For years now, it’s been an article of faith that one of the most solid career paths for college students is computer science. After a week talking with IT executives at the Enterprise IT Week show, I think that conventional wisdom needs updating.
The major issue facing every IT executive is outsourcing. Maybe it’s managed services where everything from the voice network to the e-mail server is entrusted to a supplier. Or maybe it’s application development turned over to a third party who promises coders who work cheaper and all through the night.
No one should be surprised by these trends, but I’m stunned at the extent to which people are talking about outsourcing services. And not just hosting application servers at co-location facilities. We’re talking about projects that require human capital.
Gordon Brooks, president and CEO of E5 Systems, an IT outsourcing company, says U.S. companies outsource roughly 8 percent of IT services today. That sounds about right. But I don’t think many people are prepared for what’s about to happen. Brooks believes IT services outsourcing will hit 55 percent within five years. Putting that trend into raw numbers, Forrester Research projects that nearly 1 million U.S. IT jobs will move abroad in the next 15 years.
You don’t have to look too far ahead to see what’s happening. Over the last couple of years, Jeff Campbell, CIO at Burlington Northern and Santa Fe Railway Company, has traveled to China and India where he’s found educated, conscientious, hard-working developers happy to earn $15 an hour to write code.
In the railway’s case, the shift to overseas programming hasn’t resulted in job losses at the company. The outsourcing provides savings that make it possible to get more from new projects that are currently underway. Right now, the company is investing in WiMax and RFID technologies.
Outsourcing also provides flexibility. Putting aside the fact that outsourcing work spares companies from employment commitments to salaried employees, it also also means extending the work day as U.S. workers can review code during the day and have it revised overnight.
When we’ve published stories about the trend in the past, we have touched some raw nerves. We’ve received plenty of e-mail from people who feel threatened.
When faced with change, we all have the choice to ignore or embrace the trend. For people who have devoted years to mastering IT skills, outsourcing can be unnerving. But it doesn’t mean your career is in jeopardy. IT services are now the backbone of the world economy. There is no retreat from the billions of dollars committed to networks, database warehouses and application infrastructures at any U.S. company. The investment made in IT knowledge demands protection.
The opportunities for American IT workers will be in management. The code written outside the company needs to be reviewed and approved before it can be deployed. Outsourcing contracts must be negotiated and enforced.
People with technical skills will need to manage the relationships with suppliers. They’ll also have to help their companies understand how to use technology.
Adapting to the new reality will mean different things for different people. Accounting and marketing skills may become more important than learning a new programming language.
The only thing certain is that the outsourcing trend is accelerating. IT managers who are thinking about the future need to look outward.
Gus Venditto is the editor-in-chief of the internet.com and Earthweb networks.