This will be true until comparative advantage has been exceeded.
This principle says that the total output will be greatest when each good is produced by the nation that has the lowest domestic opportunity cost for that good. Which means as long as the relative opportunity costs of producing goods differ among nations, there are potential gains from trade. This is just being efficient. A simple non-service example (but applies to service as well): If the US produces wheat more efficiently than Brazil and Brazil produces coffee more efficiently, then both countries are better off by adjusting their production possibilities curve so that the US sells wheat to Brazil and Brazil sells coffee to the US. What happens when an economy is risen, in part by the increased jobs and revenue? Well the gap between opportunity costs, that originally pushed out the frontier now makes that country less attractive and no longer have their competitive (comparative) advantage. At that point resources will be either diverted to another country (if one exists for that good or service) or they will be forced to use their own country resources. Outsourcing cost benefits will not last forever because the economies of those countries outsourced will eventually catch up to an equilibrium point but not in the near future. These countries do this through specialization but as they equalize, they lose that specialization. As firm's implicit costs (opportunity costs) are consumed by their "best alternative use." Right now its several countries like China, India, etc. Regards, Shan Shan Harter VP of Project Services Systrends, Inc. 7855 South River Parkway Tempe Arizona, 85284 480-756-6777 Ext 205, fax: 480-9755, cell: 602-821-2951 -----Original Message----- From: William J. Kammerer [mailto:[EMAIL PROTECTED] Sent: Wednesday, January 12, 2005 2:43 PM To: EDI-L Mailing List Subject: [EDI-L] The compelling logic of off-shoring To Brian Lehrhoff: see below. I was right! You can easily save 50% when off-shoring. Consider that when you want to provide prescription drug coverage for old farts or field armies in far-off places. Indians may or may not be better mappers or programmers, but you have to admit they have a heck of lot less overhead. William J. Kammerer Novannet, LLC. Columbus, OH 43221-3859 . USA +1 (614) 487-0320 ----- Original Message ----- From: "Sarwin Harris" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, 12 January, 2005 09:40 AM Subject: Follow up on the proposal send Dear Mr.William, I am trying to follow up on the proposal sent to you a few days back to partner with Novannet, LLC for your EDI Mapping needs using our offshore resources. Kindly go through the proposal where you can find the cost benefit attained by and also our technical capabilities. We would also be glad to meet you and make a presentation of our service offered .Please do shoot me an email on the status of the proposal. Thanks and have a great day Regards Sarwin Harris. Proposal This note is an introduction to Datec Corporation's services in the EDI area. We are looking to save you about $30000 per mapper per year. Our monthly rates, fully loaded, are in the range of $3000 per month for a mapping expert and software developer. A 50% cost savings in your mapping process is the minimum that we offer. On a per map basis a 810 or 850 typically costs less than $300 per map. In case you have been thinking that your mapping or s/w development activity is becoming a difficult expense to sustain, we offer you the inevitable solution. Out-source the mapping work to our team of dedicated developers and mapping personnel. The whole integration process would take a month or so. Our team has experience with common translators like Mercator, Sybase EC Map, ProEDI and custom web services. Our current team on EDI development services alone is 25 strong. The ECMAP team is a 11 member team. Some points that may be relevant. 1. Software enhancements, Mapping and QA is a module of work which can be subcontracted. 2. Mapping and QA is tedious and often cannot be automated. 3. Work load is not uniform. 4. The team is expensive to maintain. Our Solution. 1. Our development team works out of India. 2. We are connected to your team 24x7 on phone and over the web. 3. The team needs one week at most to be productive on your tools and libraries. 4. Our project manager is available for coordination work from California. 5. We can work for you on monthly charges per developer or per map basis. Your team can continue to focus on client interaction and integration issues while our team does the mapping and QA work. We look forward to interacting with you on ways to help you achieve significant cost cutting in this area. Our website is www.datec-corp.com Thanking You, Sarwin Harris Datec Corporation 39355 California Street #309 Fremont, CA 94538 Tel- 510-505-9032 [EMAIL PROTECTED] . Please use the following Message Identifiers as your subject prefix: <SALES>, <JOBS>, <LIST>, <TECH>, <MISC>, <EVENT>, <OFF-TOPIC> Access the list online at: http://groups.yahoo.com/group/EDI-L Yahoo! Groups Links CONFIDENTIALITY NOTE: This message and any of the attached documents contain privileged and confidential information only for the use of the individual or entity that was the intended recipient. If you are not the intended recipient you may not read, copy, distribute, retain or use this information. If you have received this message and any of the attached documents in error, please immediately notify the sender by reply e-mail and then delete this message. Thank you. . Please use the following Message Identifiers as your subject prefix: <SALES>, <JOBS>, <LIST>, <TECH>, <MISC>, <EVENT>, <OFF-TOPIC> Access the list online at: http://groups.yahoo.com/group/EDI-L Yahoo! 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