Friday, February 27, 2004

My Opening Volley in the Off-Shore Debate

I've read though Tom Peter's 16 hard truths about off-shoring and I've been keeping up on this debate in various other circles. This issue has a direct impact on my livelihood as my company is in the business of selling software solutions to US customers. Given my profile you would think I'd be on the "protectionist" side of this issue, but I'm not. Let's put aside the fundamentally flawed assenting that non-technology companies make trying to undertake large in-house software projects in the first place. Consider this. Large scale programming efforts, which are really the targets of off-shore outsourcing, are not intrinsically valuable to most organizations. It's grunt work that, like mass producing shoes, can no longer be done or justified at the costs here in the US. It was only natural that most companies which created huge IT departments during the arms race in the dot com era, would then shed these human resources when the bubble burst. It's also only natural that all the people that went into the IT business, back in the dot com era, who we're really not suited for the business in the first place, find themselves hard pressed to find a job when there is such a glut of programmers in the market. My advice to them is to stop being shoemakers. Kiss your cubicle goodbye. The jobs aren't coming back. The industry has changed. So what do we do? The key is innovation. It may sound trite but that's the bottom line. The only way to stay relevant is to keep adding value in the form of new products that people will want to buy. Products which are unique and really solve business problems. The off-shore firms don't do this. They sell an existing product, programming labor, cheaper. But this is a sucker's game because the Indians are looking over their shoulders at the Chinese who are going to undercut them at the pricing game. When your only value is a cheaper price it's easy to knock you out of the game. When you add real value, well that's a whole different game your playing.


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