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Offshoring IT
Bill Blunden is the author of Cube Farm - a humorous autobiography and story of author's fruitless employment at Lawson Software. A physics major faced with the grand prospects of waiting tables after college graduation, Blunden is not a newbie in the unemployment world. Offshoring IT promises to give the reader "the good, the bad and the ugly" of IT outsourcing practices.
The book is not very long -- just five chapters -- but it's thorough, as each chapter packs data and statistics from various government and commercial reports. "Setting the stage" talks about general trends in the software industry and cost of education. "Measuring the trend" tells the reader which companies outsource, why they outsource and who's helping them with outsourcing. "The Offshoring Obstacle Course" describes existing outsourcing processes - when exactly should company start thinking about outsourcing, what type of jobs is most likely to go offshore, what's the difference between India, Ireland, Israel, Russia and Mexico. Finally, "Arguments in Favor of Offshoring" made it into the book just because the publisher requested a fair look at the other side's arguments (which shows which "side" Mr. Blunden is biased towards). "Arguments Against Offshoring" is truly the author's work with major myths and excuses about offshoring debunked.
Blunden points out that in order to compete in the global marketplace, countries like India invested in their educational system and constructed high-speed data networks, which provided the foundation for companies popping up with the capability to take over remotely as call centers, software development houses, and R&D departments. Meanwhile, the cost of going to Ivy League schools keeps going up, leaving the fresh graduates with six-digit debt -- debt which the Student Loan Corporation (division of CitiCorp) expects to be promptly paid. The cost of college education for those who choose to go this route stipulates adequate pay requirements after graduation, and in the world where IT is going offshore, the paycheck is often just not there anymore, which leaves the fresh grad owing money and needing immediate retraining or a career switch.
The book delves into specific industries and companies, looking at the outsourcing numbers and potential for jobs to be offshored. Blunden notes that while corporations made their offshoring figures public before, lately the backlash against going offshore has made PR departments suddenly avoid the topic. Blunden refutes the argument that only low-level jobs are being outsourced and points to Intel designing CPUs for wireless devices on campuses in India.
Chapter 3 focuses on reasons for outsourcing. According to Blunden, the more face-to-face interaction and management effort a job requires, the less likely it is to be outsourced. At the same time, many companies are currently exploring offshoring some of their projects, claiming that only non-essentials are going abroad. Outsourcing of small projects allows them to establish the necessary processes and test their service provider, so that when a bigger project comes along, the management can feel safer working with the same offshore provider.
Chapter 4 deals with pro-offshoring arguments. Even though the author states he only had to write this chapter to satisfy the publishers, the arguments he picks are ones that appear in the press quite often - namely, that offshoring means more efficient allocation of resources, better revenue projections, and increased shareholder value. In Chapter 5 Blunded goes on a crusade to discredit these arguments, though, saying that offshoring does not benefit average Americans, that only the top 5% of income earners benefit from increased shareholder values, and that frequently top management receives additional benefits while laying off the proles.
While the first two chapters of the book are filled with data, numbers and statistics, the last three chapters mostly read like an rant on the current state of affairs, which many of us may have gotten for free from the older members of the family at Thanksgiving. Blunden does have some valid arguments about the increased danger to national security and wealth due to offshoring, but you can't help but notice the feeling that the author feels entitled to a job provided by an American corporation, even though corporate America is bad-mouthed in the next sentence. To give Blunden credit, he mentions that sometimes reasons for offshoring include the low popularity of call-center and data-entry positions in the U.S. Americans view doing support for AOL and data entry for Cingular as grunt jobs, just temporary positions on the way to a better life, while for many Indians it is the ultimate career, and are thankful to the provider for giving them the opportunity.
Blunden also does not distinguish between different types of IT workers. The aforementioned AOL support soldier and top NASA scientist, designing microcontrollers for the next space mission would be aggregated into the same "IT worker" category. There's little detailed statistics on what sectors of IT are prone to outsourcing and which are pretty stable to be in. Sometimes the author plays little tricks with the reader to make his points across. On p. 106 he talks to an invisible IT manager: "Sure, you can hire six Indian engineers for the price of an American engineer. But if an American engineer can do the work of six Indian engineers, what's the difference?" Oops. Notice how by the time we get into the second sentence the equality in price gets substituted by equality in productivity. Just because 6 Indian salaries would equal to one American, the author assumes the productivity level is going to stay the same, making the example nonsensical, since why would you outsource if it's the same money and the same productivity?
Overall, it's an interesting book to read, although somewhat depressing, as it provides little pointers into how do the readers stay competitive in this marketplace or what needs to be done on the personal skills level to make oneself more valuable. You can definitely tell which side the author is leaning, but subjective writing makes the reading more interesting. Nevertheless, the title does leave an impression of being one giant complaint about the current state of affairs, and I don't think I will be re-reading it. Perhaps just loan it to my friends, who are in college pursuing IT-related careers.
In an attempt to stay up-to-date with his skills Alex reads and reviews many programming and technology as well as keeps the list of free ones available on the Web. You can purchase Offshoring IT from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.
I've been in the IT industry for 14 years and it has been extremely lucrative for me. I do not recommend anyone to get into the IT field if they're going to be entering the job market 4 or 5 years from now though. I think that the combination of outsourcing along with the increasing ease of doing complicated tasks with computers will lead to a bleak job future for IT-specialized staff. I think that more and more administrative tasks will be pushed onto what are considered today end users today.
As for recommendations (which this book reportedly lacks)... Study business. Be the person that's sending jobs overseas or setting up your own plug and play wireless network.
I'm a big tall mofo.
It is not a debt, it is a trade imbalance. Everyone is getting paid at the end of the day, so its not a debt. It is just that the money paid out to China for their goods far exceeds the money that China is paying for USA's goods.
The flu vaccine is a special case, since Clinton's administration passed several laws that made american companies liable for civil suits for the effectiveness of their flu vaccines... if the drug doesn't cure you, you're sued, yeah, that's a good deal... so the drug companies moved on to other goods.
I think its you who is confused. Yes there is a Trade defecit. But there is also a large debt. China and Japan own a third of the American government's debt. i.e., they own certificates that allow them to call in as they please a third of the current national debt (nothing to do with the trade imbalance, thats just more bad news). Americans have been living beyond their means for a significant period of time now. You simply don't pay enough in taxes, its as simple as that.
So far, so bad. But you might also like to consider that they can ask that the debt be repaid in a currency of their choice. Consider what that would mean.
Well, a few points here:
-Trade can also include services. And software is also a good. Also, if Indians aren't buying manufactured goods in exchange for their software/services, they are accepting US Dollars, which is the same.
-Yes, India is a protectionist economy, but USA is very protectionist too. Yeah, they can sign free trade treaties left and right, but they are full of exceptions, and caveats. Also, whenever some USA's group feels treatened by free trade, they are quick to start lawsuits against their foreign competitors. Lawsuits can ruin a lot of business (especially agriculture, where the goods won't last the years that a suit usually takes).
Is that the considered opinion of an afficionado of the Pimp's 'n' Ho's website?
Perhaps because women are far more interesting creatures than men, and because bringing up kids while you're still young enough to pick them up is one of the best experiences life can give? And yes, I have tried mountaineering, racing cars, snorting coke and drinking enough to keep a brewery above water for a year. It gets old, real fast - long before I did.
Seriously, guy, I hope you meet someone to love. It puts all this hacking and money shit into perspective. It's just a job, man...
--Ng
It's interesting to me that you mention CitiCorp. I am currently a contractor with Citibank. The Citi Cards division recently got a new CIO, Mitchell Habib, formerly of GE Medical.
a ses/200204apr/pr_20020411.htm 2 301385.cms
His new plan is to outsource all contractors to India. At GE, he reduced 70% of the staff through outsourcing and it looks like he'll do it at Citi too after he's done with removing the regular contractors.
I'm just glad I already found a new job.
Here are some links about the GE outsourcing.
http://www.prdomain.com/companies/t/tcs/news_rele
http://economictimes.indiatimes.com/articleshow/4
http://www.tcs-america.com/news/011404.html
Being Indian, I have to protest against this. India is a Sovereign , Secular, Socalist country by definition. That spells out to "We won't let other countries screw us" as part of government policy. Thankfully the government seems to be keeping that promise to a large extent.
From 1950 to 1991 , India was a protectionist economy . In 1991 the globalization initiative (due to the influence of USA , no less) , hit India along with a finance minister (Manmohan Singh) who knew what he was doing. Almost all trade restrictions on exporters and importers were taken off between 1991 - 1997 . And what you are seeing today is the result of that liberalisation.
America has dished out a lot of Free Trade agreements and then screwed a few foreign industries as well - Canadian car industry would be an excellent example. America used protectionist strategies to let Detroit sell cars by raising tarriffs on Japanese cars. America too has been a protectionist economy and almost destroyed it's economy (still is trying to repeat that according to US Federal Reserve Chairman Alan Greenspan).
The really ironic part of your comment, is that India has profited more from dropping their Nehruvian protectionist policies than from anything else since Independence.Quidquid latine dictum sit, altum videtur