Gartner: Offshore or Lose
April 5, 2004 Alex Woodie
Companies and individuals that want to survive should consider how they can move technology jobs offshore, Gartner chief executive officer Michael Fleisher said last week at the Gartner Symposium in San Diego. In no uncertain terms, the head of the industry’s leading IT analyst group gave a rousing thumbs-up to the controversial practice that has sent more than a hundred thousand American tech jobs overseas, and will undoubtedly take many more.
In this election year, the growing movement of high-paying technology jobs to low-wage countries such as India and China is hotly divisive issue. A new study just released by the Information Technology Association of America says that, between 2000 to 2003, 104,000 American technology jobs, or 3 percent of the total, were outsourced to low-wage countries, such as India, where programmers are paid one-sixth what they are in the U.S. The ITTA says the flow of money for offshoring will increase an average of 26 percent per year through 2008, when $31 billion will be spent.
In his keynote address last week, Fleisher encouraged attendees to look beyond the fear and blame that has been directed at offshore outsourcing, especially by politicians who equivocate offshoring with treason. “We all work in a highly competitive global marketplace,” Fleisher says. “This is the world we have created for ourselves . . . Nobody’s at fault. It’s an inevitable outcome of today’s global marketplace.”
Fleisher presented an optimistic view of offshoring, and said there is nothing new about job losses created by technology. Americans have managed to make themselves employable as technology caused massive shifts in employment patterns, from agriculture to manufacturing, and from manufacturing to services. The Internet-fueled shift in white-collar IT jobs based here is no different, and in any event, the new jobs created today by offshoring will be gone in a few years anyway, he said. Besides, the United States is the best at adapting to changes like these, he said. “The countries that win will have populations educated at the highest levels,” he said.
Fleisher’s positive view of offshoring is backed by the new ITAA study, which found that offshoring, in the end, “increases the number of U.S. jobs, improves real wages for American workers, and push[es] the U.S. economy to perform at a higher level.” The study also found that the activity of “worldwide sourcing of IT services and software” (the ITAA term for offshoring) actually created 90,000 U.S. jobs last year, and will create another 225,000 new jobs by 2008. These are the jobs that Fleisher encouraged Gartner Symposium attendees–who are IT professionals and IT executives at some of the largest companies in the country–to seek by retraining and educating themselves on outsourcing and offshoring strategies.
When it comes to offshoring at your company, don’t be a deal inhibitor, Fleisher advised. Instead, “become an authority on sourcing strategies” by educating and training yourself on the issues and the technologies that allow it to happen. “CIOs need to become outsourcing authorities that companies can’t do without,” he said. “If you don’t move to direct sources in your organization, you’ll be bypassed by other executives.”
Instead of complaining about offshoring, Fleisher encouraged attendees to become masters of outsourcing and offshoring strategies, and to turn potential negatives into positives for themselves. These are issues that “tech executives are uniquely qualified to meet,” Fleisher said. “You know how to do it better than anybody else in your company. That’s why you are qualified to lead this charge.”
At times, Fleisher’s keynote sounded like something one might here at a motivational seminar given by somebody like Tony Robbins. He told the audience that “enormous wealth on a global scale” is at stake here, and with the right “wisdom,” “vision,” and “understanding” you can “dominate” the next generation of jobs by effectively wielding technology in pursuit of offshoring. “The future will be bright indeed for those who understand and exploit this technology.”