Don't Be a 'Victim' of Globalization

It's fruitless to resist IT globalization on the grounds that it's not 'fair' or even 'American.'

September 2, 2003

3 Min Read
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Although the world isn't quite so black and white, most IT professionals would place themselves in or near the victim camp. Whether you work for a Fortune 1000 multinational, a government agency or a midsize company, you've probably seen one IT initiative or another shipped to an overseas firm during the past year--and then had to adapt. Overseas outsourcing can cut the cost, shorten the time to market and improve the quality of application development and other IT projects, but it obviously hurts the people being replaced and takes a toll on colleagues who must then manage the projects from afar. It's something of a cruel irony for U.S.-based tech professionals that IT advances--better, cheaper, more secure communications links, improved collaborative applications--are making it easier for U.S. companies to replace some of their indigenous employees with contractors abroad.

But it's fruitless to resist IT globalization on the grounds that it's not "fair" or even "American." Fact is, India, China and other rapidly developing countries are turning out engineers and computer scientists a lot faster than the United States is. Although certain state legislators might try to make it difficult for agencies to contract with offshore IT firms, no law or union or campaign will keep companies from seeking out the least expensive, most effective means to deliver technology and other business innovations. While U.S. companies can cut an IT project's labor costs by as much as 40 percent by shipping work abroad, overseas services firms aren't just high-tech sweat shops. Their strict process controls often yield better quality, customers and other experts say.

Still, U.S. companies must develop an IT outsourcing strategy for more than the basic proposition of reducing costs while increasing value, says Philippe Courtot, CEO of California-based information security company Qualys. More important is the longer-term benefits of what Courtot calls "second-degree outsourcing"--companies looking to sell into the likes of India and China must gain a better understanding of and an investment beachhead in those markets by tapping into their labor and expertise. U.S. companies can't expect to do much business in those countries if they're not active participants there.

Of course, there are downsides to farming out IT and other work abroad. Time-zone, language and cultural differences sometimes make it difficult to manage projects from the United States. Political instability in a developing country can mangle the best laid plans. Quality, while often superior, isn't consistent.

But being antiglobalization makes about as much sense as being antievolution. Foreign outsourcers are an easy target for the U.S. IT professional worried about his or her job security, but they're not single-handedly responsible for rising IT unemployment in the United States over the past three years. A lackluster economy and previously bloated IT spending are the main culprits there.U.S.-based IT professionals should focus instead on making themselves indispensable. Learn new technical skills. Embrace your company's business goals. No outsourcer can understand your company's needs better than you can. Leverage that inside advantage, even if it means you might end up working hand in hand with an overseas outsourcer yourself.

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