Editor's Desk

Reality Bites

How does outsourcing--or how will it--affect you?

It’s hard to have a reasonable discussion about outsourcing these days. Frequently, people instantly attach the concept of offshore job losses to it and tempers rise. I recently attended an outsourcing conference, which was besieged by a contingent of red-shirted protesters waving signs that said, “Keep American Jobs in America,” and yelling, “Stop outsourcing now!” and, “Hey, hey, ho, ho, outsourcing out the door!”

The fact is, many of you work for companies that solely exist to provide IT services to clients. That means you’re part of the outsourcing industry. Contrary to what you might think or read, that’s the biggest face of outsourcing today, as I point out in this month’s cover story on the topic—not sending IT projects to offshore workers in India or China. Outsourcing, which has existed for a very long time (does your organization use a janitorial or cafeteria service, or generate your paycheck externally?), is a solution to what some perceive as major long-term problems in IT: high capital and staff investments, skills shortages and the need to stay flexible in order to address quickly changing business conditions.

Nobody understands better the need to stay light on your feet than MCPs. Most of you have multiple certifications. You’ve tried out different kinds of IT work. And you recognize the need to keep retooling yourself to stay on top of your field. Some of you have complained about this ever-changing field of toil—sometimes because it was Microsoft telling you it was time to move along.

But this time, we can’t blame a single company for forcing us to learn new stuff or work in a different way. It’s—plain and simple—world conditions. To the swift and the adaptable will go the rewards.

By the time this great shift in work patterns stabilizes in the next 10 or 20 years, many of you will no longer be in IT. It used to be we’d say to ourselves, we probably won’t work for the same company for our entire careers; now we may have to start saying, we probably won’t work in the same profession.

Some of you may believe the government should legislate to control outsourcing. Does that mean those of you who deliver IT services to external clients would be out of work because your companies would be shuttered? If it’s only offshore outsourcing, what would that look like? How would it be enforced when corporations are no longer strictly American or British or German?

For my part, I believe the government’s role is to come up with some form of GI Bill-like effort to help those going through a work transition. I also expect unions to play a bigger role with IT workers, if only to help push for fair play from the organizations where they’re employed. But protectionism fails in the end. What you can’t do is face this tide and expect to change its direction.

Do my opinions make me a turncoat to you, my reader?

About the Author

Dian L. Schaffhauser is a freelance writer based in Northern California.

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Reader Comments:

Wed, Mar 19, 2008 Anonymous Anonymous

Completely neglects the fact that domestic outsourcing still has localized value, in terms of providing our economy with income tax, property tax, and local spending. Further, new skills and "training programs" fail to account for the fact that no job is safe from offshoring. Offshoring focuses primarily on short-term cost savings, and completely disregards all other concerns that relate to our way of life, which are too numerous to mention here.

Tue, Apr 20, 2004 Bob Harrell Deming, NM

It's time to serve notice that outsourcing to foreign labor markets is unacceptable corporate behavior. Just because "everybody else is doing it" doesn't make wrong actions right. HP CEO Carly Fiorina's statements that her company and like-minded, outlaw U.S. businesses are not obligated to hire any American workers at all are offensive and irresponsible. If a company wishes to do business in this country, they must be compelled to accept the priviledge to hire qualified labor directly from the society in which they want to profit. Yes, this repulsive and hateful foreign outsourcing tide must be faced in the most urgent manner, and it is not too late to close the door on it for good. Nearly every other industrialized country in the world has already done so.

Mon, Apr 19, 2004 Anonymous Anonymous

If outsourcing is here to stay, and CEO's are doing it to cut costs. Where do these savings go??? I have nver seen any company pass those savings back to the economy. IT jobs go offshore, and prices go up for the product. If moving jobs offshore is such a cost saver, where does all the "saved" money go?

Mon, Apr 19, 2004 Patrick Cincinnati

Unemployed I.T. folks don't need to buy tech magazines... or certs anymore. If I actually stop spending on I.T. certs and publications I may find my income shoot way up. How is outsourcing affecting me so far? 20 to 30 percent pay drop. Not really worth it anymore to be in the business. No appreciation, and now no money.

Sun, Apr 18, 2004 Michael Australia

Outsourcing is fine, if it's done right and has quality controls. I know lots of contractors that make far more money than me. Offshore outsourcing is blatant profitering. Next time your speaking to a call centre in India ask the representative if they know what a union is, what collective bargining is, what an EB (Enterprise Bargining) Agreement is? We need to export some unionists to these low cost countries and bring their working conditions into alignment with ours, then the offshore outsourcing problem will solve itself. Can anyone actually tell why different currencies HAVE to be worth different amounts?

Fri, Apr 16, 2004 Rob Petaluma CA, USA

Sad but absolutely on target. Remember the armies of clerical workers that were replaced by widespread use of computers, or the railroad workers caught in an industry made almost obsolete by trucks on US highways.
IT was fun while it lasted but the party's winding down. Survivors will face reality and find a way to deal with the challenge but others will complain and blame capitalism, foreigners or other convenient scapegoats.

Fri, Apr 16, 2004 Judy Sunny Silicon Valley

Sad, but your perspective is realistic. When I was a kid, I saw the egg man and the milk man lose out to grocery chains. Look at the changes that digital cameras are making to the camera business. ---But I do think that there should be some kind of tax or penalty or such for jobs that go overseas, with the monies collected going to retrain displaced workers. I haven't seen any executives take cuts in pay or have their jobs shipped overseas, and it bugs me to see the middle class take such a beating. (I still don't believe that they HAVE to go overseas because they can't find one person within 200 million American citizens who is skilled enough to do a job.) I've seen this opportunity taken advantage of by management, so I agree that something ought to be done, something short of protectionism.

Fri, Apr 16, 2004 Bryan W. Dallas, TX

Unfortunately, outsourcing is the wave of the future. As long as shareholders allow CEOs to make decisions based on stock price and are rewarded with obscene salaries, the trend will continue. Governnment should not adopt a protectionist strategy. That will only hurt trade. If you want to stop outsourcing, start outsourcing CEO jobs and see how fast the trend would reverse. Just think of the cost savings when a CEO is paid $500K instead of $5M.

Fri, Apr 16, 2004 Doug Calif.

I still think that we should be training our own to do the jobs that need to be done here. Sending them out of the country to save a buck when we should be training our own is wrong

Fri, Apr 16, 2004 Ian Nottingham, U.K.

Manufacturing jobs have been going to the far east for years so it's not surprising that some office jobs are now going the same way. A lot of the help-desk jobs being outsourced will probably be made redundant by the application of more web-based technology anyway. The one industry that the US and Europe continues to protect with massive subsidies is agriculture.

Fri, Apr 16, 2004 Michael Tampa, Florida

Obvioulsy the concept of outsourcing has been around for a long time. That is/was the whole basis for the consulting industry. If you didn't have a particular skill in-house, retain a consultant. That was the mentality when I entered the IT field in 1979, however, that's not the mentality today. The true issue is not "outsourcing" nor is it "offshoring". Again, there is nothing wrong with retaining "outside" help for a skill set you are lacking in your shop. This, unfortunately, is NOT what corporations are doing. In the past 24 months I have seen more than 100 coworkers let go as IT work was moved to South America & India. This wasn't about skills, this was (and still is) about money! Are we (you) so nieve that we truely believe that, with 1000's of unemployed IT workers, there are insufficient and/or available IT skills within our own borders? Please. As for protectionist legislation? It won't work. Corporations would simply resort to "building" IT organizations offshore so as to avoid penalties or taxes for exporting jobs. Lastly, this isn't just a domestic problem. European IT workers are facing the same problem. Corporations are simply looking for CHEAPER (not better) labor to reduce costs and improve profit margin. That's what "offshoring" is truely about. I really wish those persons trying to convince the general public that this is about necessary skills would stop insulting our intelligence.

Fri, Apr 16, 2004 Noel Minnesota

The question really becomes what do we as developers and IT people do now? Do we give up, knowing that the pursuit of happiness in the career that we love is no longer an option? Do we try to become more and more educated in order to stay ahead of the rest of the world and remain leaders in IT? Are there pockets of IT that we may concentrate on that are more unlikely to be offshored? Commentary and debate of offshoring is all fine and good, but what we need to be seeing now are articles about what you (the IT man) can do to stay on top. We don't need commentary on what is right or wrong or why it's good or bad. Offshoring is here. Now is the time to adjust and how are we going to do it?

Fri, Apr 16, 2004 Anonymous Anonymous

protectionism works just fine for every other nation on the face of the earth. American workers are the only ones forced to give their up livelihoods and traditions and culture to other nations because of corporate greed.

Fri, Apr 16, 2004 Les Allentown, PA

When I started reading this article in the MCP mag, I got really angry. By the time I finished reading the story though, I was in almost full agreement. I fought hard to get a job in IT, so I still have a problem with outsourcing. Ironically, I have thought myself about the sentence you wrote indicating will workers stay in IT their entire lives. I can honestly say, I don't think it will happen for me. I've only been in the IT field for a total of 6 years, and I feel like I'm already burned out. I do see myself moving on to something else in my life, I just haven't figured out what is best for me and my family yet. I guess the bottom line though is that I still don't agree with outsourcing; I truly believe the cons outweigh the pros. That's just one man's opinion.

Thu, Apr 15, 2004 Mike S. Tribeca, New York City

The US military, paid for by taxes from EMPLOYED US workers protect the free world. As we move "good" jobs offshore, and only create low-wage no future jobs, this will no longer be possible. Outsourcing is fine. Offshoring however, has the potential to destroy American civilization. The great mass of American people know this, and politicians and columnists should ignore this at the risk of their careers.
Dian, you should be brushing up on your Hindi skills, and consider relocating to the subcontinent, if you want to stay employed yourself.
As for me, I will be proactive in fighting offshoring, and I will vote with my 'feet', and just end my MCPMag subscription in protest.

Thu, Apr 15, 2004 Bill Memphis, TN

Union, what union. If you are realy a professional you do not need a union. "We will pretend to work as long as they pretend to pay us." The idea is to prepare your self for the changes in the job market as technology changes. YOUm not government or unions, are responsable for retraining workers or seeing what is coming down the pike.
When their is an abundance of people with a particular skill set the wage goes down. The IT field today is easy to get into but how much education does the adverage IT profession realy have in the area of IT.
How many of you can program in assembler for any processor?
How many of you know what is really hapening durring a compile let alone a linkedit.
Can you explain what is happening underneath the covers with virtual memory.
Where should yoy place the paging files? Spool files?
Every profession goes through an influx of margional practioners. Hang in, if you really know your stuf you will survive.

Thu, Apr 15, 2004 Anonymous Anonymous

Outsourcing at its worst is a reverse union: access to jobs is controlled by a 3rd party to the benefit of the employer rather than the worker as in the case with a worker union. (I'm not a big fan of either union or outsourcing to be honest). How many times has a company decided to outsource IT operations and the workers are offered the same job with the outsourcing company they had with lower benefits and wages? The word on the street here in MN is that is exactly what a large electronic retailer headquartered here is planning to do. The profit for the outside company will come from the lower compensation payed the workers who will do the same job.

Thu, Apr 15, 2004 gw Anonymous

MCP Mag should move to India and hire writers from India to write about the certification issues for the IT workers of India.

Thu, Apr 15, 2004 Anonymous Anonymous

<< I believe the government's role
<< is to come up with some form of
<< GI Bill-like effort to help those
<< going through a work transition.

Won't take much of a program to teach us how to flip burgers - which I'm afraid might be the only job besides corporate fatcat left in America.

Mon, Mar 29, 2004 Curt Spanburgh San Diego

Realistic. That is the way it must be. There is a balanced way to do all of this. How many people changed their own oil when they were younger. Now they have the dealership do it. It is cheaper to have someone do something for you. Globalism is here. You can not stop it. Yet, as a consultant, I see the limitations of outsourcing. I am not trying to take money out of my pocket here. The truth is, that if you do something that most people cannot do, you cannot be everywhere at once.
So good IT people will still have a job.
Outsoucing to "offshore" is another thing.
There is nothing wrong with someone having a job, if he or she can do it.
But can they?Communications is "Still" a problem.
Not just language but culture. This is the break down. There is a very good reason why Dell moved server support back to the U.S., along with laptop support. Even in certain parts of the U.S, peoples accents and cultures create road blocks to smooth business relationships.
There are other problems too. Some present day IT workers, studied to "get a job", but had no real interest in technology. This created a class of IT workers that, indeed became part of the "Service industry". Yet, this field is really for innovation. That is why Intel, AMD, Compaq and Microsoft exist. It did not come from "off shore". By getting a real overview of the "Garden" of the IT industry, corporations should see where the real good "soil" is and make their investments there. There is a great proverb. "Have you seen a man skillful in his work. Before Kings he will station himself and not before ordinary men".

These people can come from anywhere. It could be any of the readers of MCP Mag.

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