oh goody, out-sourcing to balloon

[bigred]

First the article...

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Research: IT Outsourcing to Balloon by 2015

April 6, 2005 (PLANSPONSOR.com) – The number of IT jobs outsourced to countries such as India and China is expected to skyrocket from the current 5% to an estimated 30% by 2015, according to a new report.

According to a TechwebNews.com story, research firm Gartner reported that the shift - despite its size - will still not mean a net loss of US IT positions. "There are a lot of people who are currently programmers who could transition to higher-level positions where you need to be close to the customer," Gartner analyst Frances Karamouzis, the research report author, told TechwebNews.com. Karamouzis labeled the expected outsourcing change "a tectonic shift."

Other observers have predicted a similar IT outsourcing trend but believe the process will take longer, according to the story. Cindy Shaw, an analyst at Moors & Cabot, said she believes 30% of IT jobs will ultimately move offshore. Last year, Forrester Research analyst John McCarthy said 3.4 million US services jobs - -including a number of IT-related positions --would move offshore by 2015.

The rush to send IT work offshore also will result in an outflow of cash from the United States and other Western countries over the next five years, Gartner reported. Worldwide spending on offshore research and development and engineering will increase by a whopping 860%, from $1.25 billion in 2004 to as much as $12 billion in 2010, Gartner reported.

Also according to the research firm:

- offshore spending on infrastructure outsourcing will grow from between $100 million and $250 million to between $3 billion and $4 billion over the same period

- offshore spending on application-development services will more than double from $23 billion to as much as $50 billion.

Yet automation and productivity gains - not offshore outsourcing - are still seen as the greatest threat to IT jobs in the West, Karamouzis said. She predicted the effect of those factors on IT job displacement will be six times greater than the impact of offshoring by 2015.

Multinationals could also soon be looking to emerging markets for CIOs and even CEOs, Karamouzis reported. Gartner predicted that by 2015, 30% of the world's top CEOs will be from countries other than the United States.

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I AM SO #@$! SICK OF THIS OUTSOURCING BS. I especially love how they try to twist the numbers to make it sound like it's not a bad thing in the beginning because of people going to "high-level" positions……then at the end they talk about how possibly as many as 30% of all CEOs in that same timeframe might be overseas anyway. Brilliant. Not like this is exactly news, but this country is truly insane. Yeah let's bleed all these jobs away from our country, that makes sense. Anything for a quick buck right? That and all the illegal aliens, oh happy day. Heck, why stop there? In fact, why do we even bother having any borders or immigration or citizenship rules at all?? You're an illegal alien? Not any more! Everyone's entitled to everything this country has, regardless of circumstance. Just storm the borders....we won't stop you because we're so "humanitarian".....wheeeeeee..... Yessir, we're America and all about giving something for nothing (see: welfare). 30% of CEOs located God-knows-where? Sure, why not?? Anybody want to start up a petition, storm the white house, SOMETHING....cripes...

 

[Rat]

I'm not entirely sure what your rant is directed at. You're annoyed because people who are qualified to do a job are willing to do it at the (their) going rate? You think it's a bad thing that "30% of the world's top CEOs will be from countries other than the United States"? This is quite unreal. There are 6 billion people in the world, and you think that all the rich ones should live in the US? Or you think that all the ones in the US should be rich? Is an accident of birth to dictate whether you live a privileged life of wealth and abundance, as opposed to poverty and starvation?

The outsourcing makes those companies richer. It is the industry of the US that is rich, and it is irrelevant to them whether the people are or not. That has ever been the case, and if it takes this (outsourcing) to make you realize it, all the better.

And you want to storm the White House because people born into a country where they have few chances in life and will never enjoy the luxury of 'Western' life want to go somewhere where they can do better? I'm not creating strawmen here; this is what you have said. You seem enormously ungrateful for having been born, as it happens, in a country where you have the chance to do well from your natural abilities.

Anyway, apologies if this rant of my own seems a little combative.

Cheers,
Rat.

 

[TragicMonkey]

"Outsourcing to balloon"?

I was all excited, thinking the thread was about a new wave of high tech zeppelins, in permanent floating circumnavigation of the globe, serving as aerial bases for thousands of IT professionals writing code while sailing through the skies, borne on winds that hint of exotic spices into glorious tropical sunsets.

Man, that would be soooooo cool!

 

[Vagabond]

I don't have a problem with outsourcing but I do have a problem with companies like SBC who lie about it. If they outsource and admit it fine. But, when they are taking steps to fool people into thinking people in India are Americans it's not.

 

[Zep]

Apart from personally considering that outsourcing overseas is a short-sighted solution to some long-term problems, it's hardly been a new phenomenon either. The vast majority of retail computers are not made in the USA at all. Both component manufacture and assembly have been happening in SE Asia and Korea for many years - decades even.

Just back on outsourcing, it's been noted that Indian costs to operate (wages and infrastructure) are now rapidly approaching those in the outsourcing countries, making them less desirable economically (which is all that matters). The Indian businesses have been making the most of the profit from the outsourcing boom. This suggests that there may soon be other target nations and regions for outsourcing to instead - most indications are that it will probably be China...

 

[TragicMonkey]

I don't have a problem with outsourcing but I do have a problem with companies like SBC who lie about it. If they outsource and admit it fine. But, when they are taking steps to fool people into thinking people in India are Americans it's not.

Ever have to call Microsoft tech support? I had to call dozens of times in my last job. I always got some guy with an Indian accent thicker than Apu's, who insisted "Hello, my name is Chad!" Or Jordan, Davey (Davey?), Mickey, or Josh.

I'm all in favor of multiculturalism, but it strikes me as really unlikely that there are so many Chads and Joshes kicking around in New Delhi.

 

[Vagabond]

Ever have to call Microsoft tech support? I had to call dozens of times in my last job. I always got some guy with an Indian accent thicker than Apu's, who insisted "Hello, my name is Chad!" Or Jordan, Davey (Davey?), Mickey, or Josh.

I'm all in favor of multiculturalism, but it strikes me as really unlikely that there are so many Chads and Joshes kicking around in New Delhi.

There aren't, I saw a show where it showed them being trained and taking american names. To me this is no different than sticking a "made in america" label on something made in china. It's deceitful and it is not capitalism to make a business decision that is likely to cause you a problem but avoid that problem by lying.

 

[bigred]

I'm not entirely sure what your rant is directed at. You're annoyed because people who are qualified to do a job are willing to do it at the (their) going rate?

Not at all. I'm annoyed that companies (actually, much moreso our gov't) is looking at short-term gain vs long-term damage to the US in terms of lost jobs.

You think it's a bad thing that "30% of the world's top CEOs will be from countries other than the United States"? This is quite unreal. There are 6 billion people in the world, and you think that all the rich ones should live in the US? Or you think that all the ones in the US should be rich? Is an accident of birth to dictate whether you live a privileged life of wealth and abundance, as opposed to poverty and starvation?

No, I misread that part, beg pardon. I read it as 30% of top American CEOs would be "out-sourced," for lack of a better term. I hereby retract that part of the rant.

The outsourcing makes those companies richer. It is the industry of the US that is rich, and it is irrelevant to them whether the people are or not. That has ever been the case, and if it takes this (outsourcing) to make you realize it, all the better. (add'l counter-rant snipped)

I hardly consider taking so many jobs away from Americans and dumping them overseas just to make a quick buck "better" and it amazes me that anyone would, beyond the obvious (ie the companies).

As for being ungrateful about the lifestyle I have as an American, lol. Hardly. In fact I'd say I appreciate quite a bit more than the majority of Americans, and I don't say that to imply I'm so great either....but my impression is many, MANY Americans either don't really grasp how good they have it or more or less do but are ungrateful anyway.

Anyway, apologies if this rant of my own seems a little combative.

Appreciate it, but no need. I have pretty thick skin.

 

[bigred]

Apart from personally considering that outsourcing overseas is a short-sighted solution to some long-term problems

Bingo.

Although I'd say not long-term "problems" but rather long-term GREED. Yeah I know our capitalistic ways kinda breed that by definition, but that doesn't mean it can't go too far. Show me a candidate in 08 who is against this and I'll show you a guy who is close to locking up my vote.

And yes, I would be glad to pay more for things if that's what it took to stop or at least greatly curtail out-sourcing gone amok.

 

[Vagabond]

Bingo.

Although I'd say not long-term "problems" but rather long-term GREED. Yeah I know our capitalistic ways kinda breed that by definition, but that doesn't mean it can't go too far. Show me a candidate in 08 who is against this and I'll show you a guy who is close to locking up my vote.

And yes, I would be glad to pay more for things if that's what it took to stop or at least greatly curtail out-sourcing gone amok.

It's only a short term solution too. If it continues they will eventually hire as many of the Indians as they can, which will drive up wages. As the economy improves from the influx of money it will drive up wages as well. Then it won't be so favorable.

 

[Rat]

It's only a short term solution too. If it continues they will eventually hire as many of the Indians as they can, which will drive up wages. As the economy improves from the influx of money it will drive up wages as well. Then it won't be so favorable.

And, to play Devil's Advocate, where's the problem? The wealth of a quasi-Third World country is improved, along with the standard of living. Maybe then the out-sourcing companies can then go and hire people from another Third World country. It's like charity from big business, propping up the economies of the poorer nations until they can stand on their own two feet.

Obviously, I'm being facetious. But I genuinely don't see the problem. People are willing to do your job for less money than you. Is there anything other than self-interest driving your dislike of it?

And I doubt that the billion Indians will all be in call-centres and the like in the very near future.

Cheers,
Rat.

 

[gnome]

My problem is less one of self-interest than, perhaps ego... or if I want to be kind to myself--believing in the importance of my field.

I work in tech support. Fortunately, it's internal (I work for the company I support), and so far they're smart enough not to farm it out. When I think of outsourcing for cheap labor, I also think of substandard quality. I like my job, I think it's important, and to send it out to script-trained operators working for peanuts, would make me feel as if my actual experience wasn't important.

In practice, I worry that it will result in an availability problem for genuine technical support, by people that actually understand the computers. On a fundamental level that bothers me.

 

[Cleon]

Well...To be perfectly frank, I just don't buy it anymore.

For the past five or so years, the business press has been crowing about how offshoring is about to skyrocket. Meanwhile, many companies that try ambitious offshoring projects wind up having to scale back; the only permanent projects that seem to stay offshored is minor call center work (customer service, 1st-tier tech support, etc). Even then, they don't do so well in the quality department.

Frankly, I just don't see this as being a threat to that many middle-class jobs. As a web app developer, I stopped worrying about this about a year ago. Maybe I'm wrong, but the "everyone will lost their job to India" doomsayers have been at it a while, and it has yet to come to pass.

 

[TragicMonkey]

Well...To be perfectly frank, I just don't buy it anymore.

For the past five or so years, the business press has been crowing about how offshoring is about to skyrocket. Meanwhile, many companies that try ambitious offshoring projects wind up having to scale back; the only permanent projects that seem to stay offshored is minor call center work (customer service, 1st-tier tech support, etc). Even then, they don't do so well in the quality department.

Frankly, I just don't see this as being a threat to that many middle-class jobs. As a web app developer, I stopped worrying about this about a year ago. Maybe I'm wrong, but the "everyone will lost their job to India" doomsayers have been at it a while, and it has yet to come to pass.

All the programming messageboards I frequent are full of desperate pleas from people with Indian names wanting to know how to do basic, basic stuff. In a hurry. "Please I am have to do a big progect it is database in Microsoft SQL Server of a one hundred million records please how to make the tables?" And people posting a thousand lines of code in VB, wondering what's the problem, and it turns out to be a missing "End If".

Maybe it's too soon to worry.

 

[bigred]

I genuinely don't see the problem. People are willing to do your job for less money than you. Is there anything other than self-interest driving your dislike of it?

Other than being annoyed at the short-sightedness of it? Not really. So?

In fact, when you really get right down it, is there anything other than self-interest driving anyone's dislike of anything?

 

[Rob Lister]

Other than being annoyed at the short-sightedness of it? Not really. So?

In fact, when you really get right down it, is there anything other than self-interest driving anyone's dislike of anything?

I'm not at all sure it's shortsightedness. Perhaps it is shortsighted to think that a corporation should pay x2 dollars for a service when that service is available for x dollars. If the corporation decides to pay x2 dollars to appease the likes of you then they are, in effect, paying x dollars in some sort of patriotic tax, which has nothing to do with the stock holders, to whom they are ultimately responsible. Perhaps biting the bullet and paying that patriotic tax will net them something in 'reputation' but unless that something equals x it isn't worth it.

 

[Vagabond]

And, to play Devil's Advocate, where's the problem? The wealth of a quasi-Third World country is improved, along with the standard of living. Maybe then the out-sourcing companies can then go and hire people from another Third World country. It's like charity from big business, propping up the economies of the poorer nations until they can stand on their own two feet.

Obviously, I'm being facetious. But I genuinely don't see the problem. People are willing to do your job for less money than you. Is there anything other than self-interest driving your dislike of it?

And I doubt that the billion Indians will all be in call-centres and the like in the very near future.

Cheers,
Rat.

They have far fewer college grads per capita than the US does because nobody has any money to pay for it. Right now you can hire a college grad in India for 40 bucks a week. I don't know exactly how many there might be but a tiny percentage of a billion. A few million at most.

 

[Vagabond]

My problem is less one of self-interest than, perhaps ego... or if I want to be kind to myself--believing in the importance of my field.

I work in tech support. Fortunately, it's internal (I work for the company I support), and so far they're smart enough not to farm it out. When I think of outsourcing for cheap labor, I also think of substandard quality. I like my job, I think it's important, and to send it out to script-trained operators working for peanuts, would make me feel as if my actual experience wasn't important.

In practice, I worry that it will result in an availability problem for genuine technical support, by people that actually understand the computers. On a fundamental level that bothers me.

Well, having done tech support for SBC DSL. They provide 3 weeks of training and a month to two months of on the job training. I was an actual computer tech so I was able to handle calls at less than half the average time. But, it's not necessary in order to help the customers. It just takes them longer. I wouldn't say they were providing bad service in any way. Could they do better certainly but it would cost a lot more.

 

[bigred]

I'm not at all sure it's shortsightedness. Perhaps it is shortsighted to think that a corporation should pay x2 dollars for a service when that service is available for x dollars. If the corporation decides to pay x2 dollars to appease the likes of you then they are, in effect, paying x dollars in some sort of patriotic tax, which has nothing to do with the stock holders, to whom they are ultimately responsible. Perhaps biting the bullet and paying that patriotic tax will net them something in 'reputation' but unless that something equals x it isn't worth it.

....never mind that the level of service can often be inferior. Ever tried to have a conversation with customer service via "Fred" Maharaja?