US company Northeast Utilities announced plans to outsource its entire IT department to India this week, wreaking havoc across the company, causing top people to head for the exit and putting the business at risk from disgruntled employees. Slashdot described the move as insanity, especially if it is an attempt at encourage attrition to reduce severance costs, but this rings of insanity on a different level for me. There are three reasons why outsourcing is a false economy.

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