Sourcing Global Transformation

by Nikhil Sinha

The Economic Times , 10th August 2006

Nikhil SinhaWe live in a historical period of transformation in which a new global system is emerging. The two key features of this order are globalisation and the revolution in information and communication technologies. The principal driving force and the material basis of this transformation is the development, deployment and exponential growth of ICTs.

The emerging system is global because the central functions of production, transportation, distribution and consumption, as well as the many critical resources of any economy are being organised on a global scale and through global networks. But globalisation and the information revolution must find articulation in concrete economic, social and cultural phenomena.

One of the most prominent and significant examples of such concrete phenomenon is global sourcing. Various terms have been used to describe this process — outsourcing, in-sourcing, offshoring, near-sourcing, right sourcing and the like. Global sourcing drives the formation of new economic relationships.

The defining terms of these new relationships are collaboration and interdependency. The development of global sourcing is possible only if firms learn to share physical and intellectual resources. If global sourcing is an outcome of the twin forces of technology and globalisation, it is itself forcing significant changes on economic actors.

At the firm level, global sourcing demands a fundamental restructuring of organisations. The management of internal resources must give way to the management of global relationships.

As global sourcing opens up the possibility of jobs migrating offshore, workers must acquire new skills and learn new specialisations to maintain employment.

For corporate and individual consumers, global sourcing means lower prices and expanded choices. Global sourcing is also transforming work and work practices around the world.

The harmonisation of business processes necessitated by global sourcing requires an understanding of work practices in different geographies while simultaneously forcing the increasing homogenisation of these practices to the extent that, in cases such as the outsourcing of call centre functions, the transactional experience typical of one locale may even have to be simulated from another.

In order for such processes to be successful, it is vital that workers around the world develop expertise that will allow them to virtually step into the shoes of another worker thousands of miles away.

It is also imperative that they have access to technologies that make such virtual migration seamless and transparent. It is quite possible that the growth of the global virtual workplace will significantly re-cast the debates about legal and illegal migration. Global sourcing is essential to the transformation of workers, companies, industries and national economies.
Global sourcing is the manifest articulation of the forces of informationalisation and globalisation —the concrete site in which the inter-play of these two transformative forces can be clearly discerned.

But global sourcing is itself a transformative force, driving ever closer economic relationships among actors in different parts of the world and continually spurring the drive to develop and deploy the global lattice of information and communication networks — all the while, impacting those individuals, firms, industries and nations that participate in this transformative process.

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