UK firms love offshoring - what about the staff?
The debate is over - well at least until the next survey is released. Rather definitive looking results from independent advisory firm EquaTerra reveal that 100 per cent of UK businesses currently offshoring all or part of their IT functions are using India as one of their locations. And you can't get more than 100 per cent, can you?
Actually you can: surveys sometimes say spending rose by 204 per cent, for example. And that's not possible (I think), because a percentage is a way of expressing a number as a fraction of 100. So when researchers say spending increased by the aforementioned 204 per cent, I think they're just being mathematically lazy.
Anyway, I digress from the main point - which is that UK companies love outsourcing. Check out the following facts from the EquaTerra survey:
- Global sourcing is rapidly becoming an essential business option for UK firms, with a significant increase in organisations utilising near or offshoring within the last year - up from 47 per cent to 57 per cent
- Outsourcing generally is also still increasing in the UK, with 54 per cent of firms questioned planning to up their activity in 2008. Only 9 per cent predicted they will outsource less
- Real dissatisfaction with outsourcing is rare, occurring in only 14 per cent of the contracts evaluated
The EquaTerra research also illustrates that although cost is the primary driver for many organisations, more than half of firms (54 per cent) are now outsourcing for other reasons, such as availability of skills, flexibility and quality of work. Which is bad news for UK IT professionals, according to Phil Morris, managing director of EquaTerra Europe:
“Business people are making the decision to outsource to India because they can’t find the same resources in the UK."
As has been discussed on this blog recently (see further reading list below), with a significant UK IT skills gap - and more firms choosing to fill lower level technology positions with overseas talent - where will the next generation of technology managers come from?
Isn't the technical level the breeding ground for future chief information officers (CIOs)? And if not, is it really too outrageous to believe that current chief information officers - operating under increasing financial and skills pressures - will search also offshore for talented IT managers, as well as technical staff? I think the passion for outsourcing means that you should all watch your backs.
Further reading:
- Outsourcing and the lack of skilled UK workers - http://knowledge.computing.co.uk/2007/12/outsourcing-and.html
- UK firms offshore IT management to fill skills gap - http://knowledge.computing.co.uk/2007/12/firms-offshore.html
- Where next for offshoring? - http://knowledge.computing.co.uk/2007/11/where-next-for-.html
- Gartner reveals top 30 offshoring locations - http://knowledge.computing.co.uk/2007/12/gartner-reveals.html
- TPI locations for offshoring - http://knowledge.computing.co.uk/2007/11/where-next-for-.html
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"“Business people are making the decision to outsource to India because they can’t find the same resources in the UK."
I have to second that. Outsourcing would be purely need based in the future and not based on price or salary differences of resources
Posted by: Outsource Programmers | Monday, 14 January 2008 at 11:34 AM
Why don't we just accept it: IT, in the West at least, is a dying industry. It's not glamorous, it's not sexy and it's not desirable. In case anyone thinks I'm overreacting, how many of the staff at Computing would recommend IT to their own children. This is not a rhetorical question, by the way: I really do want to know.
I'm in my mid-forties. In any of the professions, such as law or medicine, my career would now be approaching its peak. Unfortunately, I'm in IT, so that just makes me old and past it. However, ny escape strategy is in place: I'm back at university, studying with a plan to Do Something Else.
Posted by: Robert | Tuesday, 15 January 2008 at 01:00 AM
Prehaps they dont reccomend IT to their children as they see their jobs being outsourced to cheap foreign labour?
Posted by: John | Tuesday, 15 January 2008 at 12:57 PM
Outsource Programmers - If that's the case, how will quality be affected? Companies often deny cost is an issue anyway, suggesting that they actually outsource for issues of demand - or maybe - even quality.
Robert - Thanks for the personal take, hope today's blog posting goes some way to answering your question: http://knowledge.computing.co.uk/2008/01/offshoring-mean.html
John - Nail on head, I think. John and yourself seem to share similar views...
Posted by: Mark Samuels | Tuesday, 15 January 2008 at 03:17 PM