Outsource-proofing yourself

Relationships with the business side of your company may save you from being left out in the cold because of outsourcing.

Should you feel threatened by overseas IT outsourcing? Definitely: IT jobs are being outsourced to companies from

India to Romania by the hundreds of thousands.

What to do about it? You can argue to your bosses that you perform better than foreigners, that you're more loyal to the company, that outsourcing is risky, that it's not as cheap as it appears, even that you are on top of the hottest new technologies.

Forget about it; your CEO and CFO have already taken these factors into account. What they are after is cost savings. What you should be after is indispensability.

Here's what you're up against: Overseas tech people work for a lot less than you do. McKinsey & Co. reports that software developers in India fetch one-tenth of what their US counterparts do.

Outsourcing allows companies to activate IT skills on demand, and that's a lot cheaper than paying full-time employees. Ron Glickman, CIO of Duty Free Stores, a global retailer based in San Francisco, outsourced just about everything after the economic downturn, 9-11, and SARS ripped the bottom off the international travel business. "We get a 3-to-1 productivity improvement through our offshore partner," he says.

Interested in continued IT employment? Ask not, "How do I save my job?" Ask, "How can I provide greater value to my company?"

Get into the head of your CIO. "The CIO is unlikely to be losing his job in the outsourcing deal," says Bruce Blitch, CIO of Tendesserlo Kerley Inc., a chemicals company in Phoenix, Arizona. "He is likely, however, to be making go/stay decisions on the rest of the staff."

What C-level executives want from IT is business value, according to Jeff Kaplan, managing director of ThinkStrategies in Wellesley, Mass. "There has to be a business measure to it," he says.

The ultimate business measure, of course, is profit. "If your technical knowledge is all that is required to perform your job, you're a candidate for outsourcing," says Blitch. "The best thing you can do is to get up from your desk and find where technology can make a positive difference to the company bottom line."

The next best thing might be to forego some favored IT mantras. "Best practices," for example, isn't a business-like goal, according to Krag Brotby, security architect at Critical Path Inc., a communications software company in San Francisco. "I've replaced best practices with 'adequate and sufficient,' which seems to get more traction with those who pay the bills," he says. "The notion of proportionality is not part of the best practices discussion. It suggests some absolute standard, which is BS."

All this means that it's not going to be the IT wiz who will likely retain his job. Far from being indispensable, the guy who lives and breathes technology becomes a commodity in this brave new world.

Emphasizing expertise in hot technologies "only perpetuates the myth that the value is in the technology," according to Blitch. "If we value your XYZ certification above tangible business benefit, we shouldn't be surprised when the employer switches to the most economical XYZ."

James Burnett, a 30-year IT manager at Fidelity Life Assurance Co. in Newmarket, New Zealand, and an avid insourcer, advises tech people to build bridges with the business side of the company. Among his pointers:

  • Develop a good working relationship with key business stakeholders. Understand their business processes.

  • Take part in the business planning cycle. Suggest where technology can provide competitive advantage.

  • Develop people skills to interface with the business types.

"IT people who understand the business direction and can help in the strategic planning, designing, and managing of new business initiatives are going to have the advantage in proving their business value," explains Kaplan.

Krag Brotby says that he beat the outsourcing phenomenon by finding "a culture-specific angle" to his work. "Mine has been to focus on security governance -- how to manage it, integrate it, align it with the business, measure it and right-size it," he says.

Even an outsourcing fanatic like DFS's Ron Glickman didn't get rid of everyone. "Domain expertise in global retail operations and project management -- those are the highly-valued skills we need to own in a retail organization," he says. "These are people who want to be in retail, not traditional IT."

"People who can learn from experience," he continues, "are comfortable with change, who can see how things work from a different perspective" have nothing to fear from outsourcing.


This was first published in December 2003

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