good use of
the negligible-cost distribution channel that the Internet is.
Competition and positioning are already fierce - a good sign.
The Internet used to be an English, affluent middle-class, white
collar, male phenomenon. It has long lost these attributes. The
digital divides that opened up with the early adoption of the Net by
academe and business - are narrowing. Already there are more women
than men users and English is the language of less than half of all
web sites. The wireless Net grants developing countries the chance
to catch up.
Astute entrepreneurs are bound to take advantage of the business- friendly profile of the manpower and investment-hungry governments
of some developing countries. It is not uncommon to find a mastery
of English, a college degree in the sciences, readiness to work
outlandish hours at a fraction of wages in Germany or the USA - all
combined in one employee in these deprived countries. India has
sprouted a whole industry based on these competitive endowments.
Here is how Steve Potash, OverDrive's CEO, explained his daring move
in OverDrive's press release dated May 22, 2001:
"Everyone we are partnering with in the US and worldwide has been
very excited and delighted by the tremendous success and quality of
eBook production from OverDrive Jamaica. Jamaica has tremendous
untapped talent in its young people. Jamaica is the largest English- speaking nation in the Caribbean and their educational and technical
programs provide us with a wealth of quality candidates for careers
in electronic publishing. We could not have had this success without
the support and responsiveness of the Jamaican government and its
agencies. At every stage the agencies assisted us in opening our
technology centre and staffing it with trained and competent eBook
professionals. OverDrive Jamaica will be pioneering many of the
advances for extending books, reference materials, textbooks,
literature and journals into new digital channels - and will shortly
become the foremost centre for eBook automation serving both US and
international markets."
Druanne Martin, OverDrive's Director of publishing services
elaborated:
"With Jamaica and Cleveland, Ohio sharing the same time zone (EST),
we have our US and Jamaican production teams in sync. Jamaica
provides a beautiful and warm climate, literally, for us to build
long-term partnerships and to invite our publishing and content
clients to come and visit their books in production."
Then Jamaican Minister of Industry, Commerce and Technology, the
Hon. Phillip Paulwell reciprocated:
"We are proud that OverDrive has selected Jamaica to extend its
leadership in eBook technology. OverDrive is benefiting from the
investments Jamaica has made in developing the needed infrastructure
for IT companies to locate and build skilled workforces here."
There is nothing new in outsourcing back office work (insurance
claims processing, air ticket reservations, medical records
maintenance) to third world countries, such as (the notable example)
India. Research and Development is routinely farmed out to aspiring
first world countries such as Israel and Ireland.
But OverDrive's Jamaican facility is an example of something more
sophisticated and more durable. Western firms are discovering the
immense pools of skills, talent, innovation, and top notch
scientific and other education often offered even by the poorest of
nations. These multinationals entrust the locals now with more than
keyboarding and responding to customer queries using fake names.
The Jamaican venture is a business partnership. In a way, it is a
topsy-turvy world. Digital animation is produced in India and
consumed in the States. The low compensation of scientists attracts
the technology and R&D arms of the likes of General Electric to Asia
and Intel to Israel. In other words, there are budding signs of a
reversing brain drain - from West to East.
E-publishing is at the forefront of software engineering, e- consumerism, intellectual property technologies, payment systems,
conversion applications, the mobile Internet, and, basically, every
important trend in network and computing and digital content. Its
migration to warmer and cheaper climates may be inevitable.
OverDrive sounds happy enough.
==============================================================
AUTHOR BIO (must be included with the article)
Sam Vaknin ( http://samvak.tripod.com ) is the author of Malignant
Self Love - Narcissism Revisited and After the Rain - How the West
Lost the East. He served as a columnist for Central Europe Review,
PopMatters, Bellaonline, and eBookWeb, a United Press International
(UPI) Senior Business Correspondent, and the editor of mental health
and Central East Europe categories in The Open Directory and
Suite101.
Until recently, he served as the Economic Advisor to the Government
of Macedonia.
Visit Sam's Web site at http://samvak.tripod.com
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