New ways to contract IT work to base-of-the-pyramid suppliers.
tices but also starting to include environmental issues.
˲ Social outsourcing (also known as
developmental outsourcing) differs
from ethical outsourcing as fair trade
differs from ethical trade. Ethical outsourcing involves existing commercial
players with either a commitment to
or measurement of adherence to standards. Social outsourcing involves new
non-market intermediaries who sit between the client and the BoP supplier.
The key problem for the approaches shown on the left side of the continuum in accompanying figure—
arbitrage especially but also some
mainstream contracting—is sustainability. 1 They are associated with high
levels of staff turnover and negative
publicity about “digital sweatshops”
and loss of IT jobs in the global North.
From time to time, this blows up into
public relations disasters for client
firms and a high-profile reversal from
offshoring to onshoring. In all cases,
the bottom-line issue is the bottom
line: these approaches can end up
raising costs and failing to reap the
benefits of low-wage IT staff in developing countries.
INFormatioN teChNoloGy imPaCt sourcing is a new approach that clients can take when they outsource IT-related work to base-of-the-pyramid (BoP)a
suppliers. In this column, I explain why
impact sourcing is worthy of greater
consideration and support from the IT
professional and academic community.
Supply of IT work from the base of
the pyramid is growing as diffusion
of digital technology and attendant
skills becomes almost universal. In
theory, BoP supply would mean drawing IT workers from communities in
developing countries averaging income levels of less than $2.50 per person per day. In practice, the idea covers a looser sense of IT staff that hail
from low-income areas and/or have
been excluded from mainstream employment opportunities.
Clients can select from a continuum of approaches to BoP outsourc-
a The base of the pyramid, also known as the
bottom of the pyramid, is an economics-de-rived term referring to the largest, but poorest,
global socioeconomic group comprising approximately four billion people.
ing, as summarized in the accompanying figure:
˲ Arbitrage outsourcing seeks to bear
down on wages and working conditions in order to minimize costs and
˲ Mainstream outsourcing is a conventional approach that reflects the
steady diffusion of outsourcing suppliers from cities to large towns to small
towns and beyond.
˲ Ethical outsourcing (also known as
socially responsible outsourcing) takes
mainstream outsourcing and requires
that it meet certain minimum standards; typically relating to labor prac-
the entire range of
can be encompassed
by impact sourcing.