|
|
David Berlind's Reality Check
Invariably, when I write an outsourcing story like the one about United Nations Development Progamme CIO Norman "Sandy" Sanders who turned over his global PeopleSoft deployment to an IT services outfit, I get two kinds of letters. The first kind comes from IT professionals who are on the outsourcing bubble. Their companies are in the throes of outsourcing some or all of their IT, and they're wondering what they can do to preserve their careers. The second group of letters comes from readers who accuse me of joining the conspiracy to move jobs --- ones that belong to hard-working Americans --- to India, Russia, Singapore or some other place where there are throngs of IT professionals willing to work for a fraction of the wages that their typical American counterparts get domestically. To the second group, I say welcome to the global economy. If you want a sympathetic ear, you've got one in me. That said, you can choose to ignore reality, or you figure out what to do about it. The United States wanted a democratized world full of industrialized nations. Now it has one, and if American companies are expected win against foreign competitors in a global economy, they can't be expected to maintain a significantly higher cost base with a minimally appreciable difference, if any, in quality of goods or services. In the same way that it's more profitable to manufacture clothes, semiconductors, electronics, and other heavily commoditized items overseas, it was only a matter of time before the standardization and ensuing commoditization of IT services was hit by the same wave. In a recent interview with my colleague Dan Farber and me, Intel CEO Craig Barrett characterized the desire on behalf of international engineers to get a piece of the action saying "the rest of the world [which has been schooled by the same University system as domestic engineers] is hungry." According to Corio worldwide markets executive vice president John Ottman, "the laws of competition drive this sort of activity." Ottoman says a little over 20 percent of Corio's workforce (recently ranked 90th in Deloitte Touche Tohmatsu's Fast 500 index of the fastest growing companies), will be located in Bangalore, India by the end of 2003. Addressing criticisms about potential quality problems when going offshore, Ottman says "It would be a mistake to assume that offshore help is not capable of very, very high quality work. For certain tasks, offshore delivery can qualitatively meet or beat the quality you get domestically, and it's cheaper. For example, in the case of a client like the United Nations Development Programme (UNDP), it's significantly cheaper to have a PeopleSoft report written in India than it is in the U.S. It's about $20 per hour there vs. $85 here, and the quality is the same." The bottom line is that, for IT pros on the bubble --- ones who, because of an outsourcing project, are facing transfer to an IT services outfit like IBM Global Services or EDS or worse, are facing job elimination --- bad mouthing the trend, or sending e-mail to journalists who write about it won't make life any easier. So what can you do? If you're like my college roommate (whose name will be omitted for reasons you'll understand in a moment), you might be thinking of punting. It's been over two decades since we graduated with degrees in computer science. Whereas I turned down the journalism path after eight years in IT, he stayed the course working his way up from programmer into the IT management ranks. Now, more than 20 years into his career, he knows he's on the bubble and he's not exactly certain what his next move is. Right now, he's working closely with IBM Global Services to help his company make the transition from insourcing to outsourcing. Eventually, he expects to be given one of two choices (provided he plays by the rules): Get laid off or join IBM Global Services. "If I get laid off, the severance will be very good," my former roommate told me. For him, the stars aligned themselves in a way that doesn't always happen for people in danger of losing their jobs. "My house is pretty much paid for, I have no debt, and through some sheer dumb luck, I'm pretty much set financially. But I will need some income." Working for IBM GS doesn't appeal to him, though. "When I see these guys in here everyday, it makes me realize that I don't want to spend 50 weeks a year on the road working for an IT services firm. Given my druthers, I'd like to return to my roots as a programmer, where no management is involved. Perhaps doing some contract work on a schedule that suits me. IT security is another area that I wouldn't mind getting into. That seems like the sort of thing that companies keep close to the vest , and the problems aren't going away anytime soon. But I'm not too worried. If I can't find anything, I'll sell stuff on eBay and start a digital photography business." But for those who don't want or can't afford to punt, plenty of domestic opportunities remain for IT pros looking to leverage their skill sets. On the client side, outsourcing doesn't magically just happen. It still takes people who understand IT, who know how to articulate needs, who can determine performance metrics, and who can craft and monitor service level agreements (usually with the help of an attorney or general counsel's office). In light of the fact that he's outsourcing a substantial portion of his global IT, I asked the UNDP's Sanders what he thought of the situation. "Clearly, no matter how much outsourcing happens or how offshoring goes, corporate IT isn't something you can just pitch over the wall and think it's going to be OK," said Sanders "IT services organizations have to be managed. They're not a silver bullet or panacea and they certainly don't manage themselves. One thing that we'll never pitch overseas is security. So, to the extent that keeping security arrangements close to home is a priority, that will require some in-house expertise." "In terms of helping to manage service providers," advises Sanders, "computer science students and IT professionals are well advised to acquire or maintain skills in programming languages, but also foreign languages-- in particular Arabic, Japanese, Russian, and French. You can get technical skills. But finding people who can work on the business requirements, people who can keep a finger on the pulse of the contract and make tech dance to a certain tune when it's outsourced and offshore organizations are involved, that's the sort of help CIOs will need." On the provider side, where Corio's Ottman spends his time, he made it clear that while some tasks for his clients can be sent offshore, others cannot. "We have some people in the U.S. and India dong the same thing simply because we want the clock covered 24/7," says Ottman. "But certain tasks lend themselves better to offshoring than others. If it's very manual-intensive, like writing PeopleSoft reports, that lends itself to an offshore environment. But for first line call support or break-fixes, that requires a U.S.-based resource." Additionally, as the amount of offshore outsourcing with U.S.-based clients goes up, so too will the number of local account managers who must be physically present when answering to certain needs of their clients. Here, a combination of communications, sales, and technical skills will come in very handy. IT services companies like Corio, IBM Global Services, EDS, and Centerbeam aren't the only type of organization to which IT can be outsourced. There are also several providers of multi-tenant applications --- better known as application service providers (ASPs) --- that survived the dot bomb explosion. One of them that continues to grow quarter after quarter is Bozeman, Mont.-based RightNow Technologies. On a routine basis, CEO Greg Gianforte contacts me with a list of jobs he needs to fill and asks me if I know any potential candidates. So, on behalf of IT people looking to re-plot their careers in the face of the outsourcing trend, I asked Gianforte if an ASP is a good place to park their technical skill set and what sort of jobs are the high-growth areas at ASPs? "Most of the technical jobs are in product development (programming), quality assurance, professional services and customer service," says Gianforte. "Our open positions are listed on www.ILoveItHere.com, which is our recruiting web site. We have hired about 30 people in the past 90 days and have about 27 more positions open now." Gianforte also pinpointed the slow- or no-growth areas. According to him, "The jobs that are not plentiful at ASPs are system administration positions. Although this sounds counter intuitive, you have to understand that true multi-tenant systems really minimize infrastructure and associated staff. For example, even though we are running sites for over 1,000 companies like Medicare, Motorola, Black and Decker and British Airways, we operate all these implementations with only 10 full-time people. My suggestion for IT professionals is to look towards client-facing services like project administration, consulting, training, or product development jobs like programming and quality assurance." One thing is certain: The IT landscape is changing. When my roommate and I would tell people that we were studying computer science, the response would invariably be, "Oh, computers. That's the place to be." Not anymore. Says my old roommate, "if some kid going into college said he was considering a degree in computer science, I think I'd tell him that's a bad idea." The UNDP's Sanders is equally bewildered by the current situation. "If you're just getting started in computer engineering, you probably couldn't have picked a better place to dig yourself a hole." Fortunately, for those about to go into school, there are some other choices. But for those with 20 years or more of tenure and for whose stars aren't quite so nicely aligned as my former roommate's are, now is a good time to survey the landscape and plot a course toward job security or punt.
You can write to me at david.berlind@cnet.com. If you're looking for my commentaries on other IT topics, check the archives.
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|