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How Outsourcing Affects IT Jobs

The trend of moving information technology (IT) jobs to low-wage foreign countries is expected to grow dramatically in the next few years.

This trend is called offshoring. It means that instead of competing with other job seekers in your own country, you will compete with skilled workers from all over the world. And many of them are able to work for a much lower salary than you.

"In today's global economy, jobs are located in the area of the world where they can be performed the most effectively and at the lowest cost," says Barry Gander. He is the executive director of a technology alliance.

"This is true in many fields; for example, manufacturing. But it is also true in IT."

Say you wanted to get your Nintendo Wii repaired. There is a company down the street who can fix it for $50. There is another company across town willing to do the same job for $10. Who would you rather hire? If you were interested in saving money, you would give the job to the company across town.

IT companies are making the same decisions. They're looking all around the world for the best ways to save money on labor.

Many of these organizations are building centers of their own in lower cost locations, such as India or China. Employees there take over certain jobs and do them for a lot less money than a North American worker.

Another trend affecting IT jobs is outsourcing. Outsourcing is not the same as offshoring, but they are often confused.

Outsourcing is what you do. It's when you give work to a supplier outside your own organization and then buy the product or process from that supplier.

Offshore is how and where services are delivered. When organizations offshore, they set up offices in different places to save money.

Not all IT jobs can be done from a distance.

"The IT jobs that should be performed in [North America] are those that need to be close to the business to be effective; for example, defining the architecture or business requirements for a new piece of software," says Gander.

"This is because to be effective, the people in these jobs need to have frequent, detailed interactions with the business people located in North America.

"Jobs that can be performed overseas are those that are more generic or independent; for example, converting a piece of software from one computer language to another," he explains.

"Here, the need for interaction is less, and the economies of doing the work offshore make this a good option."

Although some Canadian jobs are being sent to overseas, low-wage locations, Canada itself is a lower wage location for some American jobs.

"While Canadian costs are not as low as places like India, there are many advantages for U.S. companies who send their IT work to Canada. The cultures are similar, we are in the same time zones, we are politically stable and we are easier to get to. Canada also has a wealth of highly skilled and knowledgeable IT professionals."

The fast-paced nature of a career in IT makes it a career for those who are adaptable.

"Change will be a career-long theme for anyone in IT," says Gander.

"IT professionals must constantly be aware of the direction the industry is taking and the new technologies that will be the mainstay of the next generation. They must continue to invest in themselves through training programs and by seeking out the new and challenging opportunities."

Skills are not something that you can learn once and forget about. You need to keep learning to be an in-demand worker.

"Skilled workers are absolutely essential," says Keith W. Fiveson. He is the managing consultant of IT Enabled Services Alliance (ITESA) in New York.

"Individuals should have several skills to compete, in areas like biotechnology, logistics, medical sciences and so on."

Teams based all around the world are delivering IT services.

"To work well in this environment, people will need to be able to work with different cultures, appreciate different decision-making styles, and learn to leverage diversity," says Darren Meister. He is the author of a report on outsourcing.

If you're interested in pursuing an IT job, plan for the realities of offshore competition. Make yourself valuable to your company on home soil.

"IT professionals are increasingly developing a 'double major' approach. That is, [they are] building expertise in both a technology area and a business area," says Gander.

"IT professionals must no longer be pure technologists. And they can no longer be business generalists. They must cultivate their knowledge of a specific business area with the same intensity they apply to their technical skills."

Meister recommends reading the general business press. Looking for factors that will affect job prospects.

"Stay in tune with which industries are growing and which are shrinking. Watch for companies that are being celebrated for their use of IT, then think how others like them could apply similar technologies," says Robert W. Scott. He co-authored the report with Meister.

In the end, it is in your hands to find a way to succeed.

"Seek out opportunities to learn about the businesses you serve and new technologies, and remember that you are competing in a global marketplace," says Scott.

"If you are not the best you can be, it's likely that someone, somewhere in the world will be better."


E-Commerce Times
Keep up with all the latest in IT news

Business Week
A good place to keep up with the general business press

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