Foundation for Transparency in Offshoring – is it appropriate for ESOMAR members to join?

There has been a lively discussion on LinkedIn recently about the issues surrounding outsourcing and specifically outsourcing overseas, or offshoring as it is often called in the US (note, opening subsidiary in another country is also called offshoring).

The concern that the people behind FTO (Foundation for Transparency in Offshoring) appears to be twofold

1. That offshoring can be a risk to either the company doing the offshoring or to their client. For example, it might reduce quality or increase the risk of loss of intellectual property.
2. They feel that there is currently a significant amount of deception being conducted by market research vendors who are actively hiding from their clients that offshoring is taking place.

Data on this area, specific to market research, is not easy to find. If a company is secretly offshoring they are not at the same time reporting it, and there is a suspicion that even when it goes wrong both provider and buyer may prefer to spare their embarrassment by keeping quiet.

Although a move away from offshoring would hurt countries like Canada (who has historically benefitted from operations being outsourced from the US, for example call centres) the bulk of market research offshoring goes to India (although in the area of software development I suspect that Eastern Europe and Russia might be the main providers).

When the FTO simply calls for transparency, it is hard to see why anybody would disagree. Indeed many organisations, such as ESOMAR, require members to disclose all subcontracting, not just international subcontracting. On top of this, many client contracts require full disclosure and many countries have legislation with limits on things like the export of personal information.

However, the FTO has two levels of certification. The first is a logo of members who disclose the extent of their offshoring. The only quibble with that is that for many of us the requirement is already to disclose the detail of the offshoring, not just the extent.

The second logo , which is ranked first in their list, is for companies who say they don’t offshore any of their operations. I think this raises series concerns and should probably make membership of the FTO incompatible with ESOMAR membership. The logo says, in effect, I may outsource within my country, but I don’t outsource to other countries, this is protectionist and in my view wrong-headed.

My first concern is that it is morally wrong to be protectionist, we know that it hurts economies, that in the short terms it makes poor countries poorer, and in the long term hurts the rich countries too.

My second concern is more personal. Since I am based in the UK it is illegal for me to say that I won’t allow French, German, or other EU based companies to bid for projects I tender. For those of you from outside the EU, our laws mean we can’t discriminate between countries within the EU (however, the EU discriminates against countries not in the EU massively).

My third concern, and the one that relates to the title, is that ESOMAR is a global association of researchers and its aims are clearly to increase the benefits of market research around the world and to improve international co-operation.

The logo does not mean that a company does not outsource, simply that it does not outsource to another country, that is why it is protectionist and discrinatory.

So, my feeling is that it would inappropriate for an ESOMAR member to display the No Offshoring logo and probably inappropriate for an ESOMAR member to be a member of an organisation promoting such a logo. However, I would not go so far to say they ESOMAR members ought to be banned from being a member nor should they be disciplined for being a member. But I think it would be useful for ESOMAR, perhaps via Research World, to make it clear that it could not support protectionist or discriminatory measures.

I think it is unfortunate that one of the two board advisors to the FTO is as a Former Vice President of ESOMAR as it might give the impression that ESOMAR approves or endorses the FTO.

I think it would be great if ESOMAR were to sponsor a report or study looking into the risks and benefits of outsourcing, offshoring, and the degree to which some providers are being less than honest with their clients.

Comments

[Outsourcing Philippines]

I agree with that it really hurt to be protectionist. It is similar to being selfish in a sense that you focus only on helping your country. But there's no wrong to that.

[NoFTO]

If we require transparency for 'offshoring' then we need transparency for 'outsourcing' period. Mr Anderson's reference to industry's 'dirty little secret' verges upon racism. As a research client I would be offended to see such a symbol. Mr Anderson appears to discredit a valuable service to this industry.

[Ray Poynter]

Hi MarketResearcher, sorry if I did not make it clear that I am a member of ESOMAR, and like ALL members of ESOMAR I vote for the ESOMAR representatives and vote on various procedures that govern what ESOMAR does and does not do. I have no greater say than any other member, nor any less say.
Membership of ESOMAR is not open to everybody, it is only open to people who agree to abide by its code of conduct and who adhere to certain ethical guidelines.

[MarketResearcher]

Some nerve for you to suggest what might or not be appropriate for ESOMAR members