I agree. I’ve seen the negatives of offshoring first hand in several companies I’ve worked at over the past 7 years and in almost every case, its proven to be more problematic than useful! The problem has to do not only with difficulties in managing groups overseas, but most importantly with the quality of work you get when you offshore!

To get good quality work done on projects that were offshored, you will need to spend almost as much as you do to do it locally!(well maybe a little less, but for the few extra bills you can have a full team working locally under your nose) After all, it IS cheaper for a reason, and with the world’s quality of life starting to average out amongst continents, especially in Asia and Africa who are becoming more and more developed and are experiencing an economic boom, the Salaries of good experienced workers has also risen in proportion.

The fact still remains that to get a good return on your investment, you have to spend money, whether its locally or internationally. And being in the IT field myself, I can say with almost full certainty that there still is a HUGE demand for IT jobs here in North America, more than there ever was in the past 7 years, and offshoring hasn’t affected that.

I am a former employee of a medical imaging company in California. This company employs nothing but H1B Visa personnel for imaging “scientists”, I was relegated to GUI, and DICOM network even though I have years of experience in image processing. I was then let go, so that they could bring in a consultant from India NEST, where they have hundreds of software engineers in cubicles writing code, associated with DICOM, medical imaging, and networking. Never will I think that offshoring is no big deal, I will always vote for the candidate whose first priority is the environment, and jobs for americans here in the USA. I used to also think the offshoring would never affect me in the medical imaging industry, boy was I wrong !!!!

I ran a series of CIO focus groups about two years ago that dealt with IT jobs and skills. Some of the issues in Mike’s post surfaced in those discussions.

1. CIOs were outsourcing for several reasons, among them:
a. They were under intense pressure in the 02-05 time frame to significantly reduce costs NOW. Outsourcing was a way to show short tern bottom line gains, even if the CIO knew the model would not hold long term.
b. CEOs became enamored with the idea of offshore outsourcing and pushed it on many CIOs. The CIOs realized in many cases that management/quality would be an issue, but were pushed by CEOs and/or Boards to give it a try.
c. CIOs were more willing to offshore ancillary IT than core or strategic IT — so offshore experiments made sense in some of these cases.

2. Regarding US jobs; both sides are correct. It is very tough for some IT professionals to get jobs; and there are key IT skills that are scarce.
a. There are systemic reasons for this. Many very good IT people simply possess skills that are outdated (not currently in demand). There is a mismatch of skills supplied and skills demanded.
b. Some of these IT people are retraining, some are not. It is very hard to retrain as you need to figure out what to retrain in, sometimes you need to acquire base concepts before becoming cutting edge. And even if you do all that, you are competing for jobs against 23 year olds who’ve been developing these cutting edge skills in school – and are happy to work for much less than a 45 (or 55) year old is will to work for.
c. Some of the cutting edge skills are held by American youth and my foreign youth. Companies are looking to import that foreign youth to meet skill demand.
d. In a growing number of situations, companies are looking for “soft” skills to complement “hard” skills. Of course, this isn’t all jobs–but I was very surprised in our focus groups to hear of often this is true. Some (not all) of the older, experienced IT guys are weak on the soft skills (Angry Dude above is a perfect example of that) 🙂
Angry Dude may have cutting edge IT skills, but no doubt the personal presentation he makes here comes though in his job interviews; his lack of soft skills likely disqualify him from many jobs.
e. The reason for this soft skill demand ties to the types of systems being built and how IT is being managed. CIOs report they –more often today than a generation ago– need to put their IT guys into the same room (physical or virtual) as their customers. Therefore, they want IT guys they trust being in the same room as their customers. Also, more projects have outsourced components (onshore or offshore) and they need IT guys who can effectively navigate multi-org projects. These are soft communication and teaming skills.
3. The irony in all of this is that outsourcing (on and off shore) means that companies are less likely than a generation ago to invest in long term growth for their employees. They see coders as something they hire in for a project (insource, so to speak), not someone who makes a career with their firm.
a. Therefore, they’ve cut hard skills training budgets to keep people current.
b. Therefore, they’ve cut management development, MBA, and related support to help their IT employees develop soft skills.

So, to an extent, US industry is responsible for creating their own skill mismatch and resultant shortage of what they need – while at the same time lots of IT guys are out there with ill-fitting skillsets.