In an interesting twist, American CFOs appear to favor American outsourcers over foreign firms. The lay person may expect offshoring to become more prolific during a time of economic contraction – after all offshoring is cheaper, right? Perhaps not. Surveys have indicated that the cost savings offshore are not as large as advertised, and that large numbers of projects have failed because of communication issues and other challenges faced in offshore projects.
According to an InformationWeek article released today on the BDO Seidman 2009 Technology Outlook Survey of 100 CFOs, "62% of CFOs at leading American technology companies outsource services or manufacturing" with 22% planning to leverage American companies, 16% in China, and 14% in India. Because the survey includes manufacturing, the results appear to hide the fact that India is the favorite IT offshoring destination. Manufacturing is the most common function outsourced, followed by IT services. Based on the millions of American jobs lost in manufacturing, this is clearly an issue that American IT workers need to be thinking about.
One interesting statistic is that "Forty-two percent of CFOs said their international operations are based outside the United States, down from 79% last year." I simply don't believe that there was nearly a 50% shift relocation of international operations back to the US (I doubt the accuracy of these statistics – too good to be true), however there must have been a substantial shift. So what is changing the balance? Here is what the CFOs reported in the survey:
The problem I see is this: recessions go away, fraud is soon forgotten, terrorism is a plague that can impact any nation, and the cost of shipping can be fixed (I don't get that one, considering the relatively low cost of oil). What we as American IT workers need to NOW be doing is proving to our clients (internal or external) why we are the better choice.
That means that we need to be serious about our profession; we must compete globally if we are to survive and he who thinks that Indian IT professionals aren't going to fight us for every last contract is foolish. Does that mean slashing our billing rates and competing on price? I don't think so. I think it means delivering the most value. Knowledge is what determines our value so we have got to out-do our competitors when it comes to learning the skills and technologies that best serve our clients. How do you do that?
For a start, participate in learning/networking events that IT community leaders have organized. Make sure you finish your college degree if you haven't, get certifications, and distinguish yourself from the rest. We can't compete on cost alone when it comes to India and China so there is no point trying. We need to transition our American IT workforce from being commoditized services to more of a profession. The best lawyer isn't the one who chases the most ambulances – it is the one who wins the high-profile cases. The best heart surgeon isn't the one who swaps out the most hearts; it is the one who saves the most lives. And to continue that logic, the best developer isn't the one who writes the most lines of code, it is the one who produces the most value for the company (through savings or profits).
If you are a "nine to five-er" – meaning you believe that learning and advancing your IT career ends at five o'clock sharp, you are going to soon find the technology world leaving your obsolete skills in the dust. If you really want to prove those people who say "American IT skills are in decline" wrong, show up at user group meetings, codecamps, and training events. If you live near Central Florida, join me the third Wednesday of the month at 6:30 pm sharp for our monthly Lakeland User Group Meeting (www.lakelandug.net).