Companies that choose to "offshore," or move contracted work overseas in search of operational savings, face a host of challenges. More news of labor woes at a major Apple contractor, Hon Hai Precision Industry Co., a.k.a. Foxconn, is a case in point, prompting questions about the value of offshoring compared to its difficulties.
According to the Wall Street Journal, Hon Hai claimed this week that management discovered underage interns, some as young as 14, working in a plant in China's Shandong province. The interns were part of Hon Hai's partnership with local schools to offer hands-on experience for students. The manager in charge was fired, and the interns were sent home.
All of this raises many questions about the risks and rewards of offshoring. Topping the list: What does Apple -- and, by extension, other enormous US companies -- get from continuing to support manufacturing in China, particularly in the face of so much controversy?
The answer is multifaceted. First off, some observers blame the Obama administration for continuing to tax corporations in ways that discourage them from outsourcing domestically. Apple's size and scale make the tax issue paramount.
Another issue is that Apple sells more than half of its products outside the US, which some insist encourages sending jobs overseas while reaping revenues from demand in other nations.
Last but not least, Apple and other companies realize big savings from offshore labor. Sadly, some of those savings may be related to working conditions that would be considered substandard elsewhere. "What's morally repugnant in one country is accepted business practices in another, and companies take advantage of that," Nicholas Ashford, a former chairman of the National Advisory Committee on Occupational Safety and Health, told the New York Times early this year.
"Like it or not, we live in a world in which investing and creating jobs overseas is necessary for the survival of many American companies," Andrew Cline wrote in USA Today.
Every enterprise must decide how to make its supply chain most efficient. In many cases, a mix of legislation and cultural reality make the alternative of offshoring too attractive to resist.
Not a chance of that happening. Minimum wage, plus all statutory leave and other benefits? I don't think so. Might as well employ people at home.
On the other hand, they need to make sure they're not running slave camps -- at least, not after the CEO has said: "What we will not do - and never have done - is stand still or turn a blind eye to problems in our supply chain. On this you have my word."
Is that really true, Mitch? Sometimes, as the man said, what's acceptable in one country isn't in another.
I agree that US firms should operate on the ethical level of companies in the USA. But that's my view. It's not necessarily the view of Apple's board, or even of US corporate law.
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Enterprises are embracing open-source to avoid vendor lock-in, get better-quality software, and gain access to larger libraries of applications. In return, they may be putting themselves at risk for higher, more complex support costs.
Whereas some businesses search externally when they need a CIO, Choice Hotels had to look only at its CTO for someone with the necessary expertise, industry knowledge, and technological know-how to continue leading the company's embrace of enabling technologies.
Local social media can be powerful marketing tools, but they can't just be add-ons. They need to be tightly integrated into the corporate culture, according to Whole Foods social marketers.
Sequestration has only highlighted the financial stranglehold that many federal IT executives are forced to address, yet some agency leaders are using these budget-strapped times to jump-start innovation.
In the wake of an earthquake and tsunami in Japan, enterprises should be reconsidering their supply chains and establishing backup plans for when disaster strikes.
If you listen to the hype, clouds are everywhere. But if you look at the data, it turns out most customers say they still wouldn't use cloud computing for mission-critical apps or data. What's holding them back? Fritz investigates.
It wouldn't be the first time, but a group of Chinese engineers has proposed a means by which the Internet's root could be split, enabling secondary, independent networks that could be government-controlled. The Internet's root security committee is taking such proposals seriously.
US counterterrorism expert Richard Clarke, who came to prominence with his prescient warnings before the 9/11 attacks, tells Smithsonian Magazine the US was responsible for the Stuxnet supersmart worm that attacked parts of nuclear reactors in Iran – and in the process, has given away one of the world's most sophisticated cyberweapons.
We think Amazon's Kindle Fire is pushing Apple to a smaller iPad format. But Sony's Vita and the interest in a small device for portable gaming may create the real threat. Keep your eye on the tablet-gaming space!
New York's Metropolitan Transit Authority is conducting a pilot test of digital kiosks to guide subway users to where they want to go more efficiently and at lower cost.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
While NFC's original goal was to enhance mobile commerce applications, it is finding its way into a number of other uses, which is creating both opportunity as well as challenges for IT departments.
Enterprises would like to move to cloud computing but are hesitant because they are concerned about providers’ ability to secure company data. Here are some tips that help to ensure that if breaches occur, the business is not left holding the bag.
Edmunds separates customers into segments based on the info it collects on its site and from partners, and uses that to push out custom content, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
The automotive website uses propensity modeling to target ads and customer registration forms, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
Ushering in a new era of cognitive computing systems, IBM announced today the IBM Watson Engagement Advisor, a technology breakthrough that allows brands to crunch big data in record time to transform the way they engage clients in key functions such as customer service, marketing, and sales.
Expert Integrated Systems: Changing the Experience & Economics of IT In this e-book, we take an in-depth look at these expert integrated systems -- what they are, how they work, and how they have the potential to help CIOs achieve dramatic savings while restoring IT's role as business innovator. READ THIS eBOOK
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M2M: Rise of the Machines? Not Yet David Weldon In the 1970 science fiction thriller Colossus: The Forbin Project, two giant supercomputers from the United States and Soviet Union secretly join forces to take control of the collective nuclear might of the two countries. In the film, the two machines discover each other's existence, communicate back-and-forth, share their collective data, and cut their human creators out of the process. It is the ultimate example of machine-to-machine communications, or M2M. CLICK FOR MORE
M2M: Rise of the Machines? Not Yet David Weldon In the 1970 science fiction thriller Colossus: The Forbin Project, two giant supercomputers from the United States and Soviet Union secretly join forces to take control of the collective nuclear might of the two countries. In the film, the two machines discover each other's existence, communicate back-and-forth, share their collective data, and cut their human creators out of the process. It is the ultimate example of machine-to-machine communications, or M2M. CLICK FOR MORE
M2M: Rise of the Machines? Not Yet David Weldon In the 1970 science fiction thriller Colossus: The Forbin Project, two giant supercomputers from the United States and Soviet Union secretly join forces to take control of the collective nuclear might of the two countries. In the film, the two machines discover each other's existence, communicate back-and-forth, share their collective data, and cut their human creators out of the process. It is the ultimate example of machine-to-machine communications, or M2M. CLICK FOR MORE
M2M: Rise of the Machines? Not Yet David Weldon In the 1970 science fiction thriller Colossus: The Forbin Project, two giant supercomputers from the United States and Soviet Union secretly join forces to take control of the collective nuclear might of the two countries. In the film, the two machines discover each other's existence, communicate back-and-forth, share their collective data, and cut their human creators out of the process. It is the ultimate example of machine-to-machine communications, or M2M. CLICK FOR MORE
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