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Technology at Work : Outsourcing Technology Overseas - Bane or Boon?
or "Does Outsourcing hurt American Workers Like You and Me? ...it is doubtful, but..."
There is a large buzz about 'outsourcing" right now, especially regarding the implications this has on the IT (Information Technology) business as well as technology workers here in the United States. Its not a cut-and-dry subject and the issues surrounding it are complex. There are those in US companies responsible for cutting costs in an increasingly competitive world having to find ways to cut the huge cost of IT in their company. But there is another side, and that involves the technology professionals here in the United States who have families to support and who's lives are being undermined by outsourcing of jobs overseas. These are also people with incredible skills and who have spent part of a lieftime learning and training in very complex and complicated technologies, and people who have developed talents and innovative ideas that are being ignored and undervalued. These same US employees, because of outsourcing, now find themselves out on the streets without money or a job, yet with skills that would put even the most experienced manager or CIO training, education, and brainpower to shame. Some janitor hauling trash is making more money than these incredibly talented and experienced IT folk. We are not talking about eggheads and geeks here. We are talking about highly trained professionals with incredible levels of experience and training across multiple disciplines and technology practices. Thats why this is all really so sad!
Despite the raging debate about whether outsourcing is really helping or hurting jobs, I seem to agree with Allen Greenspan and big business to a degree....IT jobs may not be in jeopardy in the US (in every field) because of outsourcing. It may be that in the long run, sending more menial IT jobs, like data entry and telecommunications work, overseas, is a good thing and Americans should and can retrain and should once again find a new niche (hopefully building on their current IT skills and education, which cannot be lost). Others claim it will make more jobs for US workers and use the automobile industry of the 1980's as an example of that evolution. Who knows. Its a complex issue and there are many facets to this little gem, and who will benefit and who will lose.
Hello [Outsourced] World!
To make my case here, let me say up front that I think outsourcing is not a bad thing for most IT work. Some of the work requiring less skill, like data entry or farmed out programming, is grunt work that CAN be done and SHOULD be done more cheaply. Its also work, that many Americans should not have to do or dont want to do. Those same IT people should retrain anyway, as IT will continue to grow and require more complex data engineers and IT work that these lesser skills wont be able to fill. So, its a good thing, believe me.
But for other types of IT projects, like software programming, web development, and core IT service jobs, it is a huge threat, and a big mistake for Amercican companies and businesses, and those that do move all such work overseas are losing the innovative edge, opening up themselves and the US to security issues, undermining their own business models by shifting the core of their companies innovation to foreign countries, and eventually destroying their competitive cost-saving advantage and thus themselves and all Americam businesses by allowing foeign countries to build on American inginuity. More on this as we go on, but to sum it up, they are only accellerating their own demise when foreign programmers and companies get wise and use that same code for their own countries business core, and US companies will see themselves without the creative and innovative edge they thought they had when such software is cloned and their business models are reengineered on foreign soil. Thus, they will have killed the goose that laid the golden egg. Its a matter of time, and its an evolution that very well could occur if that type of IT migration does not slow down.
Sharing and exchanging large primary software programming projects and moving the core IT product or business model overseas as a whole, or even in a large part - including all innovative engineering and programming overseas, stripping out all US creativity and innovation from the business such that just a "project management" or IT management core is left in the US, while all software programming is shipped overseas - sounds good on paper, but as the business grows and success is found (if its ever really found on a creative level with foreign programming) will eventually kill US computer jobs, US competitive edge, and any business that evolves its success on that model. Thats my point. And thats not good, no matter how you slice and dice it, folks.
Hello Internet!
Lets go back though and start at the beginning. For starters, the Internet has ushered in a whole new work of "connectiveness". Its now possible for a educated or even uneducated but poor person in Russia or India or China to get their hands on a Microsoft manual or training program and learn Windows Application Development, or just simply go online and train in any technology they want for that matter, and within some period of time, be able to do some of the things American workers have been doing for years based on expensive classes, or years of schooling. Does that mean such skills are comparable, maybe (more later). Then there is open-source code, and all the opportunities it offers. I won't get into specifics of what people overseas are learning or doing. My opinion is simply that IT is the great leveler it seems, in some ways, and offering up opportunities via the internet to both learning and now work to people all over the world which they never would have had. The ability, today, to communicate and transfer data all over the world instantly in many forms means that time and space no longer matter in the need to have warm bodies to manage in terms of software development or project work or collaboration or telecommunication work, or engineering projects, or web design even. Intelligence seems to be the new commodity world-wide, and can be bought and sold (and bid on), like anything else, now. This does bode good things and is a "boon" to the avergae business trying to ramp up its technology arm to compete in the world's marketplace. This is pretty radical, this cost savings, as the same US workers are often as much as ten times the cost of say, a worker in the Ukraine, or India. Is that changing, yes, and thats a whole other article. It seems that the rate of inflation and also wages are steadily rising in places like India, as India's standard of living itself is improving. This certainly will cause wages to rise and the nice cost-saving edge that US companies having using Indian technologists will wane, I believe. But, overall, and I say, sadly, the way of IT and the Internet that supports the immediate and cheap exchange of data and communication will keep IT a competitive labor market for many years to come. Sad for US workers (and eventually Indians as well, someday possibly). Its kinda like Napster in the beginning....how can you stop free music? But big business all over the world will benefit. No doubt about that. Thanks to the Internet!
Let me say right off, and say that Outsourcing as a whole, is a good thing, and good for US businesses, good for the US economy, good for foreign workers, and to a degree, good for the US Information Technology worker and the evolution of technology jobs in the United States! Why? Simply because it reducing costs and as technology continues to evolve and deepen in its diversity of jobs required, there will be more and more work US workers simply dont want to do! Thats right! There will be lots more work to come and lots that US Workers will not need to do, and which should be shipped overseas.
Data is everywhere and there will be more and more jobs for people who can manipluate it, on all levels! All programming work, if you think about it, is about creating 1's and 0's and that magic combination is what people are buying and thats not something the US or any country and really control as a product. What it comes down to really is the IT worker or programmer in this case and what he is selling as far as his skill in delivering good combinations of 1' and 0's! I personally dont see the problem with a US company finding cheaper prgrammers in a general since then, and cheaper labor and taking advantage of this type of product done cheaply. Again, I say in general, but there is a problem and most US companies are not carefully considering the problems to come by basing their model on cost savings. They are simply undermining the core of their business and the innovation that supports it, which only US IT workers can safeguard.
Nevertheless many companies are quickly realizing some open gateways to increased profitibility in the IT world of today. That certainly includes taking advantage of the value of the US dollar overseas as well as reduced raw labor costs using these IT workers. In the end, this spells for more jobs overseas and less jobs here in the US. The simple fact is, companies want to save money, US workers want to get paid more for their skills and have job security, and workers (poor) want to work and just earn a living in most cases. Yes, US IT workers seem to be the man-in-the-middle, don't they? But lets outline the facts as I see them first...
- You cannot stop "progress" in terms of business. And that translates to the fact the big business in the US and anywhere really, will do whatever it takes to stay alive, compete, and make more money, period! Regulations, trade tariffs, etc. notwithstanding.
- Outsourcing means more money for companies and more money for the poor overseas. Its a match made almost in heaven, and its here to stay in some form! Workers overseas have some skills that are cheaper than US IT worker, and thats the sad fact. There is more to that fact though than meets the eye.
- Lastly, US IT MUST survive somehow and US workers must make a good living in IT and continue to do so, if the US economy and US advantage in IT worldwide is to survive, period! It must survive just like high salaries for doctors must survive in some form to attract the "medical elite" and the raw talent in the medical field that keeps us advancing in our knowledge and solving life threatening issues, not to mention quality of work done by talented individuals. Take that way and whats left. The same applies to technology workers in the US. To even survive, US companies themselves must keep and pay more talented US technology people to "keep" their core business intact from foreign businesses (their evental competitors) and draw the young college kids into this field and build the next Microsoft or Apple that keeps US workers and the US as a whole on top of the world. How critical is that? Its like saying, "lets sell our space program or the private space and military industries to China or Russia. How much advanatge would we have if we did that or moved all innovation in those industries to India or Russia?....hmmmmmm.....
Well, seems like the first two in my list are obvious, but the last point seems to be in conflict, huh? Guess what, it seems to be but not quite. Why? Becuase guess what folks, all GREAT INNOVATIVE TECHNOLOGY IS STILL MADE HERE IN THE US currently! That's right! Most of what is used overseas to build the IT that companies use and foeign programmers learn to sell cheaply to US companies, is still built and created and based on innovative ideas originating here. What does that have to do with US IT workers? Is has to do with the fact that the United States may lead the world in outsourced IT but we also lead the world in IT innovation done by programmers here in the US. Is that innovation itself outsourced? Maybe, in some form. But most of the idea originate here! When I say "originate" Im not talking about some visionary CEO or Project Manager....its easy to think up idea and sell them. Im talking about the guys that BUILD the stuff! Im talking about the army of programmers and developers under Microsoft that work to conceive, develop, test, fine-tune, and implement the software and operating system we all use today! Any group of senior level managers can think up good ideas....but creativity is about CREATING, folks! Any company thinks their competitive edge will last by hiring creative managers and farming the implementation overseas is very short-sited and on teh rode to self-destruction, I'm certain!
Great Works
Its a very fuzzy and difficult concept Im trying to apply here, for some people. I guess what Im saying is that invention and originality is the greatest talent American workers still have over the rest of the world, and its something companies in the US cant get enough of, yet are killing by moving certain types of IT, like core C++, web development, and Java development overseas. Thats not to say someone overseas isn't capable of taking an idea and building something new, or great, or creating a new technology. But the fact is, that innovative ideas, software, operating systems, standards, web designs, marketing, service models, and even hardware seem to originate in some form from the US in part because smart companies here have paid well some core talent of programmers and innovators to build the "great works" we need and use and which gives the US our competitive advantage in IT. That doesnt mean ALL IT thats innovative comes from here. Just that the majority of it does (i.e. Microsoft, Apple, Dell, HP, Adobe, Intel, etc.) Why? Because the business model that has protected, nurtured and harnessed true talent in IT, especially the builders who create the software and programming the US is built on, have recognized that fact in the past and have been nurturing the very thing that is the lifeblood of the US business in tha past! Today, thats changing and I believe will correct itself back, through its own demise. True, by outsourcing some of that, its possible to save money. But, by outsourcing the core talent and the core business model and product the company thrives on, one is saying, "Hey, what I create and resell is not important and quality doesnt matter and we dont care if foreign workers take our code and create their own company. What we stand behind in our business ANYONE can build and do it cheaply!" Is that any company you want to work for? Is your comapny based on that premise? Can any company like that ever become a Microsoft, or an Apple or even be a great company? Can any company afford to fire its innovators and hire foreign-born people to replace that? Think about that...
No, I am not being delusional about the raw facts of what is occuring in IT and outsourcing. Many jobs are leaving here and many more IT jobs are about to leave simply because some of the same software development can be done for one fourth the price (or less) overseas, regardless of debates on quality, securty or innovation arguments. Any many companies are doing that anyway! Im in IT and a programmer so this affects me as well. But the big picture to me tells me that those jobs that are leaving are not all about a complete and total migration of everything overseas. And if they are, I say, let the "chips fall where they may". In other words, US companies will pay the price for undermining US workers and themselves eventaully by doing so. So, US IT wokers should not worry.
The innovation and ideas, most of them, that start new businesses and software that goes beyond solving immediate solutions, and solves bigger issues will remain here. If the whole IT world, including its innovative minds was to move to India, then I would begin to say, "then go ahead and move the space program, national security, and the White House there too!". Why not move all business overseas in every form. Certainly people in all fields can find cheaper labor in India and Russia, right? If what someone overseas is doing is the same as what is done here, then sure, go ahead and move all US work overseas. Think about it. If all facets of business were moved overseas but a handful of CEO's and project managers, I would ask....what are these managers selling then? What does their business create, or what are they creating thats original I cannot buy in India from an Indian company with the same business model? Sorry, but desite what Big Business will tell you, just because you are in managemnet does not mean you know ANYTHING about SOFTWARE, or how it is built or designed, period! What Im saying is, if we strip every facet of our companies down to outsourced management or project designer shells, all thats left is a core group of managers and quality control technicians and the innovation is completely lost to those companies, and thus the business is gutted! Sorry folks, that, as a whole, may happen but I suspect will not. Why? Because the money is in the creative talent, and that includes US programmers and software innovators here at home, who have been cultivated by the society, the culture, the training, the experinece, the creative and free mindset, the college systems, and the experiences. Again, if you can prove me wrong, then ask yourself why the United States virtually leads the world in technology, in space exploration, in military technology, etc.? Is that a commodity we can afford to lose? Technology jobs are right up there with those same engineers....dont think they are not! So, can any company in the US afford to ever move all software and web development and systems development overseas? Think about it!
If all Im running is a shell that sells what a group of young guys build cheaply in Russia, at some point the guys in Russia wont need me anymore and start their own company and hire a manager and do their own innovation and managing and sell to the US. My business may do well with the outsources model, but at some point I will need to figure out what Im sending overseas to create. Am I sending an idea I came up with that they program for me and I resell, or am I reselling something their people innovated? What is my business model truly built on in either scenario? Think about it....do I want my business based on innovation someone overseas built and thought up? How secure does that make your business feel, when that same group could take that code and clone it themselves and start their own foreign company that could compete with you! And the other option, would any company who think's they can innovate ideas then really control that process by blueprinting that to engineers overseas? Is that really innovating? Do we all believe that those two concepts can be separated?
If your company is completely built on someone elses work and innovation, then your company is just a reseller that can be easily replaced. So, American companies have begun to realize that outsourcing does not solve the INNOVATIOn arm of IT, and if it did (where you are reselling innovation from someone overseas) then their corporate model soon disappears in the US, and what is left is not a company based on new products or services, but really a company that now is lowered to that of a middleman who resells work from foreign companies. There is a difference. What this ends up saying is that SOME FORM OF OUTSOURCING in IT WORKS AND SOME DO NOT AND IS AN OPEN THREAT TO THE IDENTITY OF US COMPANIES THEMSELVES! Would Bill Gates be willing to clean house of all his engineers and move Redmond to India and start a fresh company there? Doubtful and I bet he would give you a reason. Why? I bet because he has based his comapnies concepts, software, and ideas on the creative thinking and innovation of people in the United States, managers, programmers, and even some people from overseas that live in the framework of American Culture, because they represent the things that make Microsoft innovative and creative in the World. Move all that, and let foreigners do your innovation and Microsoft is no longer Microsoft, the company we all respect, love and love to hate. Again, think about what Im saying....Im talking not just about the programming nor am I talking about a project manager calling a programmer in India or Russia about a project. Im talking about moving the "team" of people who together both conceive, engineer, blueprint, build, test and implement, as a whole, overseas. When that happens, then all thats left is a CEO and senior manager in a nice comfy office drawing a check. The creativity is gone. Only ownership is left! Im NOT saying that some smaller or lesser programming jobs cannot be successfully "innovated" here in the US by talented and well-paid enginners and programmers, who farm out smaller pieces to engineers in foriegn lands. That is successfully done today. But, not recognizing the crucial element of US innovative programming talent that is required to "create" the idea first and initial software here and retain the core ideas and software code means the eventual death of the identity of that US company as a whole and US companies in general. This could certainly be the case if India or Russian engineers figure out they can take what they built and learned from us and do it even cheaper! Suddenly your US company is undermined completely and this gets into serious US security issues surrounding exchange of technology built and coneceived for US companies here butrebuilt and repackaged and resold illegally to US consumers. We said IT is a commodity on the Internet, right? Well, why aren't IT companies also a commodity for developing and selling it? Not good, but an interesting idea, nonetheless! (I told you it was a complex issue, huh?)
I know, it may not still be clear, this concept Im proposing because Im sure you can identify a company that is outsourcing all aspects of IT overseas and making money and who's future looks bright. But I still ask you......what is that company based on? Is that company comfortable with its future based on overseas work and innovation? If that company sees huge success, is it comfortable basing its business model on overseas work completely? Does any company out there believe it can run a "shell" company as I call it, based on managers and project leaders with little or not initial programming experience conceiving and building "idea" only that are farmed out to foreign programmers to build? Does any one believe that inovation can be divided in two where idea are about innovation and programming is just about implementation? As a hard core and experienced programmer and designer, I know Ive never ever built a single line of code that did not have special meaning in making my programs run better than and beyond what they were meant to do. I never even met a manager that ever fully undertood what was built, or what the possibilities were in the innovations developers created behind the scenes. I also never built web applications whose code I did not use later in other applications. lastly, Ive never seen a programmer ever build or innovate based on someone elses instructions. As projects "evolve", its often the prgrammer, CEO, managers, and designers together who do the innovation and often the developer who brings to light nmew concepts and creative code that can turn what one manager thought was the original idea, into something grande and beautiful that eventually becoms the lifeblood commodity thats resold as a service to future customers.
Identity Theft in Outsourcing
The identity of any single company goes beyond what one group of project managers or enlightened administrative or managerial people can dream up. That also applies to the "crippled and faceless" exchange that must occur with outsourced software programmers and project leads doing core innovative exercises for US led company software initiatives. That identity has to exist inside the borders of the US at some point and in some core piece of software or innovative data "recipe" closely guarded by the US company on US soil. If that identity was based on any truly innovative ideas or work, it would and SHOULD BE AN OPEN THREAT TO THE FUTURE OF THAT COMPANY if it was compeltely built on outsourced work. The minute a company bases its innovation on an overseas solution, especially one thats truly creative and tied to the core identity of the company, its days are either numbered (as it realizes its codebase and solution is accessible to anyone now), or better, it decides to retain that source or work, and hire US workers to build on that innovation and keep its core business product close at hand from competitors. If it does the latter, which it certainly must do to survive, then will US workers have to review and train on the code mess created by foreign develoeprs? And I say, in the end, what's the cost savings then, in forcing US workers to evaluate on code that they could have built here in the US, and possibly better? Is there ever a savings in training any developer anywhere in the world to work on software thats built by someone else? Think about that and the eventual need for successful companies building a business on outsourced code done by foreign workers. Ive experienced some code rewrites and the huge down-time required to completely overhaul sloppy work done by a fellow programmer, and its never cheap and never efficient. Often, one has to throw out the baby with the bath water and start from scratch and reprogramm (and innovate) the product from scratch. (Matter of fact, the company Im working for in the US is having to do just that! Show me the cost savings to the poor US company that has to pay twice to get the code done the right way!)
What this says is its possible to outsource, sure, on some level, some programming using a carefully constructed model based on initial US IT work. And it eventually will and should be possible for US companies to do that without a threat to the security of their own company's future survival and future grow by safeguarding innovative work done by innovative US IT people. Any company that sees huge success with software built by developers overseas will and should eventually feel the fear that someday, and someday soon, possibly, that foreign group could see the value in replicating or cloning both the code and the (creative) concept on foreign soil and coming full steam to compete against the business that hired them to build it in the first place...non-disclosure agreements or not! And even if that is not the case, at some point US companies will suffer the innovative loss of not working with US IT workers and the local talent needed to build superior software on US soil, and at the same time safeguarding quality software products that are the core of that business's security and survival.
Innovation Will Always Exist with the US Technology Worker
And thats why innovative creative people here will always be valuable and IT progarmmers and workers will always be needed. And why I think Outsourcing is a BOON for those companies that understand the limits in using outsourced programming work, but a BANE if they do not, and thus fail to value and reward the core innovative technology teams that make up the lifeblood of the US technology employee. Its not about doing things cheaper at some point. Its about protecting the company, its software code-base, about recognizing the special and valued talent of US lead development teams, and a healthy balance of outsourced work that does not shift the innovative arm to project managers and foreign programmers. The core of any company, and especially its creative and innovative arm, will always be needing the "US Information Technology Elite" (i.e the talent) to keep it secure and flowing and growing here in the US, especially if what was built sees wide success. Any company that also does not see the value in both recognizing and keeping talented US IT programmers and designers close at hand, who are also paid well to build, design, and manage the core business solutions (some or parts of which can be shipped overseas as managed assets to the whole) that other foreign workers may build upon, will quickly either die or risk losing their competitive edge, as the monstrous outsourced commodity they "exploited" for cost-savings and advantage today, matures and cuts the umbilical cord from the mother US company becomes a full grown foreign competitor. In other words, any company failing to see value in US Information Technology workers will remain a shell or wholesaler of foreign born IT. Those same countries themselves may "wake-up" and realize they can replicate those innovative American-born ideas cheaper in their countries. The commodity of Information Technology that US companies created when exporting all programming to talent overseas will itself "raise its ugly head" and turn their own protected business models into a commodity that anyone anywhere in the world can immulate. IT and data is a commodity, remember?
And, I have one last question for US companies considering wholesale outsourcing of its programming and innovative workforce to foreign workers: What makes any US company special that can dream up the ideas if all its really creating in the US is ideas? Certainly if a programmer in India or China is smart enough to build your software at $10/hour they certainly can dream up the silly little business model and concept behind it and do that themselves. Maybe you will find yoruself marketing software from India and then you and I are now the contractors, right! The more you outsource your business the more you run the risk of your business itself being outsourced!
Whats the old saying....ahh yes, "to live by the sword is to die by the sword"!
So, I say outsourcing is ok, and will continue, as long as wise US companies know, like anything else in business, there needs to be a boundary and a limit to the benefit of outsourcing and it begins at understanding innovation at home innovation and valued local US technology talent at home. But, as far as any laws from Congress that affect that stance, Im not too concerned about, as the process, I believe, seems to have its own "checks and balances" as far as "how far" outsourcing will affect technolgy workers, like you and I, and the depth at which US companeis will take it. Some outsourcing is necessary, and some is detrimental. But that is out of our control its up to corporate America to learn that lesson. So let the system work itself out, and let the chips fall where they may, folks!
- Mitchell Stokely, USA
