IT Future

[mysticlighthouse]

After reading this article, I initially felt a little disappointed about what may lay ahead for IT. But then I started thinking that maybe the trend for outsourcing will be to us little companies. What are your thoughts on this?

[TrafficProducer]

Outsourcing will be to us little companies. What are your thoughts on this?

Programming to Search Engine Promotion and even Hosting will start to move to places like India over the never 10 years.

Argh! Panic...

We should not under-estimate their skill levels or the impact of this.

Hardware sales could be done more at home, maybe.

[Sualdam]

I think there'll always be a market for home-grown talent, so if anything small companies will probably benefit in the long run (my opinion, of course).

I think outsourcing is really only something that large companies - or companies aspiring to largeness - are either a) need to be seriously interested in or b) are able to afford.

In some ways, it parallels the idea of moving your site of operations for tax reasons. In the UK we've seen countries wanting to develop certain industries, and so they offer a cashback system to those who invest and build facilities there. Ireland is one such example in recent years.

However, once the offer ends, and companies find themselves having to pay the going rate, the drawbacks to not being situated in the thick of things become apparent. I know of several businesses that did this, and have sinced closed down the new operations because of the costs.

I can't see how outsourcing 'soft' products can be any different in the long run.

I like the idea of outsourcing IT skills to developing countries - but I abhor the reasons people have for doing it. To me, it is like a modern form of slavery. At the very least it is exploitation.

But the analogy with slavery only goes so far. Since we're in the 21st century, and not the 17th, 18th, or 19th, it is inevitable that although countries like India provide 'cheap' labour now, this detail will disappear with time (and a relatively short time, I would guess). Even now, people think of Indians in terms of surviving on a few dollars a week. And yet the salaries of skilled staff over there are already way above that. Even a western graduate moving out there might be quite happy with some of the salaries available, especially when you consider the cost of living.

The only risk is that skills in the West will deteriorate - but I doubt that it will be terminal.

Who knows? In 10 years maybe India will be outsourcing to the USA and the cycle begins again.

Evolution works in mysterious ways, her wonders to perform... :)

[TrafficProducer]

Sweat Shops, slavery: This could be a total myth. Some places may have very good wage structure and a high living standard especially compared to the cost of living.

The method used is the typical attitude of undercut prices so that they are able to squeeze out most the competition and become a monopoly. Then charge a lot higher price because the competition no longer exists or has been so magnetized as to not effect on their business structure.

Over time places like India, (note I say like India because even India is starting to struggle with other lower wage countries e.g. like Korea*), will have to change. By then it could be too late for a lot of UK and USA businesses.

I live in the United Kingdom where it appears that the tax system and regulations, (the red tape, European laws, etc.), has a major negative impact on businesses who have to compete with other countries. I assume things are similar in the USA.

I assume that Red Tape, ( do they have any), in places like Korea has less impact and this makes it easier to conduct business with other countries.

* Koreans and Indians are made to watch English-speaking television programs so they are able to communicate in a more native English tongue.

I like the idea of outsourcing IT skills to developing countries - but I abhor the reasons people have for doing it. To me, it is like a modern form of slavery. At the very least it is exploitation.

But the analogy with slavery only goes so far. Since we're in the 21st century, and not the 17th, 18th, or 19th, it is inevitable that although countries like India provide 'cheap' labour now, this detail will disappear with time (and a relatively short time, I would guess). Even now, people think of Indians in terms of surviving on a few dollars a week. And yet the salaries of skilled staff over there are already way above that. Even a western graduate moving out there might be quite happy with some of the salaries available, especially when you consider the cost of living.

[RicInACloak]

I had some thoughts on the comments in this forum, but then I read the article, and what an odd article it is, consider the following:
- What is the basis for the 'correct' number of technology companies?
- 'customer no longer king' but 'cut-throat pricing' sounds like an unlikely mix.
- 'innovation will be stifled' completely ignores open source activity, which seems to fall outside this article, despite being a very relevant issue when looking forward.
- lots of outsourcing comming, but the jobs stay in the US. given the cost differences, this must mean the author believes the US$ is going to get weaker, but yet no mention made of that.
- 'We believe that by 2005, 1 in 10 jobs in industrial countries will have relocated to a developed countries' that has to be a typo surely they meant 'developing countries', but wait a minute, why industrial countries, in most first world counties the bulk of GDP has moved away from industrial towards services not industrial, but in developing countries the bulk of GDP has moved away from agriculture/mining towards industrial. I dont get that paragraph at all.
- 'because customers were unhappy to hear a different accent answering their queries' ouch, ouch, ouch, what a damming inditement of narrow thinking amongst the customers. Perhaps this is the most serious issue raised in this article, and it just gets glossed over, although in fairness the point here is off-topic.
- 'The research firm remains optimistic about the IT near-term future, which should be driven by key technology advances, architectural changes and best practices leading to a strong recovery.'
Based on what? All the trends discussed are already here! The 'technology advances' are not comming from the US as far as I know, or if they are, then they are in Open Source. Telephony is comming from Scandanavia, new desktop apps are comming from open source (maybe US but not generating revenue in the old way), handhelds, satelites, cameras from everywhere...
- 'We now see true recovery in the making' in an article entitled 'IT job sector faces big drop', a bit contradictory hmm?

basically the only line in the article I give any credibility to is the last one 'upgrade their skills'
its always good advice.

Basically dont worry too much, if your skill stay current you have a chance, especially if the US$ continues to weaken, and offshoring therefore becomes less attractive.

[Sualdam]

Originally Posted by RicInACloak

Basically dont worry too much, if your skill stay current you have a chance, especially if the US$ continues to weaken, and offshoring therefore becomes less attractive.

Mmm. Not sure about that.

If you look at what George Bush did to steel imports to protect the US steel industry, what could he also do to to people who try an outsource in order to protect the US IT industries?

Slap on a tax.

The US$ would have to weaken unimaginably to make outsourcing unattractive from a financial point of view, and that isn't likely to happen. A tax disincentive to outsourcing would have a much greater effect if outsourcing were to become a real concern.

Remember that America also has a tendency to react to possibilities rather than realities in the commercial world. If everyone in the US keeps going on about outsourcing being a problem - before it actually is, and with other countries (like the UK) having done it for ages with no measurable ill effect - slapping a tax on it could be a sure-fire vote winner come the next elections.

[Keimos]

The trend at the moment is for a lot of the Corporates to outsource certain parts of there operations, however call centres cannot come to your office and fix your computer. There are a lot of businesses that can provide this service but in my opinion mre small to medium size firms will employ or train their staff to deal with immediate problems.

The previous comments tend to deal with Blue Chip companies that have the £$ to spend where in real life any individual who can provide IT support and other skills will always have a place.

The days of high wages may have disappeared but there will always be a need for IT in the workplace as long as computers exist.

Just ask around and you will find out how many people use the internet and email, but ask them what they know or want to know about computers, then the answers change to I know enough, if anything goes wrong we'll get somebody in.

IT Lives, although not so profitable!!!!!!

[USALUG]

Date Wednesday October 22, 2003
http://www.newsforge.com/business/03...7.shtml?tid=85
Dell, Inc. may or may not be saving a ton of money by outsourcing its tech support, but it is definitely losing loyal customers as a result of the move. And if the comments I recently saw on the Austin LUG mailing list are any indication, the flow of customers away from Dell is only going to increase.

Date November 22, 2003
http://209.157.64.200/focus/f-news/1027020/posts
In a surprising about-face, Dell Inc. is moving some technical-support jobs back from India to the United States.

The moral of the story..... if you don't like what's happening.... complain...tell them... speak with your pocketbook if nothing else....... eventually they get the hint :) :)

[ron sheldrick]

Having worked in IT for well over 20 years... don't worry. It's all happened before
Companies outsource...then the outsource costs go up..then they take IT back in-house. It's a continuous circle.
IT and particularly data is the most valuable asset companies have....one day they will realise...and then the circle will be broken and It will remain in-house where it belongs.