Data Centers

The changing face of IT: Five trends to watch

IT is changing as fast as an profession on the planet and IT pros need to keep up with the trends. Here are five big developments to keep your eye on.

At our TechRepublic Live 2010 event earlier this month, I gave a presentation called "The Changing Face of IT" in which I outlined five key trends that are changing the way IT is delivered, administered, and staffed. Here's a summary of that presentation.

1. The consumerization of IT

We have been discussing the consumerization of IT on TechRepublic since 2007 when The Wall Street Journal published tips to help business professionals circumvent their IT departments. Back then, it was primarily an annoyance involving a few power users who were bringing their own Palm Treos into the enterprise and using a some unauthorized Web tools to get their work done.

Since then, consumerization has developed into a full-blown trend that nearly every organization -- except for the ones with the tightest security or the most centralized IT departments -- have to deal with. Workers are bringing their own laptops and smartphones into the office and connecting them to corporate systems. More people than ever are telecommuting or working from home for a day or two a week. And, the number of Web-based tools has increased dramatically, including many that have become favorites of business users, such as Evernote, Dropbox, and Google Docs.

This puts the onus on IT to craft pragmatic and effective computing policies and to help users understand which tools are safe to use and for which kinds of activities.

2. The borderless network

The old security model was for IT to build a big moat around the corporate network and only let trusted, authorized employees come across the well-guarded drawbridge and into the proverbial castle. However, that model has broken down as companies have had to make more and more exceptions -- for example, VPN users working from home, smartphone users on the go, and extranet users via company partnerships.

As a result, today's IT security model is more about risk management than network protection. Companies have to identify their most important data and then make sure it's protected no matter who's accessing it and from wherever and whatever device they're accessing it from.

3. The cloudy data center

One of the most expensive and cumbersome aspects of the company headquarters -- and even some large regional offices -- can be the data center. It can make it difficult to reconfigure buildings because you always have to worry about the data center ramifications, which can be extremely costly and limiting.

That's why some companies are looking to break the cycle and either consolidate and minimize their own internal data centers or outsource the data centers themselves. Some are doing it by going with more cloud computing applications like Salesforce.com. Some of renting server capacity from vendors such as Amazon AWS and Rackspace. Others are going the more traditional route and simply renting data center space from third party data centers that have already solved problems like power, cooling, and telecom redundancy.

Vendors such as EMC and Microsoft see this happening and they want to be part of the mix as well, so they are encouraging companies to virtualize all of their servers and create a "private cloud" that has the flexibility of a cloud solution and the privacy and security of a homegrown server solution.

4. The state of outsourcing

Every time you mention the word "outsourcing" among IT professionals (especially in the U.S.) there's a predictable knee-jerk reaction. In most cases, they are associating outsourcing with "off-shoring," the practice of moving entry-level help desk and programming jobs to foreign countries (usually in Southeast Asia) where the labor costs are much cheaper.

However, outsourcing is a much larger trend, and off-shoring is just one part of it. Outsourcing is thriving in many different forms, and it's reasonable to expect that it will accelerate. Big companies such as IBM, HP, and Verizon Business are offering to take over many of the maintenance functions for IT departments. In many cases, they'll even keep IT pros on staff and on-premises but those IT pros will now get their paycheck from the vendor. The big benefit here is 24/7 monitoring since these large vendors have engineers in their sophisticated NOCs at all times, plus they have specialists who can solve more difficult problems when the need arises.

When companies move their maintenance portions of the IT department to outsourcers, that leaves business analysts and project managers as the primary job roles left for the internal IT department.

5. The mobilization paradigm

The computer revolution has put a PC on virtually every desk in the business world and in lots of other places where people work, from the sales counter to the warehouse to the patient exam room. While PCs still make sense on the desks of knowledge workers, for all of these other workers who regularly move around as part of their daily job, the stationary PC often changes the natural flow of their routine because they have to stop at a system to enter data or complete a task. That's about to change.

Mobile computers in the form of smartphones and touchscreen tablets (like the iPad) have taken a big leap forward in the past four years. They are instant-on, easy to learn because of the touchscreen, and they have a whole new ecosystem of applications designed for the touch experience. In the years ahead, we're going to see more and more development done on these mobile platforms, which will untether workers from their stationary PCs and allow them to interact with people and products in much more natural ways.

About

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the upcoming book, Follow the Geeks (bit.ly/ftgeeks).

91 comments
careid69
careid69

With the disappearing of the middle class who is going to be the client of these new computer systems?

Papewaio
Papewaio

I think you will find that not only is managed services outsourced but also professional services (the IT designers, deployers and Business Analysts and Project Managers). The first step is the helpdesk going local. Then a couple of higher up positions go to the outsourcer. Since they have the helpdesk the outsourcer will acquire the supervisor, manager, support staff for them as well. The outsourcer gets tier one then tier two then tier three. If the outsourcer has all the IP, guess who is running the complex MAC's/mini projects. The outsourcer. So there professional services come in. Or more accuratly the internal BAs and project coordinators get outsourced and then do the next tier (IT designers, deployers and architects & project managers). Also for a new employee who is he going to be able to join? The outsourcer or the inhouse? Can't go inhouse if there are no internal entry level jobs. And an outsourcer is more attractive as they tend to be dedicated to IT, none of this "Join a prestigious law firm, where the lawyers are gods, and ye are just another peasant" vs "Join an organisation full of like minded IT people. Where IT is the business and business the IT". This means the inhouse group tends to wither on the vine once the pendulum swings to outsourcing. Look at all the large professional and managed services companies. EDS, IBM (they sold there PC arm years ago, so now all they have is servers and professional services to sell them), Fujitsu etc. Offshoring is a small part of the outsourcing environment. Just look at other more common forms of offshoring. Customer Contact centers for the companies customers... these are outsourced. When you call Apple or Microsoft or Cisco, you are probably calling an outsourced contact center if you are joe publice. An even more common outsourcer of course is an ISP. If you want to work in house for a company do something that looks after the CEO and the business. People who look after the software for the clerks get outsourced first. The ones who look after the CFO and CEO tend to go last. So look after report applications for CFOs, look after Bloomberg for traders, look after Exchange for the company. But being the last man standing you might want to consider a wider range of options and like minded IT gurus in an outsourcer. Afterall exchange is going to the cloud and that fancy pants consultant gets payed more for supplying the same reports. In the end, let the trend be your friend. IT can be outsourced. Bean counters can and will judge your role based on cost not value. It is better to be well rewarded. So go mercenary and make sure your skillset is valued either in house or in the outhouse. Disclaimer: I've worked on the helpdesk for contact center managers to call. The contact center for contact centers. And I've also been the internal support (inhouse) for an outsourcer company (outhouse).

Pctx
Pctx

..blessings. Having had worked @ Intel, Steel, healthcare and now education, IT in each of those sectors is radically different. I'd say the non-changing face of IT is 'quality people' as if you don't have skilled workers who can handle all of the points you mentioned, you might as well give up and go home. As the 'Cloud' catches on, security and convenience will be huge factors to weigh for any company. Even the talk of a "private" cloud makes me laugh as technically shared information across an external source has the chance of exposure. Being the Helpdesk Manager though, cloud web-apps have made my life easier and end-users more happy, but what are the long term costs of those? Time will tell I suppose.

NexS
NexS

Dare I say it? iPhone!

ScarF
ScarF

... since the outsourcing became so present as business after the off shoring came as an option. I know companies moving everything offshore - including furniture, and cubicles' walls, staplers, and garbage cans, chairs and security systems - leaving just the bare-naked walls. Everything is looking like after a plague. I see the disaster surrounding me. Everything is going offshore - industry and services. I see the North American economies on the brink because there is no longer a foundation to support them ? the Industry. I see friends on the edge. I see the IT going nowhere. I see a horrendous decrease of quality in IT ? products and services - because of the use of cheap "professionals-with-the-same-skills". Same skills on paper, of course. I see all of us in the near future flipping burgers to each other ? as someone brilliantly said on a forum. Who will guaranty me that outsourcing something to a company in the North America will not be moved offshore in the near future? For me outsourcing is a NO-NO wherever is located the company. Outsourcing is not a trend of IT, but of pointy-haired idiotic managers. Is a trend encouraged by greed and allowed by governments. But, the solution is in itself. Soon, the work cost will decrease enough in North America ? while increasing off shore ? for the companies to start moving back. So, I see the same bunch of idiots moving furniture around the globe, and continuing to destroy lives, just for saving a few pennies. Like a Kafkaesque globalized U-Haul. I haven?t enough words to describe how much I despise the CEOs and their supporting politicians. And, this is not a knee-jerked reaction. It is a fight for surviving.

sermic
sermic

I like this thread as it is important to try keep fresh with the trends. I'd like to add the consideration of project management trends to the mix. Many are talking about this, especially the PMP certification and actual experience in the tech field along with the cert vs. the non-tech PMP with general PM experience. Certainly taking into account Moore's Law we need to include those with the inclination to help bind these trend to business in an organized manner. And definately to keep things down to earth. Definately a worthwhile topic to integrate into the trend analysis.

larry.herzlich
larry.herzlich

(ignoring any grammatical implications) I think the "consumerization of IT" should really be something like the "enterprization of Consumer Devices". I think it is a scale-up rather than a scale-down action that the smart devices have made. The devices that are able to converse with the enterprise infrastructure have a higher acceptance rate than those requiring kludges to work. For example, the Palm conduit made connecting with corporate e-mail and calendars a viable solution. The iPhone wasn't a factor until it could communicate with Exchange. I think we agree that consumer devices such as thumb drives, external USB drives, CD/DVD burning programs, music library programs, etc., are accepted by IT out of necessity for being able to focus on more critical work. It's still a security nightmare. I'd rather have music stored locally (not shared) than have 100 users streaming all the time. The cloudy center has been around for a while; especially where the corporation doesn't deploy a personal backup solution. I remember my I-drive on Novell Netware and my Windows shares or Samba shares being the only place IT guarantees my data will be backed up. RE: Outsourcing. I remember a local telecom giant talking about "on-shore" off-shoring. The oxymoron was they were looking for a cheap place in the US to setup cheaply (rent, utilities, cost-of-living) and where they could find a smart labor pool or get folks willing to move. Of course with telecom, everything is over the network anyway so they could fix that issue themselves. I thought it was interesting that we don't always need to leave the country to solve the ROI problem.

yattwood
yattwood

I just spent AN ENTIRE WEEK of 16-18 hour days getting a major system back online, and NONE OF THE _PRECIOUS_ OUTSOURCED PEOPLE WERE _REMOTELY_ INVOLVED!!!!!!!!!!!!!!!!!!! It was the _workerbees_ that have LIVED, BREATHED, BEEN AWAKENED AT 2 AM that got this system back! We are in the process of moving our Data Centers yet again, and we have had NOTHING BUT ISSUES: language barriers, systems taken down WITHOUT considering the effect upon other applications, large drains upon the time of the _FEW_ internal IT people who are left, who, by the way, are EXPECTED to do data center move activities AND keep production going AND go to meetings AND give status reports! "Knee-jerk" reaction, indeed! Perhaps the _workerbees_ who have to DEAL with outsourced people who can BARELY be understood on the phone, who, of course know MORE about the system than YOU, who will ONLY DO _EXACTLY_ what they are told, and who require PAGES AND PAGES OF DETAILED DOCUMENTATION - the workerbees who have to LIVE with what upper management has decided - perhaps they have a REASON for their "knee-jerk" reaction???????????????????????

ashepard
ashepard

Cloud computing offers DR (disaster recovery) options - it also requires internet connection. Local IT business that can not re-loact must keep IT folks on hand. Example are cities, hospitals, water and sewer treatment. Come fire, earthquake, Katrina, EMP, HAZ-MAT, etc - they should not shut down. Here Local IT working locally works. Bring in others? Yes but "A disaster is a bad time to start exchanging business cards asking 'what is your name and where do you work'! " - me.

Gadbois.Joshua
Gadbois.Joshua

Working on a CMS contract for the last 10 months, and at BCBS prior to that has demonstrated to me (painfully) how the healthcare industry is consistently 15-20 years behind current technology trends. Yet the modernization efforts are getting billions across the industry, so there should be some major changes to come, right? Do you have a list of suggestions for healthcare to implement the 5 trends you mentioned here?

ebulfin
ebulfin

What in God's green land is a mote? If it needs a drawbridge then I assume you meant moat, as in water filled defensive ditch around a fortification. Thinking about the use of the word, perhaps you meant a tiny speck of the water from the moat, which could be classed as a mote of the moat. Sorry for the comment, but I hate to see the English language 'mangled' in such a way (even American English). Regards Eddie

jkameleon
jkameleon

The more technically demanding & creative the offshored project is, the bigger the savings. In absolute terms, the difference between the high salary of a highly trained & talented expert in the USA, and high salary of a highly trained & talented expert in Rwanda is far bigger then the difference between the salaries of American and Rwandan helpdesk grunts. By far the most important factor is ease of specification. Projects, that are easily specified, are also easily outsourced, and the other way round.

lgarlick
lgarlick

The decision to out source must rely on whether it has a better ROI than not outsourcing. That's the bottom line. What I am reading in several comments is not that out sourcing shouldn't be considered, but that in those cases, the people making the decisions did not do due diligence on identifying all the costs associated with it, especially long term costs. A company looking to save by out sourcing must take many more aspects into consideration than just dollar for dollar work units. That's not to say that it wouldn't be useful if those factors are taken into consideration and out sourcing still makes a better ROI. Any business man who does not look for ways to reduce costs effectively will not be in business for long.

john.maguire
john.maguire

Personal experience lends me to believe that an IT body with a PMP Cert will trump a nonTech PMP every time (well for the purposes of IT Proj Mgmt). Generic PMP is nice, but not as good as someone who understands the underlying system

theguru1995
theguru1995

I agree 100% greed is killing IT... and bad tech support...

rackerman
rackerman

As you read through many of the replies to Jason's as well as other discussions much like this, has it occured to any of you that your responses are only heard by your peers - it's the "you're preaching to the choir syndrome". Tell the story to those who can make a difference, the CIO's, CFO's, business execs who are making these calls (the offshoring, outsourceing etc.)be succinct, accurate and fair in your point of view. They can't and won't hear you here. There are 100's of groups where those people reside and maybe, just maybe it would make a difference if they heard you directly.

Stan.Williams
Stan.Williams

I completely agree with you. I have never seen outsourcing/off shoring work well. Even if they worked for free I doubt it saved money and for the exact reasons you mention. I can understand outsourcing nonspecific business functions; asset management is asset management, don't reinvent the wheel. But when it comes to busines specific manufacturing apps, lab apps, etc. you will waste time trying to replace your business analyst experts which, by the way, are now your top developers/support. It's so much more than dropping data in someone elses lap and walking away. They (whoever "they" are) will require all the business knowledge of the folks you swore you could do without. You didn't replace anyone, just moved your knowledge base. And could now easily be held hostage by them. Never seen it work well, don't expect it ever will. Why? Because the great minds that design an out sourcing option rarely define the intangibles if they recognize them at all. Last but not least - I can sense they have streched you well beyond your limits my friend. I hope you have an opportunity to look over your shoulder at this one day, laugh and enjoy all the "I told you so"s.

hauskins
hauskins

We are doing more outsourcing on basic commodity type services and it is working well. One thing we do is to make sure that the company we are using is still in the US.

hauskins
hauskins

More and more our internet connection is becoming ubiquitous. Hard wire redundancy and wireless that has satellite capabilities. DR for us has now taken on the dimension of having data and servers located hundreds of miles away. If a disaster is large enough then DR might not even be possible for some extented time, that is why you develop a business continuity plan that includes calculators, pencils, paper and your wireless mobile device.

laurawhite
laurawhite

The education of physicians is geared towards teaching them to be an individual problem solver. This is why they all behave as individuals and not as members of a team. Technology solutions are less about enabling an individual to solve a problem 5 different ways and more around solving the same problem the same way. The education needs to support technology at the basic level before Health Care will fully embrace it. If you can treat them as individuals and stop trying to get them to agree on anything your Healthcare projects will progress faster and adoption rates will be higher.

Lazarus439
Lazarus439

"a tiny speck or particle" (Encarta) or "a small particle" (Merriam-Webster). Not sure exactly why one would need a drawbridge over one, but one should never be surprised by any government project...

hauskins
hauskins

Mote is a word, so a spell checker would not have helped. It is a usage issue and probably a mistake caused by a homophones, Mote vs Moat.

ebonstorm
ebonstorm

What he meant and what he wrote were too different concepts. So, instead of a mote (an insignificant thing) he meant, a moat (a defensive construction) but the premise of the idea was dead on. I suspect, as in most essay construction, it is difficult to see mistakes while you are writing and sometimes even after you are done. Spell-checkers are not always the answer, especially when your mistake is a word! Sometimes a friend who is a good speller, or a copy editor is your next best thing. With the production schedules people are forced to be on today, we just do not have the time for extra editing. Cut him some slack, and note, what I see as the accuracy of this particular message. It has long term ramifications for anyone working in this particular industry.

dawgit
dawgit

That's where the mote monsters return after visiting. ;)

ntrewartha_germany
ntrewartha_germany

As one Brit to another - Mote is in fact a english word . take a look at the Oxford dictionary. Dear oh dear.

taylorstan
taylorstan

It's just exploitation....no matter how you try to spin it.

theguru1995
theguru1995

I beg to differ, is is unfortunate that our company outsourced some positions, all our UNIX admins, except for a couple. We have been struggling with the new help on two major fronts ONE, and most important is the language barrier, by far. SECOND, the skill level, not near as highly trained or experienced, definitely not GRUNTS, not by a long shot. If this was to make things less costly, it just made it more costly, with lesser quality. Not good.

ray.white
ray.white

Well when you have to wait for Turn Around time because its midnight here and the 3am Confrence call cause millions are pouring thru code that cant be solved because to diffrent teams are working on projects and trying to tie them togather and the response from the overseas support takes min. of 4 hours for them just to figure out what an email says? I guess the savings are worth it..Loss can easily be in the millions GO CORP AMERICA Thank you for Trying to shop @ Walmart..NOW GO HOME

jacqui
jacqui

EAsy to assume that a highly skilled expert in Rwanda is the same as a highly skilled expert in the US. The skills may well be the same, but cultural differences can be vast and communication a major problem. I've run offshore outsourced teams, and can tell you that the cost of communications problems can be enormous. And I don't mean language problems; I mean things that assumptions about what 'completion' means, can vary, as can 'on schedule'. Outsourcing to a somewhere with even a slightly different culture (even another part of the US in some cases)requires a greater management overhead.

QAonCall
QAonCall

If your statement: 'By far the most important factor is ease of specification. Projects, that are easily specified, are also easily outsourced, and the other way round.' is true, then the US worker has already lost under any terms. The primary driver should be a cost/quality balance (ROI). If any other business driver is used, the analysis is incomplete. If something is easily specified, that does not, or should not immediately equate to outsourced. MHO

kjohnson
kjohnson

As far as I'm concerned, sacking British workers and giving their work to an offshore company whose work is cheaper than, but inferior to, work done in Britain is immoral. It's exploitation, it's taking advantage, it's a sort of slavery. I urge anyone with influence on the government (you hear me, Mandy?) to have a law enacted saying that workers engaged on offshore contracts for British companies shall receive at least the British minimum wage. That, I suspect, would put an end to most offshoring. It would at least test the unbelievable, constantly parroted claim by management that price is not the issue and Chinese, Venezuelan or Vietnamese companies produce good quality goods more efficiently than British companies do. It's nonsense. Things never used to fall apart after five minutes the way they do now. Like other correspondents I have never heard of an offshored piece of software being written well and more cheaply than comparable work done by British workers. What's more, if the law stopped companies from offshoring, my wife and daughters would again be able to buy clothes and shoes that fit.

50-50
50-50

Jason wrote "The big benefit here is 24/7 monitoring since these large vendors have engineers in their sophisticated NOCs at all times, plus they have specialists who can solve more difficult problems when the need arises." If he believes that, then he's been drinking the kool-aid fed to the CIOs by the folks selling offshoring services as the Big Panacea that cures all ills. What stupid suckers they've revealed themselves to be. I've yet to hear of an offshore Operations Center where the new customers' virtual consoles are staffed by experienced experts, despite the sales pitch that touts how much smarter their experts are than your own folks who've done it for years and know your systems and their idiosyncracies. Instead, when the vendor gets the contract, the vendor then hires and "trains" folks to staff the virtual consoles for the new client. Those folks know almost nothing. Many of us have grown very tired of explaining IT 101 to offshore "partners" who have 1/1000 the knowledge and experience of the folks they replaced. Short-term thinking and a herd mentality that makes lemmings look like individualists seems to be the main characteristic of the modern CIO. No wonder the kids are abandoning the idea of IT and engineering careers - they see their parents getting no respect for their knowledge and experience, losing their jobs in middle age.

ScarF
ScarF

for your reply. As I stated in my comment, this is a fight. Doesn't matter ROI, dollar for dollar a.s.o. What matters, is each individual's sustainability, and the financial security of his family. Out sourcing is a trend in IT. Offshoring is the main engine for this trend. Company X wouldn't think to outsource its helpdesk service should this not bring the benefits provided by the offshoring. I have no idea about what the business lads (men or women) take into consideration when they calculate ROI, or whatever, related to offshoring. What I can guess is that they miss some points, they jump head first, and they don't really care. Otherwise, everybody will have something to gain from this. As the economy works these days, I don't see many business lads earning much. Even their businesses are taken over by the former offshore outsourcers. And, this is the only satisfaction I have. As for me, outsource continues to be out of discussion. I prefer to hire local. Somebody has to pay for the Chinese junk at Wallmart, isn't it?

dwdino
dwdino

"Let them eat cake!"

Dknopp
Dknopp

....and they do not care. It is about how much money can they say they have saved so they can then get a huge bonus/promotion, downsize the capable people who probably built the apps - all that knowledge by-by, and when it breaks nobody knows the code.

yattwood
yattwood

Ah, Mr. Williams, you are a gentleman and an IT professional....I thank you for your concern. I confesss to some aspect of 'schadenfreude' in the situation - I and others had repeatedly told upper management that this system Was A Disaster Waiting To Happen: unsupported software, some servers 11+ years old - and this is the major financials system for the company! I and others had also told this same group of people that the Disaster Recovery servers were _not_ the same size and category as the production ones, and that a _full_ DR capability was not possible. However, as you doubtless well know - It's All About The Benjamins - they didn't want to spend any money on this system for years; the crisis happened, and during the week it was down, they were flying extra equipment, disks, HBA's, fibrechannel cards - Cost Was No Object (I should have ordered my UNIX workstation during this period (ha)) Now that the fire is out, they want a FULL Disaster Recovery (only 11 years late), and mirable dictu - they might even consider UPGRADING it (I'd love to be able to move off of Oracle 8.1.7.4, for example) sometime before The Return Of Halley's Comet! Yes! "Just Another Day In Paradise"

MyopicOne
MyopicOne

Another part of it is the heavy regulation surrounding data acquisition and management which requires fairly thorough testing and documentation; over the last 14 years in Biotech I'd say Validation efforts have been at least 50% of all new software project costs. This is a huge expense with little visible payback and has been done the best when auditors have few comments... Those costs explain why some of the industry appears to be trailing-edge.

FatNGristle
FatNGristle

...Consumerizarion is not a word, I'm quite sure. With numerous gramatical errors, this could well seed an article on our dependencies. We depend on spelling and grammar checkers, so if we think we checked it and we didn't... I was so distracted by the errors, that I forgot the point of the story. Clearly that's entirely the author's fault and not my SQUIRREL!

ebonstorm
ebonstorm

Where tiny monsters dwell waiting for their next tiny meal?

jkameleon
jkameleon

What I had in mind was R&D, not administration.

jkameleon
jkameleon

The best example of such project is developing algorithms and programs for communication modem. Specification is very simple here, basically it's "What goes in, must come out on the other side". So, there is no such thing as Turn Around time. You write specs, throw them at someone, and wait until it's done. Easy to specify does not necessary mean "easy to do". Modem software looks simple on the outside, but actually, it's very demanding. To get the idea, google "viterbi decoder", "digital filter", "z transform", "digital signal processor", "harvard architecture".

jkameleon
jkameleon

Projects, that are easily specified, are easily outsourced. What I had in mind here is stuff you throw across the fence, and wait until it's done. By the "other way round" I meant hard to specify projects, projects with unclear and/or changing specifications, projects that need a lot of interaction between customer and developer team. Such projects are best kept in house, especially if they involve business know-how.

spawnywhippet
spawnywhippet

I have worked on major IT projects with 4 multinationals, on 5 continents over 12 years, all of them involving some degree of off-shoring. This path was always selected by project managers / execs for reasons of reducing cost. Without exception, the off-shored component was late, over-budget, under-spec and cost more than delivering it locally would have cost. In a third of the cases, the off-shore component was completely scrapped and redone locally, half of the rest required major re-work and investment by the local teams. An recent example was we could have '2 expert certified architects in India for less than the price of 1 in Australia.' The work these 2 'experts' produced after 3 months fulltime went straight into the trash bin and I redid the whole piece myself in 2 weeks. End cost was about 6 times the price of me doing it in the first place, and took 8 times longer.

elgenubi
elgenubi

I also noted that language can be a real assle, a few months ago, I found a bug in Big Blue website supported in India; a link to US contact list was leading to IBM Czech website... Written in Czech... I reported the problem and was answered there was not problem with the website. I supposed that for the techies in charge, english and czech were similar. As for the cultural aspect, I noticed from India, a tendency to work by the book. To illustrate this, I collegue sent a form via email to request an access; his emails was sent back to him saying that he forgot to put his email address in the form... So it took another 3 weeks to finally get the access. To avoid these types of problems, I would keep support in the region it serve. So this way, most language and cultural problems would be avoided. Here in Quebec, our culture and language are different than, say Texas peoples, but we share North American culture and for most of us in IT, language is not an issue. Of course, it would not be as cheaper, but it seems logical to think that clients would be more inclined to do business with a company wich gives them the best support.

jkameleon
jkameleon

Easy to specify means easy to test & assure the desired quality. So yes, easily specified equates to easily outsourced. I know that from my own experience, I did quite a few such projects in my younger days. You get the specs, and you get paid when desired parameters are met. BTW, US professionals are fucked in more ways than one in this game. They have to pay the college tuitions themselves, among others, while in many developing countries, college education is paid by the state. Graduates, not burdened by student debt, can afford to charge less for their services even if purchasing power parity in their country is the same as in the US.

jacqui
jacqui

Has anyone ever done a project where the specification didn't need changes?!! It might be easy to specify, but you try making changes if you've outsourced it! Don't underestimate the difficulties. It ain't as easy as people think.

NickNielsen
NickNielsen

[i]What's more, if the law stopped companies from offshoring, my wife and daughters would again be able to buy clothes and shoes that fit. [/i] If you get your wish, you may find that clothing now costs more than petrol.

kjohnson
kjohnson

Yes, any sensibly run organisation ignores the stockholders' voice, because the stockholders aren't the management. The organisation exists for the benefit of its staff and its customers. The stockholders are sleeping partners. One of the symptoms of "the BP-isation of management" (dontcha love that phrase?) is the elevation of the stockholders to the status of the directors and staff. That's not right. The stockholders have the right to sell the company's stock if they don't want it, to turn up at meetings and vote for a Managing Director, and to trouser their dividends. They do not have any right to be treated as having an interest in the company as great as the staff and customers do.

yattwood
yattwood

Greetings, 50-50, You mean there is a great gulf between the Siren-like promises of the outsourcer's PowerPoint presentations to upper management and the _lived_ reality????? I am _shocked_, totally shocked! (NOT!) Since the vast majority of outsourcing contracts are negotiated without much involvement by the workerbees (who know all the 'ad-hoc' things they do; the emails they answer for the user who 'needs-just-a-little-query-run-in-the-production-database-to-answer-a-question-from-a-customer', the non-standard reports and processes run, etc, etc - these processes are invariably _not_ included as part of the contract, and when the outsourcer is asked to incorporate them, there is a request for additional 'dead presidents'! "Having is not as pleasing a thing as wanting" - Spock, 'Amok Time'

MyopicOne
MyopicOne

Actual results of outsourcing/offshoring at a previous company, now three years into the great adventure: At least 3x the number of personnel as before. At least 3x the time to get the same tasks done and in some cases more - provisioning/procurement is now measured in months, not weeks. Perceived quality of the work completed as measured by surveys worsening every year. Almost a complete loss of institutional knowledge. Little or no longevity in the offshore/outsourced staff; the majority substantially inferior technically to those they replaced if not noobs. Blew through their annual budget in 6 months in year two. One fired CIO/VP and several departed Director level folks. This trainwreck was so obvious in coming; I do feel sorry for my friends still trapped there by the economy.

neilb
neilb

Ah, the smell of fresh pedantry.

DesD
DesD

... should probably NOT be working round the clock fixing cockups created by incompetents with the help of innocent outsourcers at any location. Time to give yourself a bit of priority service.

jkameleon
jkameleon

"We are losing the edge", you say, but who is that "we"? We the citizens? No. For the multinational corporations, citizenship doesn't matter. We the employees? Ha, ha. It's patent rights that matter, not who did the R&D work and where.

theguru1995
theguru1995

I know, lets outsource all our R&D to China and Russia and Iran!! Wow, that should be fun... why ?? We are losing the edge, because of shortsighted quarterly profit reports... Where is the sanity anymore ?

jkameleon
jkameleon

Let's try put it this way. In order to retain organizational knowledge, the company needs to maintain a team of people with insight into business process and/or core application. Normally, this is in-house staff, consisting of the old style permanent career employees. If, however, company practiced corporarate (mergers, acquisitions, etc) and management (downsizing, team building, morale) fads in the past, career ladders are dismantled and employer-employee relations fubar, it doesn't really matter who guards its know how. Employees, contractors, offshore staff - they are all equally disloyal. If the company can live with that fine, if not- well- it can always blame its IT failures to offshoring.

Tony Hopkinson
Tony Hopkinson

Spending more time on an issue as a direct employee of a company usually has benefits though not always cash. :( The relationship is nowhere near as clear cut when you are wiorking for someone else. I thought your point about how tightly coupled the function is with the business was definitely on target. The argument I'm making is a corrolary of it.

jkameleon
jkameleon

. . . as well. There is no difference here. There are easy to specify tasks with measureable results, and there are tasks, which require tight supervision. The former are easily offshored, while offshoring of the latter ususally fails. That's all there is to it.

Tony Hopkinson
Tony Hopkinson

All suppliers try to do as little as possible for as much as possible. That's business 101. Outsourcing ignores that, and that's why it fails.

Joaquim Amado Lopes
Joaquim Amado Lopes

Until a few years ago, a major multinational company had different IT support solutions for each country (Europe), with different processes and customer satisfaction. In some countries, IT support was outsourced and in others was staff. They decided to outsource it all to the same provider. First line support moved to one single support center with engineers from different countries (culture and language barriers are more critical in Europe than in Northern America) and major sites each kept a couple of engineers for those things that require presence. In Portugal, customer satisfaction used to be >97%. Considering the projected overall savings, managers decided that a drop to 85% would be acceptable. They got it (in the beginning it went way below that) but the savings were a lot less that projected. I'm not even sure that there were any significant savings. The bottom line is that managers are willing to sacrifice service for savings. And savings can be projected, how things will actually work out doesn't.

jkameleon
jkameleon

Example: Software for ABS system. No changes, most certainly no bugs, it must be done right from the very beginnging. Technically very demanding, very costly, yet also very outsourceable. Software, which requires maintenance, which is tightly bound to business, anything that requires interaction is not outsourceable in the first place. Business rules implemented in core application is not just a program. In fact, that's company's business know-how, formally written down in programming language. As such, it must absolutely be kept in house. Outsourcing something like this is the most stupid thing on could do.

Tony Hopkinson
Tony Hopkinson

All they did was reduce the salary bill, and get promoted before the wheels came off. Can outsourcing promote efficiencies? Certainly, only a naive fool would consider that it's the main reason businesses look at it though. The driver is cheaper, it's increased margins, quality of service didn't drop because Raja is in india, it dropped because some poor chump off the street with a script is cheapered than trained foreign professional and because there was no appreciation that people in a remote and separate business required more and different management.

QAonCall
QAonCall

TCO by off shoring/outsourcing is always cheaper. That is a bad assumption. My point is, companies must consider both, to make a good decision, and the specifications should be clear, accurate and complete for either place, and certainly (effective) change management would be used for either development/service location. This should be like any other business decision, a comparative analysis of the ROI.

jkameleon
jkameleon

Embedded software, for example. Various industrial machinery, washing machines, microwave ovens, etc. Most of that stuff is offline, and even if it is online, firmware updating is in most case out of the question. Software is often burned into the chip during manufacturing, and never altered. Such software must be 100% bug free, very carefully written and tested, because once it's out, it's out. It's typically part of some other product, and covered by the same warranty. Software bugs in ABS system or fly by wire are not an option.

capeterson67
capeterson67

I have worked on many, many projects, large and small. Some for GM and Ford, others for local public libraries and there is only one constant: Needs change. I have never been involved in a project that the finished product stayed the same as what was originally specified. They always get more complex as more people with input get involved and the wish lists get longer. I can't imagine trying to work with programmers and developers over-seas and having to deal with even larger time zone differences and language barriers.

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