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Tips for techs: Keeping your livelihood alive despite IT offshoring

Information technology jobs rank high on the list of those most likely to be outsourced to other countries, and thousands of such jobs have been "offshored" in recent years. Despite the trend, there are ways to cut the vulnerability of your IT position, according to Benjamin Shao and Julie Smith David, two professors of information systems at the W. P. Carey School of Business. They offer job-saving tips for techs in a recent paper on the impact of offshore outsourcing.

2007-06-20

Computer programming topped the list of 22 job categories ranked according to "offshorability" by Princeton University Economist Alan S. Blinder in a paper he released last March. Blinder estimates that up to 29 percent of all U.S. jobs could be potentially offshorable in the next decade or two. He doesn't say the jobs necessarily will be sent overseas. He merely thinks they could wind up earning some lucky workers rupees or pesos instead of dollars and cents. Computer systems analysts were number three on Binder's list. Support specialists, application software engineers and systems engineers ranked six, seven and eight on his inventory of potential job insecurity. This probably comes as no surprise, considering that 528,478 U.S. "tech" jobs were outsourced to other countries — or offshored — between January 1, 2000 and June 13, 2007, according to TechsUnite.org, a would-be union-forming affiliate of the Communications Workers of America. Despite the trend, there are ways to cut the vulnerability of your IT position, according to Benjamin Shao and Julie Smith David, two professors of information systems at the W. P. Carey School of Business. They offer job-saving tips for techs in a recent paper on the impact of offshore outsourcing. Face IT realistically Economics are one driving force for this phenomenon. Companies are competing globally, so they have to keep their costs down, notes Shao. Offshoring allows them to do that. Technology helps, too, he says. "Before the Internet era, it was very difficult to manage a project on a global scale. Now it is very easy to do. The Internet opened up the labor market from a local or national resource to the global level." Plus, offshoring is maturing as a business practice. Although "the first generation of outsourcing usually is done for lower prices, follow-up generations have to provide as good or better quality, or people won't continue outsourcing," David maintains. At this point, "areas of the world are strategically focusing their educational efforts and corporate influences" such as taxation policies on "creating pockets of expertise," she adds. As an example, David points to the Philippines, where call-center outsourcing has become a national point of pride. According to thenewstoday.info, an online Filipino news source, the nation's "technology-enabled services" are projected to directly engage 1,082,800 workers and generate $12.2 billion in U.S. dollars by 2010. This growth is mainly driven by call centers, the online source claims. To support the call-center industry, trade unions are pushing for increased government support of skills-training programs. Shao points to another sign that offshoring is evolving: "Those big outsourcers in India now are starting to outsource their own jobs to cheaper countries," he says. Backing that statement up, Forbes recently reported that Tata Consultancy Services, one of the biggest outsourcing organizations in India, announced intentions to hire 5,000 workers in Mexico over the next five years. This will occur partly because skilled workers are getting harder to find in India and partly because both the rupee and wages are on the rise there. Mexican salaries will be higher than those in Tata's home nation but lower than those in the U.S. Get creative Given the inevitability of offshoring, as well as its changing nature, what's a job-threatened IT pro to do? David and Shao say its time to get creative. "You need to constantly be scanning the horizon to see what changes are emerging and how you might deliver value for your company with new technology," David says. As an example, she cites a recent meeting she had with executives from U-Haul International Inc., the do-it-yourself moving company with the world's largest truck-rental fleet. As part of her presentation to U-Haul leaders, David showcased dodgeball.com, a teen "hook-up" site that harnesses social-networking software and global-positioning-system chips in cell phones to help people keep track of each other. The service broadcasts text messages on behalf of users, provides addresses when users type in a business name and sends alerts if someone the user has a crush on is no more than 10 blocks away. David says she didn't expect dodgeball to have "any relevance to U-Haul." She showed it simply to demonstrate innovative uses of technology. But, as soon as he saw the site, Joe Shoen, U-Haul's CEO, instantly made a connection himself. According to David, Shoen explained that many U-Haul customers do multi-truck moves and, often, drivers lose track of each other. He realized that dodgeball-style technology could help movers stick together on the road, thereby solving a common problem for his customers. "Shoen saw this as a way to differentiate his company and provide better customer service," David says. She believes this is the type of technology watching and creative thinking that can keep IT people valuable, relevant and employed. She also maintains that IT professionals need to understand the business as a whole, including its strategies and how technology can contribute to them. Top titles Being creative and business-savvy isn't the only way IT professionals can help outsource-proof their jobs. Another is to be in the right place at the right time, which requires knowing what the right place might be. Shao and David have a few ideas. For one thing, Shao recommends workers try to "jump up to the next rung of the IT ladder before your competitors can jump with you." Specialized skills will go a long way to adding job stability, he maintains. For instance, if "you know how to integrate a large system with components supplied from around the world, that would be very valuable." Liaison skills, too, could be a hot seller. When you "know where the best IT sources are, and you know how to match those sources to needs, you become an intermediary to bring potential buyers to potential suppliers," he adds. Certain areas are likely to be safer than others, also. "Think about what might be the potentially risky functions to offshore," David says. She names things like human resources, customer records-keeping and storage of customer credit information as things companies might be squeamish about sending overseas. According to her, many companies are saying they won't put their customer data "anywhere other than a place where they can understand legal ramifications, look at the data, access the server and understand the culture" of people who will be shepherds of this vital corporate information. Security will likely remain a domestic profession, too, "because you have to be right there, like a firefighter," Shao says. He cites disaster recovery and business-continuity planning as examples of security-related job areas likely to remain in the U.S. Also, having a job that requires face-to-face contact with customers will up your chances of keeping your position: For example, in a traditional systems-development cycle, the folks who interact with end users, identify their needs and convert those needs into technical requirements will likely remain on the job. So will those who pick up the development project on the back end to do things like implementations and user training. "The middle part will be outsourced," Shao maintains, since design of the system architecture and code work could be done anywhere. Considering the types of jobs that are likely to remain valuable, it's not surprising Shao thinks personality and people skills will count in the coming IT environment. That's why he warns that people shouldn't be "IT obsessed" souls who "want to focus on technology alone." He guesses that about half of IT professionals might qualify for the "obsessed" label, and the percentage might be higher for those new to the game. Entry-level people are more fixated on "new technology or next-generation hardware and software," he explains. As you advance in IT, you realize you have to expand your skill set" to include "soft skills" such as communication and negotiation, he adds. "In the past, those skills became important only after you had advanced your career path," but those days are now done, Shao concludes. "With the paradigm of offshoring, you probably should expand your IT portfolio to include those skills earlier — not later — in your career." Bottom line

• Offshore outsourcing is here to stay, but there are ways for IT people to safeguard their jobs.
• Knowing the business and how to add value to it will help IT workers remain relevant and valuable.
• Soft skills, such as communication and negotiation, will be increasingly helpful.
• Certain job areas will be more stable than others. Look for work associated with security, face-to-face contact with users, as well as functions that might be risky to offshore, such as HR or customer information systems.

Step one to meeting the threat of offshoring is simple: accept that the trend is happening, and it's not likely to end.

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