The loss of domestic IT jobs to offshore outsourcing is real, large, and will only get worse with time. According to several industry sources, last year, Indian outsourcers alone delivered more than $8 billion worth of IT services. When compared to U.S.- based salaries, which are two to three times as much, the math becomes clear—$16 to $24 billion worth of IT payrolls suddenly disappeared from U.S. and Western European domestic job markets. This situation is further aggravated by the growing number of offshore outsourcing providers in Russia, China, and a dozen more aspiring contenders in the world’s outsourcing game.
Will it get worse? Of course, it will. According to Gartner, the Indian outsourcing sector is presently expanding at a 25 percent annual compounded growth rate. Russia is developing even faster—in excess of a 40 percent annual compounded growth rate. This is all happening while U.S. domestic IT spending growth is at a near standstill. Welcome to the world of global economies!
Unfortunately, for our domestic work force, the real appeal and the resilience of offshore outsourcing is based on the true value that it offers to U.S. and Western European enterprises. In fact, the value delivered by offshore outsourcing organizations continues to increase. Offshore service providers first truly appeared on the scene in the late ’90s, while offering inexpensive solutions and a ready resource pool to address the real or imaginary threat of the Year/2000 bug. Since then, offshore outsourcing rapidly evolved to offer a highly skilled work force with advanced technological knowledge, mature project management processes, and levels of quality that frequently far exceed generally accepted practices in domestic U.S. and Western European markets. The reality is that India is now leading the world IT industry in its adoption of the Capability Maturity Model (CMM), and Russia is offering true, compelling value when it comes to deeply scientific solutions. It’s not hard to imagine what will happen when the 1 billion strong population of China becomes a true player in the world’s outsourcing market.
“How to survive in the age of outsourcing?” is a burning question for our domestic IT work force. Using the wisdom of recent New York Times bestseller, “Who Moved My Cheese,” the answer is obvious but not pleasant: It is time to start searching for new employment opportunities. This does not, however, mean trading in your laptops for hard hats or retraining for new careers in medical or accounting professions. There are viable survival strategies that can place you right at the top of the employment game without having to leave the IT sector. There is no need to lose the numerous years of knowledge and experience that you’ve accumulated while working on countless projects and solving middle-of-the-night production problems . . . but you have to move to survive.
MOVE UP THE ORGANIZATIONAL CHART: LEAD
The most obvious survival move is up the managerial or technical organizational ladder. Although middle-level management has recently come under a lot of pressure from shrinking IT budgets, a solid leadership position is still very much a domestic occupation. Furthermore, the higher you can get up the managerial chart, the more protected you are from losing your job to your Indian or Russian counterparts. Rarely, if ever, organizations outsource positions of leadership and decision-making. Interesting enough, you can further protect your organizational standing if you can develop expertise in managing outsourcing projects. There is a real industry shortage of experienced managers who are able to combine their organizational skills with the ability to work in multi-cultural and multi-country environments. In other words, you can find a safe spot by placing yourself right in the eye of the storm.
If managing people and playing office politics is not your game, focus on advancing your technical skills to the level of system architecture or program management. Once again, it is unlikely that any organization will relegate its strategic technology decisions to an outside third party. Charting your organization’s architectural road map or driving a cross-departmental advanced technology initiative is a challenging and rewarding responsibility that offers additional benefits of being immune from the outsourcing trend.
Of course, it is not easy to get to the top of the organizational chart. The competition is fierce, and the opposing contenders are smart and persistent. If you find yourself strained while “moving to the top,” try another approach—move to the leading edges of your organization by demonstrating either business or technological vertical domain expertise.
MOVE TO THE LEADING EDGE: SPECIALIZE
Convergence of business and technical skills is the nirvana of any IT organization. Find an IT professional who has deep knowledge of a specific business area and you can be assured that you are dealing with someone who has strong employment insurance. If this individual can combine this business knowledge with strong interpersonal skills, and the ability to actively listen and effectively communicate with business end users, he can be assured that he is fully immune from any kind of outsourcing initiatives.