As President-elect Obama prepares to take office, many people are wondering what impact his administration will have on global sourcing, as well as the types of policies he will put into place.

Obama is stepping into power at a time when the American economy is struggling.  According to the article posted on CIO.com, What Effect Will President-elect Obama Have on Outsourcing, he will need to develop programs and policies to help stabilize and turn the economy around.  Obama will need to put governance systems and agencies in place to ensure another financial crisis will not happen again.  Once the economy begins to stabilize, there will also be more fiscal stability.

According to the article on CIO.com, Obama will be facing so many major issues that it is not likely that he will place outsourcing on his priority list. 

Indian suppliers have transformed from using their initial business models and are now providing more than just labor arbitrage.  These global sourcing providers are offering business models and services that focus on increase in productivity, faster turnaround time of products, improved quality, intellectual property protection and more.

Numerous global brands, such as GE, IBM, Microsoft and AOL, have large facilities and direct employee bases in India.  These Indian centers help the companies stay competitive, while increasing revenues.  Even if Obama’s proposed $3,000 tax credit to employers for each employee hired in the United States goes through, it should not affect the decision to hire offshore.  The reason has to do with the reduction in labor costs and overhead associated with offshore locations, such as India.

Another point addressed in the CIO.com article had to do with the diversity in Indian business models.  Business models among Indian suppliers are much more diverse than in the past and have the capability to withstand economic fluctuations better than before.  IT companies in the United States will continue to look for ways to cut costs and improve competitiveness, which should drive the global sourcing industry.

The bottom line is that most people feel that Obama will not have the time or resources to focus specifically on large-scale policies regarding outsourcing.  Therefore, his administration should not immediately impact the global sourcing market.

A&E Consulting is a leading global sourcing consulting firm that helps businesses with their global sourcing needs.  The consulting experts at A&E Consulting can help organizations choose the right global sourcing provider, as well as assist with overseeing the first outsourced project.

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