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Did somebody famous ever say “We won’t know where we are going until we know where we’ve been”? I did a quick Google search and could not come up with this quote being attributed to any person. If somebody did say this, then I’m borrowing the line for this posting. If not, then feel free to use it (but mention my name please). As my regular readers can imagine, I’ve been gone for about 3 weeks simply due to a very busy fourth quarter/year-end close. While scanning the internet recently for interesting and important information to bring to your attention, I stumbled upon a very interesting and thought provoking article in Internetnews.com by Kenneth Corbin entitled The 10 Most Important Social and Digital Media Developments of 2009. As I have stated in the past, I am a bit of a History Buff (What’s a Buff? See definition 2; enthusiastic, yes; knowledgeable, maybe). So I like to know the background of why things are as they are; and so I think it is nice to know what has happened in the past relating to technology in order to get a better understanding of where we may end up in the technological future. Corbin’s article is a gem. It informed me more fully of things I might have heard but should know more about. It reminded me of things that happened and how society dealt with it. It made me laugh (e.g. someone threatened to kill their cat if Miley Cyrus did not reinstate her Twitter account – really). And it made me wonder about the future. Here is a brief synopsis of Corbin’s Top Ten List peppered with my editorial comments. I hope I can do it justice:

#10.       Amazon.com’s Kindle will change the world: I read somewhere that the Invention that changed the world was the printing press. Well move over Gutenberg, the Kindle has arrived. In 2009 Amazon sold more digital books than printed editions. This e-reader will change the world. For an interesting take and a more in-depth analysis see Don Reisinger article entitled The Most Important Tech Product Is the Kindle, Not the iPhone.

#9.          Craigslist Killer: Some med student solicited an escort off of Craigslist and murdered her. The story was sensationalized due to the use of this new technology. As Corbin correctly points out, this story would have not garnered the attention that it did if the escort was solicited from the many personal ads or from the too numerous to mention yellow page advertisements.

#8.          Social Networking Sites Made Money: Facebook and Twitter, both a free service to their customer base of MILLIONS (yes I’m shouting MILLIONS) managed to figure out a way to make money. Facebook does it through advertising and the sale of virtual products; and Twitter did it by licensing the ability to add real-time content to Search Engines Google, Microsoft, and Yahoo.

#7.          Social Media in the Government: Is this a good thing? I don’t know. The Obama Administration seems to think so. They’ve done weekly addresses to the nation on YouTube and hosted online town hall meetings. There are numerous government websites and blogs.

#6.          The slow death of the Newspaper: Is this really happening? Are we really getting more (or most) of our news from the internet? What will the new business model turn out to be? Dare I say, do we need yet another industry bailed out?

#5.          Miley Cyrus deletes Twitter account: I honestly do not understand this phenomenon. Apparently there are millions of fans of all sorts of celebrities and Star Athletes that are interested in knowing and these Celebs/Sport Stars are interested in tweeting what they may be doing most hours of the day. Is this the downfall of our society? Well, it is at least another reason for it. Oh how I long for much calmer days and “Home Tweet Home”.

#4.          Social Web becomes target for hackers: Why do they do it? I don’t know. Some do it for the thrill of the “hack” and some are out to steal our identity. We put too much personal stuff on these social sites. Regulators and privacy advocates have fertile ground for their causes and activities.

#3.          The Twitter revolution in Iran: In June of the last year as Iranian authorities were cracking down on protestors, these same protestors began to twitter their cause, and when the foreign correspondents were thrown out, became the only source of hard data on what was really happening in the country. Corbin reports that the US State Department convinced the people at Twitter to postpone a planned power outage for scheduled maintenance just so they would keep the twitter lines of communication open.

#2.          The growing sense of urgency about information:  It seems that everything is about immediacy. We’ve got to have it real-time. 

And the #1 important issue that materialized last year relating to Social and Digital Media was VIDEO: The web is free and on-demand. How does one derive a business model out of that? TV Everywhere offers paying subscribers the option to watch content on the web. Hulu pulls content from sites, and its owner News Corp is thinking about making it a paid site. So is free TV over the air waves supported by its advertising (i.e. commercials) a thing of the past?

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• There has been a plethora of news stories regarding the future of outsourcing and IT jobs. In my research I came across a Blog that is maintained by the Staff at the Ubikwiti website. The Blog entitled Stemming the Outsourcing of IT Jobs cites freelance writer Rachael King for BusinessWeek.com. King reports that speaking to Ohio workers President Barak Obama stated, “We’re not looking to create just any kind of jobs here; we’re looking to create good jobs that pay well and can’t be shipped overseas.” The Blog posting on the Ubikwiti website goes on to make some interesting claims, such as:
• 140,000 more jobs will be moved offshore by 2010 (Hackett Group December 2008 report).
• 25% of all IT jobs at the largest global corporations will be outsourced by 2010.
• The posting then touts some of the spending items in the current stimulus package:
• $20 Billion for health information technology and the building of its infrastructure.
• $6 Billion to improve broadband internet access.
• $11 Billion for modernizing the power grid.

The above statement by Barak Obama and the planned spending as stated above, with the intended purpose of creating jobs here at home that cannot be “shipped overseas”, does not comport very well with his newest appointment to his National Economic Council. David Sirota reports in his Blog Article, More to Promote Outsourcing Than Anyone Else In America, on an Op-Ed piece by Ron Hira, a professor at Rochester Institute of Technology and a progressive.  President Obama has appointed Diana Farrell of McKinsey & Co. to his inner circle of economic advisors. As Hira states, “Farrell's firm made millions of dollars consulting with companies, advising them to accelerate their offshoring.  And she publicly made the rounds to convince policymakers and the public that offshoring was good for them and the country.” She is also the co-author of a study entitled Offshoring: Is it a Win-Win Game?, which Hira claims did more to mislead the American public on the impact of offshoring than any other debate.

The inconsistency of the above has to give one pause. On one hand Obama states he does not want to ship jobs overseas and on the other hand he appoints, arguably, one of the most pro-outsourcing executives in this country to a top economic post. Now we throw into the mix an article in Financial 24 entitled Outsourcing Gets Crimped by Recession and its report of the troubles in India and the outsourcing field is wide open. Financial 24 reports on the convergence of several factors that may bust the Indian market for outsourcing. These factors converging at once are:

·         The global recession – no more needs to be said on this one

·         The Mumbai Terror Attacks of November 2008. This caused great concern regarding India’s ability to provide adequate security, especially for US Companies.

·         The financial scandal of India's fourth-largest outsourcing provider, Satyam. There are many questions whether there is enough regulatory oversight of India-based outsourcing providers.

In light of the serious situation facing the Indian outsourcing market, here is a list of the next emerging outsourcing destinations:

1. Cebu City, Philippines
2. Shanghai, China
3. Beijing, China
4. Ho Chi Minh City, Vietnam
5. Krakow, Poland
6. Kolkata, India
7. Cairo, Egypt
8. Sao Paulo, Brazil,
9. Buenos Aires, Argentina
10. Shenzen, China
11. Hanoi, Vietnam
12. Chandigarh, India
13. Curituba, Brazil
14. Prague, Czech Republic
15. Pasig City, Philippines
16. Dalian, China
17. Coimbatore, India
18. Santiago, Chile
19. Colombo, Sri Lanka
20. Johannesburg, South Africa

"20 emerging outsourcing destinations" by Sriram Vadlamani.

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This post is aimed specifically at the SMB enterprise and those consulting such enterprises. Recently in a post to this blog on February 3, 2008, I posted an article detailing a checklist for those enterprises that have already faced the questions on whether to outsource or not entitled Checklist Before Outsourcing Your IT.  That article has attracted a large number of readers.  In the article that follows I hope to aid those SMB’s that are still grappling with the decision on whether such a move is in their best interest.  In my research I have found an article written by Rojo Sunsen entitled 10 Ways Outsourcing Can Help Grow Your Business.  Sunsen succinctly defines outsourcing and then follows this definition with a rather direct and to the point list on the benefits to the enterprise.  I have paraphrased Sunsen’s list below; however I highly recommend the complete article in order to gain the fuller picture and what such a move can do to grow your business.

1. Employee training is reduced and allows such time to be directed to the company’s core competencies.

2. Capital outlays for equipment and software are reduced and can be placed into more revenue generating endeavors.

3. Save on the expenditure of employee recruitment to fill positions for intra-company administrative functions.

4. Hand-in hand with point #3 above is the time that is saved performing certain administrative tasks that are ancillary to the enterprises core functions.

5. Yet another savings to points #3 and #4 above are the employee benefits costs that are no longer required such as “taxes, medical, vacation time, holidays, worker’s comp., unemployment costs, etc.”

6. Office space opens up which could be better used performing the tasks required on the revenue side of the business; or alternatively, space could be sublet or a company’s leasing requirements can be reduced.

7. Order processing and delivery of products or services can be enhanced thus creating better customer satisfaction which can result in future return business.

8. More emphasis can be placed on increasing market share with the abovementioned improvements and savings.

9. In line with point #8 above is the ability to accept larger orders or take on more orders due to the economies of scale which should come about due to the outsourcing.

10. Lastly, your outsourcer can become a valuable ally in your marketing efforts and provide an additional outlet and/or network of customers.

Implicit in the above savings tips is the ability to redirect funds usually budgeted for the administrative side of the business and put these monies to better use on the revenue generating side of the P&L.

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