The second group of letters comes from readers who accuse me of joining the conspiracy to move jobs -- ones that belong to hard-working Americans -- to India, Russia, Singapore or some other place where there are throngs of IT professionals willing to work for a fraction of the wages that their typical American counterparts get domestically.
To the second group, I say welcome to the global economy. If you want a sympathetic ear, you've got one in me. That said, you can choose to ignore reality, or you figure out what to do about it. The United States wanted a democratised world full of industrialised nations. Now it has one, and if American companies are expected win against foreign competitors in a global economy, they can't be expected to maintain a significantly higher cost base with a minimally appreciable difference, if any, in quality of goods or services.
In the same way that it's more profitable to manufacture clothes, semiconductors, electronics, and other heavily commoditised items overseas, it was only a matter of time before the standardisation and ensuing commoditisation of IT services was hit by the same wave. In a recent interview with my colleague Dan Farber and me, Intel CEO Craig Barrett characterised the desire on behalf of international engineers to get a piece of the action saying "the rest of the world [which has been schooled by the same University system as domestic engineers] is hungry."
According to Corio worldwide markets executive vice president John Ottman, "the laws of competition drive this sort of activity." Ottoman says a little over 20 percent of Corio's workforce (recently ranked 90th in Deloitte Touche Tohmatsu's Fast 500 index of the fastest growing companies), will be located in Bangalore, India by the end of 2003. Addressing criticisms about potential quality problems when going offshore, Ottman says "It would be a mistake to assume that offshore help is not capable of very, very high quality work. For certain tasks, offshore delivery can qualitatively meet or beat the quality you get domestically, and it's cheaper. For example, in the case of a client like the United Nations Development Programme (UNDP), it's significantly cheaper to have a PeopleSoft report written in India than it is in the U.S. It's about $20 per hour there vs. $85 here, and the quality is the same."
The bottom line is that, for IT pros on the bubble --- ones who, because of an outsourcing project, are facing transfer to an IT services outfit like IBM Global Services or EDS or worse, are facing job elimination --- bad mouthing the trend, or sending e-mail to journalists who write about it won't make life any easier.
So what can you do?
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