If the news stories are any indication, the U.S.
economy has a rough road ahead of it in 2008.
Due to the rippling effects of the credit crisis, mounting trade deficit,
soaring oil prices and sobering employment numbers, the United
States is expected to be tightening belts in
the coming months.
Observers have mixed views about what this might mean for outsourcing. Some
argue that a depressed U.S.
economic climate will make the cost savings of offshoring less dramatic, which
could save jobs that were otherwise at risk of being sent.
Offshore outsourcing has long been seen by business leaders as a way that
CIOs could save a few quick pennies. However, this line of reasoning has grown
less popular in recent years because many organizations were burned by mounting
costs and project delays when they shopped based on price alone.
"Our current economic condition is almost marked by the declining
dollar, which makes offshoring less attractive. CIOs
need to be very cautious before trying to save money by offshoring,"
Forrester analyst Alex Cullen told eWEEK in January.
Others, however, feel that a squeeze on IT spending will have the opposite
effect. In a May 4 report, Forrester Research argued that the current economic
pressures will only increase demands to quickly accrue cost savings by ramping
up outsourcing relationships.
"There's been no roll-off in the demand for outsourcing providers. CIOs
will have to look at cost savings, but we're advising them not to take
shortcuts," Forrester analyst and report author Paul Roehrig told eWEEK.
In addition to the drive to cut costs, other issues will only augment the
pressure to continue outsourcing, the first being an IT skills gap in the
United States, where demand for tech skills is outpacing the supply. The Bureau
of Labor Statistics reported in January that computer software engineer was one
of the computer-related
roles that were expected to add the most jobs between 2006 and 2016.
Meanwhile, a new report from the Computer Research Association found that the
number of people receiving computer science degrees has plummeted since 2000.
All this creates opportunity for tech professionals who want to put their
careers in the best position as companies continue to outsource projects.
"If you work in a highly commoditized, easily outsourced line of
business where the work can easily be done elsewhere for less, your job is not
safe," Roehrig said. "But the real trick of outsourcing is how well
you manage it, and the jobs that help manage outsourcing deals are going to be
even more in demand."
A second factor that could contribute to an increase in offshoring as the U.S.
economy heads into a down cycle is the growing maturity of the offshoring
market, as service providers and their clients have gotten smarter since their
early relationships. A third and related factor is the improvements in productivity
that have resulted from increased efficiency.
"Really what is happening is that the definition of offshoring is
changing. The erosion of the wage arbitrage equation is changing the market
dynamic. The Indian-based service providers know this very well, so they're
presenting business gains as well," Roehrig said.
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