Facing Offshore Competition
US-based companies are sending more and more tech jobs to overseas. Hiring overseas technical talent to do the job is so called offshoring. In recent years, rush to offshore outsourcing has become a significantly growing trend in IT industry - significant enough to draw us to pay serious attentions.
1. The Offshore Trend
All IT industry leaders -IBM, Microsoft, HP, Oracle, just name a few, are going offshore to reduce costs. When smaller firms see this from the leadership, they must follow. Competitors to these leading firms also have little choice- they must drive down labor costs or be priced out of markets.
In a typical offshore project, 50 to 80 percent of the work shifts to offshore countries, most likely India. India is currently the undisputed offshoring leader, but other countries cited by executives as prospects for offshoring include China, Ireland, the Philippines, Russia and even Vietnam.
Offshore tasks range in a wide board of functions from programming to maintenance, as well as technical support and other "grunt work," Jobs that can stay in North America are likely among high-design, high-touch, and high-creativity works.
Cheaper labor overseas is the main advantage to shifting technical work to offshore operations. The cost of some types of IT work is 20% to 50% less in places such as India, Eastern Europe and parts of South America.
Some executives claimed that they cannot find qualified American IT workers so they have to go offshore. That's not true. There are in fact plenty of technical talents in homeland. The only problem is, employers don't want to pay the premium, or they cannot afford. Since the nature of the business has changed, corporations can't afford to retain the whole IT operations in the U.S. anymore.
2. What Makes Offshoring Possible
The key factor to offshoring success is precise definition of tasks. As for general IT tasks such as software development and maintenance, the biggest problem in US-based companies' offshore projects has been the fuzzy spec. Fuzzy specifications increase communications overhead, and can even make the project fail.
Recent changes in information technology have removed many obstacles to offshore solution. New technologies have been utilized to commoditize software and business application development. Today's application systems have become component-based, and these components are perfect candidates for offshore work.
The most significant driving force that made offshore work possible is the ability to precisely specifying system design and architecture using Unified Modeling Language (UML). UML can help eliminate communications problems and increase efficiencies by reducing the need for discussion. With UML architects can layout complicated enterprise system accurately and define each system component in detail level.
New tools that implement UML provide a realistic way for software systems architects to precisely define all aspects of a prospective system. By following the UML blue print, offshore workers know exactly to do. They can build and deliver products and services efficiently, and they have very little chance to fail.
3. Offshore Impact to Homeland Techies
The incredible labor cost savings in offshore operations are becoming ever more attractive in a slow economy. Offshore migration is making IT jobs in the USA very different from what they were 10 years ago. US IT professionals who used to hop jobs and earn fat bonuses now face an uncertain future when their jobs are outsourced to companies in India and other nations.
Offshore operations pose immediate pressure on the area of software programming and application development. American programmers will have tougher time in the future. They will see less job opportunities as well as low or no pay increases. Offshore outsourcing is the contributing factor in this situation. In addition to offshore competition, US-based competition from eager immigrant programmers is also taking its toll on North America labor rates for programmers.
Currently offshore operations target on areas including:
- Data entry
- Software programming
- Custom application development
- Back-end processing
- Technical support
As time goes by, American corporations will aggressively find a much broader set of projects that can be accomplished offshore. However, no matter how offshore goes crazy, there will always be enough work for us to do onshore. With the right strategy, we can beat it and win.
4. How to Beat Offshore Trend
Don't let your career prospects be roiled by offshoring. The strategy to beating offshore competition is to position yourself on functionally homeland based tasks that cannot be shifted to offshore. You must acquire certain skills and knowledge in order to secure such a position. The following guidelines are important for you to survive from offshore challenge.
Moving to management
IT workers facing offshore challenge should consider moving to management area. While many IT projects are outsourced to offshore, the management functionality must stay close to clients and corporate centers. Those who retrain themselves in project management will be saved.
Becoming technological leader
Every offshore project keeps technological leadership onshore. To avoid getting marginalized, onshore IT workers must focus on current technologies and become technological leader in the organization. Offshore projects require USA-based workers to take on additional leadership tasks. If you want to work onshore, you'd better position yourself for that type of role.
Offshore competition only threatens those who lost the edge. So don't get stuck in dead-end technologies. If you are a programmer, you need to move beyond coding and maintenance. Get you hands on the latest technologies - J2EE, .NET, Web Services, IT security, wireless networking, etc.
Watch the trend closely and plan ahead. You should actively seek projects that keep you working with the latest technologies, and you must keep learning. Always Aim for the top. Get certified and take training classes to make yourself more competitive at home and abroad.
Focusing on design and architecture
The safe harbor shielded from offshoring threats is the area of design and architecture. If coding is your thing, you want to be an architect. Architect is the highest paying IT job that does not require the management of people. If management is not your choice, then go architect. Jobs in architecting function are usually titled Enterprise Architect, Data Architect, Systems Designer, or Business Systems Analyst. The core tasks are among analysis, specification, planning, design, and architecting.
In fact, a lot of programmers and senior developers are preparing themselves to move into the role of architect. They are seeing that offshoring has turned software code into a commodity and the boom in programming salaries is over. The focus on IT projects is longer in coding. It's in analysis and design.
The big opportunity in architecting jobs will be taken by first movers who start to migrate skills away from programming and towards design functions. Because only a few design positions are needed for every dozen coders, programmers who make the move now have better chance to fill those slots. Those who wait too long to transition will find themselves completing with plentiful global labor for the actual coding and construction of these systems.
On the other hand, offshoring is driving demand for USA-based architects. Because America based companies must provide solid specs before engaging offhsore firms, the number of architecting jobs will be increasing.
To become a high demand architect, you must have programming experience, you must you know the business, and you must communicate well.
The following preparations are necessary in order to transaction from programming to architecting:
- Mastering Unified Modeling Language (UML) - learn it quickly.
- Building experience on enterprise platforms - either J2EE or .NET.
- Leaning to create and use framework - Apache Strut is a good one to start.
- Having deep understanding on design pattern.
- Knowing the business model.
- Improving communication skills.
If you have integrated skills of programming, UML design, and the business itself, you can become a successful architect.
Knowing the business
A competitive onshore IT worker must demonstrate business savvy. Becoming a technological leader with proven business know-how can strategically secure your position onshore. Therefore, you need to learn about the inner workings of your company, the business model, and the industry. Strong knowledge of the specific business can help your career in many ways.
Improving communication skills
Develop solid oral and written communications skills. You must communicate like a pro - Get your message out to users, company clients and managers as well as colleagues.