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Offshoring IT Continues to Fail
or "Rebirth of the Innovative U.S. IT Professional : Salaries are Going back Up!"
or Rebirth of the US Information Technology Professional as a Valued Asset
or Why IT Management continues to be the problem in US Information Technology Today!
Offshoring began and US jobs were shipped off
If you are in Information Technology and a "professional" in the Information Technology field (say from the United States and a software developer, etc.) then you are most likely aware of the recent news surrounding the term "offshoring". You may also be aware of the term "outsourcing" as well. You also may have read about the threat that offshoring has posed for the IT Professionals in the United States. You also may actually have been one of the many IT professionals laid off in the past 5 years following the "hype" surrounding this change, one that that involved your own companies outsourcing strategies. My heart goes out to you my bother. It would seem that as silly little Forrester Research keeps predicting, 30% of Information Technology jobs will disappear from the US by 2010 or 2015, IT will be automated, and everyone's innovation technology needs will be solved, along with savings, and business will be built on some sort of "new breed" of business process management teams, farming out little tasks to armies of Indians and Chinese for pennies on the dollar.....hehe....sorry, had to chuckle there a bit. Ok, let us resume with my article....
Now, to back track a bit, we all know that there are outsourcing firms in the US that hire and use US programmers and IT people to do the work companies farm out to them. But more and more, according to surveys, are also outsourcing jobs and work to India, and now China, in the hope of saving money. There are plenty of articles online about offshoring and outsourcing and plenty of controversy on the subject. I don't want to get bogged down in all the information. That's out there. But I do want to begin by saying if you are in IT in some form in the Western World, then you should be familiar with the threat that offshoring has on your career and ability to earn a living in your field. Many companies and Fortune 500 companies for that matter have banked on the notion of laying off thousands of IT professionals here in the US with the thought that Information Technology can be neatly packaged up (with a bright red bow) as a service and process, and sent overseas where slave labor in India can essentially provide the "same service", but at one tenth the cost (kind of like those nice little plastic toys you might have bought when you were a kid at the local dime store. When you opened the package and looked on the back of your army men, it always said "Made in China"! Wow, I bet those were made for less than a penny by that country, you might have thought!). Well CEO's and CIO's and IT management thought they could pull that one off, and all the complex issues, huge salaries, egotistical developers, and complex project spec docs would all fall by the way-side and Information Technology in business would be handled neatly and efficiently in some little 21 year old Indian National's cubicle half a world away........hehe.......sorry, let me catch my breath again.........just too funny!
Don't worry, I'll explain in a bit, my views on all that. But, before I go on, I do have to say that outsourcing is a fact of business today and is a viable one in some form and does NOT necessarily have to involve offshoring. In fact the studies from 2005 and 2004 seems to show only 17% of all IT went to outsourcing contracts, a smaller percentage of that actually went to India or overseas; possibly only 3-5% of IT business! But it gets better, because from the newest studies, even that small percentage is failing in many cases, as many businesses are pulling out of offshoring (and outsourcing deals), and it goes to show you that you simply cannot listen to research and analysts. You also cannot listen to CEO's and CIO's and IT management.....they obviously have no CLUE what they are doing. I'll explain more about this as we go along.
Now, let me say first that YES....in the world we live in, where data-bits are traveling from one country to a another via this new medium we call the World Wide Web, anything one person does in one location on the earth should be able to be done by someone in a completely different location. I mean, a byte is a byte and software is software, right? This new business model would seem to imply that shovelling technology work to India from the United States should be possible, and with the huge differences in salary between your average American programmer and your much cheaper Indian programmer, that there should be a giant saving cost to US business.....at least it looked that way on paper. It would seem to be a very profitable venture then, moving US technology overseas, thus offshoring US business process, software design and development, call centers, and more, to these new "smart" IT people overseas. I will first say yes, I agree, and I firmly believe, the Internet and the Web are changing the face of business and giving ALL PEOPLE ALL OVER THE WORLD the opportunity to "participate " in this new world order, as some call it. In that world it would seem the next logical "brain-step" would then be to say that IT is nothing but a true commodity and easy to do, and that anyone now, with any kind of decent computer and an Internet access point, should now have the right to say, "I'm a software programmer!"....pay me to write your business services cheaply!
Well, thats turned out, with each passing day, to not quite be true...
Regardless, offshoring and especially outsourcing is here to stay. How can it go away....the you-know-what is out of the bottle! And I think its great that so many people are connected, are empowered with IT skills and selling their services. It's the way of the world. That was clearly NOT the problem. The problem was that so many US management teams have jumped on a "bandwagon" they had NO CLUE ABOUT, and got greedy and began to think about how best to exploit the Third World...as they have always done (the past 500 years!) Greedy, ignorant, short-sighted, lazy, disorganized business managers all over the world saw this opportunity, and without ANY TRAINING OR EXPERIENCE IN INFORMATION TECHNOLOGY ITSELF, said to themselves, with dollar signs in their eyes:
CIO: "Wow, all these cheap available Indians and Chinese with abilities and skills and good attitudes, and fairly good English skills can take over all the work my IT losers used to charge big bucks for then whine about! Wow, let me get my CEO in the boardroom, tell him all the money he will save, and back that up by some analysis some old men who don't know IT AT ALL have typed on a website and BOOM......we have IT working better than ever, and IM A HERO!"
...and so the last 2 years offshoring has taken off and then something happened....the results of offshoring IT from the US to other countries arrived...and the results are in!
(Ok, now first read these offshoring surveys that just came out in 2005):
>>>Diamond Cluster 2005 Survey and Study
>>>Deloitte 2005 Survey and Study
It's really really interesting to see in these surveys the clear unhappiness many companies have with offshoring to India and other countries. It is also clear that quality concerns, poor communication, mismanagement, cultural issues, distance, and poor expectations are some of the most important factors in the IT returns coming from these groups. What is interesting to me is these types of problems are EXACTLY the same problems we have with management and our customers here in the United States. Its funny, because its like the central problem of business people, CEO's and IT managers taking the time to KNOW AND LEARN technology before making decisions about technology and their technology employees is still NOT being done. Its pure laziness and inability to take the time to train and educate and manage IT in the company itself, that is the clear problem by these upper level people. In defense of India, I actually feel sorry for those guys....having to deal with the disorganization and poorly scoped projects they must be dealing with! Now lets sidestep and backtrack and discover where all this is heading with a short history lesson...then I will attack the problem and show you where all this is heading, in my opinion of course!
The Path of Technology : A Short History Lesson First
The
INFORMATION TECHNOLOGY PROFESSION IN THE UNITED STATES was reborn in the early nineties when the World Wide Web arrived and showed us all the possibilities of a new form of communication. Without a long history lesson, I will just say that the web forced the business world to rethink how it communicates, how it builds software, services, and how data is exchanged. It forced people to hire really smart and innovative minds in the US (ie Microsoft) to think about the medium and start stacking very complex and complicated technologies on top for companies to integrate into their businesses. It took brains and innovative creative very smart and high salary talent to do this. That's what is important to remember. It wasn't mass-trained, monocultural, over-immulated, pseudo-engineering societies like India has. It was select, carefully picked, rigorously challenged, business savy, technology talent and innovative people that made this country reign supreme as the technology capitol of the world. It should be said that many of these people came from all over the world, yet were trained, educated and saturated with the American mindset, building on the special creative fabric that is the rugged individualist that makes up the American spirit.
Now, from all inginuity sprang new companies building their own technologies to enhance this market, and from these businesses built services and are still evolving that today for other companies. What was once a simple technology has exploded into a world-wide, complex, layered and ever-evolving ten headed hydra of both complex standards as well as very proprietary technologies all different, and all needing smart people to integrate, troubleshoot, customize, debug, layer, extract, and innovate on. If you now count the number of groups and people and countries all over the world building and innovating new technologies based on this new medium, it gets unfathomable! My point here is simply to say, despite all the "hype" about technology automation and software replacing the technology professional, the OPPOSITE is happening...there is more newer technology requiring more and more talent in IT to master, and IT is getting more complex not less. Its requiring MORE professionals in the field...not less. Its requiring more people on all levels, from all countries all over the world to manage and maintain, not to mention innovate around. SO MORE technology people are needed....not less. Thats the evolution of IT presently!
Now back to my article and the surveys you might have read in the links above. We had a situation now where, on the one hand, companies had valued the "knowledge workers" that kept their companies IT afloat. After 2000 and the "DOT-BOMB" era it seams, companies UNDERCUT and UNDERESTIMATED what makes Information Technology GREAT and what kind of talent it takes to keep it running, much less pull off very complex and customized web and software projects, which each and every company now has to build to compete. In other words, what's been happening in the world is IT is getting more complex, and businesses have been getting more dependent on Information Technology to support their businesses, not less. With all the new software and technologies exploding onto the scene, its taking more and more TALENT and INNOVATION skills (not third world programming skills) to understand and integrate and customize the growing number of technologies and products being built, much less to KNOW them and be TRAINED on them. At the same time, businesses made the poor decision to try and put a pretty red bow on Information Technology and the complicated work Technology Professionals do in the United States, and so have gotten SHOCKED and BURNED when they saw that outsourcing these skills did not bring in either the COST SAVINGS OR THE QUALITY that US IT professionals had brought. Where is the cost savings in sending complicated and often proprietary and sensitive business processes and data to third world countries that have less skills and innovative skills than seasoned US professionals who both know their companies business needs and have the years and years of experience to address it in IT. That's what the tern "Information Professional" comes from and its different than saying, "I'm a software programmer". It's not the same. That's why businesses are clearly getting burned in offshoring and its WONDERFUL to see this finally happening!
Information Management : The Disease that Killed Information Technology in the United States
Now, I've decided to point a finger at management in IT. This IS the main point of my article, but wanted to save it till now, so you had my full perspective on the subject. It needs to be said that I am a technology professional here in the US, and have worked for a number of companies on projects in IT, built websites, built portals and management systems, and been on many project and spec doc meetings in corporate boardrooms in this country. Let me say how much I admire the IT professionals who do such fine work and who are so good at listening and fulfilling the sloppy mismanaged and poorly organized IT projects that upper level managers continue to crank out. Let me say how proud I am of the men and women who write such magnificent software in the United States, and build such beautiful designs and websites, and innovate and solve so many complicated business problems that thrown their way. That takes more skill and talent than any manager or salesman I have ever seen in this industry. And that's my point. IT management is all about making a project or idea or company look good and getting the sale. Its not about the work in this country and I have yet to meet a manager, salesman, or client who really understand the product they are selling or the problem they are solving or the code their developers build. That's shocking! You may think its not their job. I disagree. IT IS THEIR JOB! How can you SELL something you don't even UNDERSTAND! How can you implement or build specs and project plans if don't hang out with your developers, write some of their code, speak their language, or listen to their ideas and value them?
And that's why offshoring has failed on so many levels. IT projects are complicated and the rate of failure has always been high. IT management has become lazier and lazier from my experience and fewer and fewer business people even read or take seriously the volumes and volumes of issues that software programmers and engineers try and address in project proposal or spec docs. I cannot tell you how many corporate boardrooms I have been in where CEO's, managers, and sales people have no clue what the technology really does, its limitations, or even read the spec doc they paid ten grand for! It's shocking! It's all about the American way...greed, speed to market, and easy money! Making that easy money! When you do not take the time to know the macro and the micro of your projects, the limitations and the innovation possibilities, you end up farming something out to India, and its garbage in, garbage out. Why? Because you and your business people don't know IT and did not take the time and brain cells to do what your real talent does, the IT Professionals you laid off last month, have been doing under pressure. Business people are finally waking up to the fact that its the "producers", the software programmers and engineers that hold value and have the patient and wisdom and talent to keep so many details in order in a company. Management has clearly underestimated the US Technology Professional in this country, and that's slowly coming back to hurt them.
What's really funny is more and more companies now are seeing how complicated and costly it is to manage overseas IT projects. If they thought it was hard to get software developers in-house to understand their needs, see how hard that is now with layers of foreign implementation management between you and the people who innovate. And that's the other problem...when you design software, you NEVER are handed a spec and told to do it exactly as planned. There are thousands of read-between-the-lines issues that managers never see in project plans that software designers have to fill in with innovative code and ideas that address those. Bad managers simply leave that up to their teams to solve by WORKING WEEKENDS, when all that does is exhaust your talent, piss off your staff, and show once again, in broad daylight, someone mismanaged, once again, their IT project. That's why IT management SUCKS in the United States at present. I'm sure what I've described, some of it, describes your management teams. Something radical needs to shake up management in the United States. And I have the solution....
Fire your CIO's, your Information Technology Managers, and "Business Professionals" and hire your IT Professional to Run Management!
The ONLY WAY for any Information Technology project, large or small, to be successful, and the only way to reclaim innovation, communication, and sound management of IT projects and work, as well as increase innovation from enthusiastic IT professionals is to promote someone directly from that field who has done the work....and....continues to do the work. I say FIRE BUSINESS PEOPLE, and hire the Technology Software developers you laid off. Empower them to take the lead over others, allow them control over one or more arms of the IT department and business departments (including Sales and Business Solutions) and fire all the smooth talking, disorganized, golf-club wielding, manipulating business professionals from your organization. Why? Because business people know less and less about Information Technology, I've found. And the older business people and Analysts get, the less they really know how to manage much less strategize about IT in the business world. As technology becomes increasingly THE BUSINESS, and the edge, and what makes your company competitive in this new world of data we live it, it certainly will be the people who KNOW TECHNOLOGY that will be valued. I would MUCH rather walk into a corporate boardroom with a hard core software engineer who programs in the United States and solves complicated code issues and services everyday and who knows the limitations of the technology and can tell me straight up what will work, what won't, what's expensive, and blatantly what's stupid to try, than some fancy CIO or manager or CEO with some pie-in-the-sky solution, who does not respect or listen to their web designers and developers, who comes up with ideas in meetings and project plans that have no backing of substance based on any level IT experience that they or anyone in the room can correlate directly. That's the solution! Hire and pay well the IT Professional.....and 20 years from now when we are swimming with data and everything we see and hear and know comes from a database, you will see what a fantastic decision it was to move the business to Information Technology and value the IT Professionals in your corporation....not the other way around. Business people and so-called "information managers" are the disease in the system presently, and need to be removed if business is to succeed!
The United States Information Technology Professional is Valued Once Again!
So, as long as IT management and uneducated business people run and control the IT world, I predict IT business will go down. What's more, because of those people and the poor decisions they are making towards today's IT Professionals in the US, offshoring will continue to disappoint them in their business models! You cannot compare Indian programmers to United States Software Engineers and Professionals. It's like apples to oranges! And businesses are apparently, this year, starting to recognize that in their hiring practices. IT Professionals are being snatched up. (If you are not one of them then you need to retrain in the newer IT languages and tools...thats all! Otherwise, you know you have the goods!). That's why when you now go to Dice.com or Monster.com or computerjobs.com or careerbuilder.com you will see much bigger salaries for IT Professionals now, and its climbing back. You also will see lots and lots of software jobs and all kinds of work for all levels of IT work in the United States. And what does this mean.....that's right....as Bill Gates of Microsoft has warned, an
Information Technology and computer professional shortage is coming for the United States! WOW.... after all these warning about IT jobs and layoffs.... what a difference a day makes. If you are in IT, this is GREAT NEWS! Don't worry, even though many of these jobs are coming back, and they are for NEWER skills, like c#.NET and web services, you can retrain. You had the incredible smarts and innovative talents to do that.... you can do it one more time! I say one more time, because despite all the warning saying automation and offshoring to India and China is keeping salaries low and IT is doomed, I say the opposite!!! In fact, come back to my website in ten years and lets see where Information Technology is in the United States! In fact here is my prediction:
The United States will remain the "Mecca" for all information technology training, jobs and services. India and China, despite their armies, just don't have the one ingredient we have for success. Its what made America Number 1 worldwide, and will continue to make IT Professionals the most highly sought-after, highly paid workers in the world the next ten years. Forrester Research and others predict we will be replaced.... I predict EVERYTHING in the world...TV, cable, web, services, banking, business, supply chain, etc. going to IT, we will see a HUGE need for IT people in the US in all levels of business. F*ck this notion of IT being dissolved into business processes. IT WILL NEVER HAPPEN. Why? There are simply WAY too many huge and complicated technologies on the horizon that require the FULL ATTENTION of a highly trained and skilled US IT Professional. Mark my word...happy days ahead for us. And when they fully arrive, I say f*ck business.... you go ahead and ask for the HIGHEST SALARY YOU CAN GET, my friend. That will teach them to undermine complicated work that takes years of training and expertise few business people know how to leverage! The fact is, businesses have underestimated the importance of keeping skilled knowledge workers at higher salaries and valuing their expertise in keeping their companies competitive, so now will pay. Ahhhhhh... the stormy winds of change blow again, don't they! :o)
New! -
I Was Right!!! Looks Like My Technology Jobs Predictions were Correct, and the Analysts were wrong! IT Jobs in the USA are Here to Stay!!! (
Looks like Businesses will have pay BIG BUCKS for the Talent in IT Now!!!)
- Mitchell Stokely, USA
