CXO

Top 5 signs you're about to be outsourced

A request to compare IT costs to company revenue can indicate your company is considering outsourcing IT. Find out the other four signs so you don't get caught unemployed.


You read about it every day—another corporate giant announces it's outsourcing its entire support division, or sending its IT service department overseas. You know it's a career reality that no IT professional can lightly ignore given the continuing trend.

Gartner Inc. estimates that the current percentage of IT jobs outsourced will grow fivefold by 2010—from 5 percent in 2004 to 25 percent within six years. Forrester Research's predictions are even more foreboding. The current 100,000 jobs being lost to outsourcing will hit 1.6 million by 2010, according to the research firm.

No matter what the future tally, IT professionals have to make sure outsourcing doesn't catch them by surprise. Like any other professional, you don't want to first learn the news when the boss calls a meeting because that won't give you much time to react in terms of staying employed, whether at the same company or in a new job.

In an outsourcing tide, the key to survival is to be prepared and to know that it's coming long before CIOs begin handing out pink slips.

Preparation requires understanding the top signs that an enterprise is considering outsourcing an IT function. As TechRepublic members and a corporate leader explain, the earlier you notice that outsourcing is an issue on the management table, the sooner you can begin work to change the course of action. Advanced warning also lets you drum up potential employment options if you fail to convince company leadership it isn't the right direction to take.

To determine the top five signs that an IT role is in jeopardy of being outsourced, we reached out to members and professionals who've seen the trend come into play within their own enterprises and with clients.

Sign 1: Closer scrutiny of the IT budget
As one TechRepublic member explained, his first indication that his job was on the line was that corporate leadership was taking a very close look at IT costs and labor—even calculating what IT cost per employee and the number of help desk/desktop techs per staff member.

"If you're asked to fully document your processes, it could very well be a prelude to outsourcing," he wrote.

Sign 2: Attempts to pare down the IT portfolio
If decisions start to be made about what IT is responsible for, it's another clear sign that things are changing. For example, removing management of corporate cell phones, pagers, and other technologies indicates that there will be a shift in who'll be responsible for those tasks.

Sign 3: A request to document the network or job tasks
It may seem innocuous at first if the CIO or CFO asks for business documentation, because it could be viewed as doing business as normal. But as one member discovered, it also could be the initial step to an outsourcing effort.

"The higher priority the documentation task, the more likely the company is planning to outsource," said Chas, a longtime TechRepublic member.

Sign 4: You're doing a great job, but the bottom line is falling
As one company leader explains, outsourcing is typically a financial decision. When the case is grounded in economics, it can be more difficult for IT professionals to argue against it.

"You could be doing everything right, you could have great tech skills, be a strong performer, keep up with your education. However, if your company decides to outsource your function, entire teams and entire departments get replaced. I'm not sure that you can do much about it, other than try to get out of jobs that seem to be on the outsourcing trend," said Tom Mochal, president of TenStep Inc.

Sign 5: Everything is now being measured
A sure sign that something may be changing is if the IT department is suddenly asked to measure the cost of IT versus the total company revenue. As one member points out, while measurement in itself is a good practice to do, if it hasn't been done before and is suddenly initiated, outsourcing could be the impetus.

"Many of these things are worth doing in their own right to better manage an internal IS department, and ironically, if everyone did them the need for outsourcing would be less," wrote the member. He added that successful outsourcing itself hinges on proper data gathering. "The golden rule is that you should not outsource something that is poorly defined and poorly documented or you leave yourself open to being taken for a ride."

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