David Cadden, a professor of in the Entrepreneurship and Strategy Department in the School of Business at Quinnipiac University, is available to comment on Northeast Utilities’ decision to outsource half of its information technology workforce.
“This is one more sad example of the ghost of ‘re-engineering’ as practiced by too many American managers,” Cadden said. “In its original form, ‘re-engineering’ was meant to be a mechanism to examine business processes and eliminate that which didn’t contribute to customer value. Unfortunately, in practice, it became a rationalization for massive layoffs and outsourcing. While I can appreciate a need for cost reduction, particularly in light of its recent history, it appears that Northeast Utilities has opted for an easy path. Outsourcing, given today’s technology, may save costs, but it ignores long-term issues and sends a message to current employees that you are valuable until we find a lower-cost alternative to you. That’s not a rich recipe for developing loyalty or reducing turnover. It’s pointless to discuss in such a climate if a firm has a responsibility to a community above providing service to consumers. However, I find it fascinating that top management of these firms never examine the possibility of outsourcing their own jobs to overseas outsourcing firms. I’m sure that could produce a significant cost-saving and produce benefits for shareholders.”
To speak to Cadden, call John Morgan, associate vice president for public relations, at 203-206-4449 (cell) or 203-582-5359 (office).