IT Offshoring, and why it is a bad idea.

August 10, 2003

We all know of the benefits of out-source information technologies overseas, to foreign markets where companies can have a competitive edge in labor markets, manufacturing processes and less government restrictions. One can even argue in favor that global economization of such markets brings the third world up to a higher standard of living and level off the planning field in regards to the United States. The cause and effect logic of moving jobs off-shore in the last twenty years has been that displaced workers will just need to retool and develop a new skillset to stay competitive in the United States markets. While this holds true for factory and manufacturing jobs, we are facing a very unique situation in todays markets. This situation is that the highly skilled jobs and executive positions are moving offshore. So I ask the question: When and where does this stop? What's left of our economy?! Once the jobs are taken overseas, and the infastructure of processes are in place over there. They will not come back.

So where are the professionals who have degrees, masters, and PHD's to go? Not alone that, but the talented individuals who have no degree but understand how technologies work and have proven industry experience. Another angle to this story, that has not been fully realized is world politics involved in such ventures. One side of the argument is that when the economic impact of bringing jobs, money, and prosperity to these nations it promotes a globalization of developing one inter-connected world “nation” with many different cultures, beliefs, and benefits. Once again, Corporate America will have invested interests in keeping these areas politically friendly to the United States government. So they spend tens of millions to make sure they have a handle in Washington and surrounding scenes. One aspect that hasn't been fully investigated is that when you are sending jobs, processes and infastructure offshore you are losing a bit of control. One can say that the risk-reward, cause-effect benefits are worthwhile. However, with the United States being in a post-9/11 aspect where we have a certain amount of undenialable vulnerablability. Not even that, but the very terrorist that hit our soils, now have even easier American interests to hit. We are taking the targets to the terrorists. It's a numbers game and is just a matter of time. Companies have not realized this paradigm shift. Companies can not sit down to drink tea with this terrorists. There are no defined rules or procedures that are there with foreign governments. It is a total x-factor. With one scenario is that they hit an IT shop in India, Ireland, or one of the other hot it-spots. Is the American businesses really ahead? Once again how much risk-reward is your company willing to take? All it will do is take one major incident and a company can be lost. With the knee-jerk reaction and mentallity in the United States, I doubt highly that there has been major consideration for this scenario. In addition to that if it hasn't been an after-thought, what kind of redundancy plans have been put in place. With all of these backups and procedures, are the companies really coming out ahead, to offset the “more expensive” US labor market

My bet, is that greed is in full throttle and they just throwing up these shops offshore, and do everything to cut costs to meet the Streets expectations. No consideration of security and the well being of these cheaper workers. How much are they really comparable to sweat shops? My thoughts, is that it may cost a little more to maintain IT shops here in the United States, but those costs are miniscal in comparison to the amount of knowledge, power, and control the company will have. Corporate America should not look so short term in regards to the greed and the evaluation of this “sexy” trend. But should really do what they need to do to keep their businesses safe and prosperious for this century and the next.