Is IT becoming a commodity?
The primary justification for Off-shore outsourcing is cost reduction. There is no doubt that a 3rd world country can provide cheaper resources but can they deliver the same business value?
Why would a business outsource their IT a 3rd world country? Many IT organizations assume their value is understood and they make no attempt to measure and report their value to the business. They are reactive to business requests instead of proactively developing and implementing a strategy that delivers measurable business value. Because they cannot measure or define their value, they are viewed as a commodity and are subject to commodity based decisions (off-shore outsourcing).
There are many things that IT does that waste money or do not make sense. If IT organizations would focus on delivering value to the business and tracking their services so they can actually measure and prove the value, then they would cease being a commodity and there would be no justification for off-shore outsourcing. My company has been very successful delivering ON-SHORE outsourcing because we are obsessive about delivering and measuring our value.
If the U.S. is to prevent the extinction of the IT profession they need to pay more attention to proving their value to the business because they will not be able to compete against 3rd world labor costs.
Hi Nick,
I agree generally with your senitiment here and have long viewed many IT technical skills as commodities. That’s not to put a dampner on how people feel about their roles, but to manage a department and add value you need to be able to quantify these services.
Wholesale off-shoring is a huge risk and I have a feeling there’s more value in maintaining local talent to work with the business and move the IT service/function along the maturity curve.
Oliver
Oliver, agreed. I believe it is a mistake to commoditize IT skills. To use a construction analogy: Just because someone can hammer a nail doesn’t mean they know how to build a house. Technical skills can be purchased off-shore for a low rate but that doesn’t mean those individuals can use their skills to deliver value because they may lack other complementary skills such as communication and an understanding of the business problem.
Just to clarify – because I think technical skills are commodities it doesn’t mean that I would hire just because they have that on their cv (resume).
As I mentioned, wholesale off-shoring is risky, precisely because you have less quality control over the other professional attributes e.g. communication skills etc. It’s not like you’re interview everyone in person to decide whether their personal hygene is up to scratch.
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Outsourcing Value Assurance