Is there a service that cannot be offshored? Logically, it would seem so, but an experiment in which DuPont is outsourcing a big chunk of legal work to an offshore firm makes us realize that companies are willing to consider this model for services that until recently seemed immune to offshoring.
DuPont, which has a big case involving multiple insurers coming up, reckons that some 70 percent of the work involved in such a case -- much of it tedious document scanning and photocopying -- can be outsourced.
By using an offshore firm for at least some of these tasks -- for which DuPont has typically been billed at a hefty hourly rate -- it hopes to trim up to $6 million from its annual $200 million legal bill.
Along these same lines, companies are increasingly open to the possibility of offshoring R&D activities and other work once considered too "intellectual" or "creative" for the offshore model.
An AMR Research report found that many companies that outsourced at least part of the product development process got those products to market faster -- an increasingly critical advantage in today's hyper-competitive environment.
We've already seen this play out in software development. By sending tasks like programming and coding to outside firms, companies are trying to reallocate their internal labor to where it really counts -- higher-level activities like application development.
The key seems to be slicing and dicing processes so that the highest value tasks are performed in-house; consider contracting with a capable outside firm for most everything else.