Re: RBS Management
I don't know how the financial picture looks in the UK, but in the US the financial case for outsourcing has a ton of caveats and asterisks attached. 15 years ago the financial case for outsourcing to India was obvious (financial case, morality and national interest aside). Over the last five years, the salaries for IT and engineers have been increasing by 20% per year in India while the US rates have basically been stagnate or decreasing. The current predictions, which were cautious, from the BLS are that it will be more costly, in raw terms, to hire an Indian programmer than a US programmer by 2017. That does not factor in the high overhead on outsourcing contracts, such as sales, PM, various liaisons which are for some reason required, travel, government costs, administration, communication tech, etc.
The other headwind against outsourcing in the US, and even more so in Europe, is that the currencies are still strong vs. Rupee. That should swing in the other direction pretty furiously as the Chinese, and to a lesser extent, the Indians have been sterilizing their currency by parking their profits in US treasuries. They cannot go on parking their profits in US treasuries until the end of time... eventually they are going to get concerned that the US cannot pay it off, even with the US's giant economy. When they have to start spending their cash in non-dollar denominated bonds (e.g. buying stuff), the Eastern currencies will rise substantially and the export led economies will lose their cost advantage. It has to happen... It is getting very close to the end of offshoring, at least in India. The corporations have, of course, been going to even weaker economies such as the Philippines and China, but they do not have the talent or educational system that India has and the same principles apply. The Western governments and populations, with the exceptions at top, are flat out broke. When one group of people has all of the money and another group of people has none, the group with none cannot go on buying stuff from the group with all the money on credit from the group with all the money ad infinitum.