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Offshoring IT - What can be done?

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by silvioandpauly

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The company I work for has moved all it's manufacturing to cheap China. The quality sucks but nobody seems to care because the parts are made for pennies and the executives look like heros to the stock owners.

Now our CIO is looking to offshore IT to India. I guess there's nothing our staff can do except find new jobs before we're asked to do the knowledge transfer bit. I'd rather chew on broken glass.

It's very disturbing - all around our area, the only thing being built are strip malls and shopping outlets that pay 7.00 hr. These stores all sell cheap China products. Even the so-called high-end name brands are made in China, they just have the fancy labels that we dumb Americans shell out $$$$ for.

Sorry I'm just venting, but years ago when our manufacturing was going offshore - we were told the US is a service industry. Now the service is going to China and India too.

So whats left for my kids? I guess other than retail, we get jobs in health care or join the Army to blow up things.

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by sabin

I have been in the BPO/ITES sector for almost a decade now. Began my entry with skepticism, then made some money as the sector paid well, then this new sector took a toll on my health. Working in the odd hours to support business 20,000 miles away from home isn?t easy.

I can guarantee that the next generation jobs will stay within your geography. And my arguments are not based on economic factors alone, but on small but ignored facts.

1. Off-shored job will have no takers as it will impact health. Like myself, many colleagues are now averse to these jobs. Its just matter of time before many will feel the impact of this.
2. No Career growth: While it offers great salary packages and fancy designations, there is no career growth. What will a call-centre employee grow into? Manager and then what? You don?t become a CEO by answering calls?
3. Domestic Jobs are paying equally well. The lure of MNC are fast vanishing, most domestic companies are catching-up and some paying more.
4. The problem of plenty. While the sun is now shining, there are 1000s being churned out of universities with the same skill sets. As we build a generation of dog-eat-dog professionals, it will be a classic case of running our own next generation.
5. Rupee appreciation. Few years back a dollar was about 50 rupees, today its about 39. If the same trend continues many businesses will continue to pull back. May be they will land in other developing economies like Philippines etc, but India would have fallen from its ?Cheap-destination? seat. But again, smaller countries cant afford to have its entire population supporting off-shores jobs, the domestic infrastructure and businesses will suffer.

There are 100s more small reasons. The reverse shoring has started Apple went back from Bangalore, credit-suissie went back ? though it had more to do with US mortgage situation. But they all point to the eventual reality.

Sabin
www.yaroksystem.com
www.dotlabz.com

by tig2

I think that we are beginning to see the reverse trend- and for many of the reasons that Sabin has mentioned. Here's a few more thoughts...

We're in the Christmas season in the US. This usually means that we purchase. But in my home, it means that we are purchasing from countries that we have researched carefully.

I am shopping for children. One of them is autistic. I also shop for an autistic adult. NOTHING I buy for a child or a disabled adult will come from outside the US. Period. And I can make certain of that. The daily tally of recalls due to poisons used by other countries is frightening.

I will not sleep at night if a toy that I have given to a child is recalled for lead paint or whatever. I would rather pay a bit more for the gift or make the darned thing myself. At least I would KNOW the quality.

I would like to think that we are becoming "fussy" about this. I know that is not the case. For me, however, it is more important to purchase one really good quality thing than a dozen of lesser quality.

And this thinking is showing in business as well.

We can "near-shore". Take business requirements to a city that is cheaper but is populated by American workers. And that is happening all over. But it is a slow adoption.

I think that we are able to balance the picture. But America is in for a bumpy ride- when the pendulum swings too far in a single direction, the path back can be a difficult one. I only hope that we have the stomach for riding it out.

And to Sabin- it is hard for Americans to understand what so many Indians go through. I have had many co-workers tell me of the demands made on Indians and the challenges those demands represent. You paint a good picture of those difficulties.

I hope that you continue to be well. And I pray that the Almighty brings you good health and good prospect.

by karen

I think the days of easily offshoring are indeed coming to an end and it's probably to the benefit of all involved. I'm certain that many companies will simply move their operations to even less costly locations. I've already seen an example of this when calling technical support for a US Robotics product only to receive someone on the phone with a difficult-to-understand accent...a spanish accent.

I think it's interesting that we in America tend to be both alarmist and naive about the shrinking of the world. While we have always been so afraid of jobs traditionally held by americans moving to other countries, we have also been slow to step up to the plate and start doing what we need to do to compete in a world economy.

I think the future will see India as more of an equal player in the world market with its people transitioning from call center jobs to more pivotal roles. The next VMWare or Microsoft could be brewing in the universities of India right now and it would most likely be run by Indians in India rather than by foreigners abroad using inexpensive Indian labor or expertise. By the same token, if we Americans take advantage of both the risks and opportunities before us, we could find ourselves at the forefront of the next wave of technology companies.

I think it's inevitable that poorly paying, entry-level jobs will go wherever the price is lowest, but the ability of workers work without borders means that America could be able to retain and build more high-paying jobs here.

In the end, the workforce that can evolve the fastest to keep up with what the market needs will always win...no matter what flag they live under.

by dr dij

This is an ongoing trend. However the sky is not falling. Salaries for help desk people in India are rising but still slow. Skilled top tier IT pgrms, dbas, analysts / architects in India are now on par with some EU countries.

Contrary to popular belief, there is not an endless supply of people who will do the more complicated IT work.

Secondly, not all companies are US based or even predominantly US workers. Why should they bring work to the US? It is up to us to learn more and be competitive on the world market.

We already have some advantages: good infrastructure. Why do you think those companies want to bring in H1-B workers? because infrastructure in India is a mess: roads, water, electric, courts, institutions in general and critical items like pollution controls needed in india and china both need vast work.

Nowadays, offshoring won't save much when adding in having to govern and manage the results, deal with time difs, travel, etc. What it can do is provide additional people with skillsets that there are not enuf of in one place.

Above the subsistence level in India, for example, it is NOT cheaper to buy stuff; i.e. an iPod costs the same, etc.

Bungling such as taxes to take goods from state to state and govt corruption cause major problems for biz. Socialized industries, while going down in # are still a drain on their economy.

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