Surviving Offshore Cutbacks

Computerworld - Jim Honerkamp, CIO at Clopay Corp., a building products maker in Mason, Ohio, is one of the people shaping the future of the American IT workforce.
By shipping some of the company's IT programming and application development work to India, Honerkamp has reduced Clopay's IT staff from 90 people, including consultants, to 35. He has no regrets about this decision. Outsourcing many IT functions has kept his budget stable and allowed him to add services. The decision to outsource network management, for instance, let him add network monitoring and other services for the same price.
Outsourcing is a necessity, Honerkamp says. "You really don't have much choice. I don't see how we can justify $90 to $130 an hour," when offshore services charge a third of those hourly rates. "I think the generic programmer [in the U.S.] is really threatened by this," he says.
Indeed, the U.S. IT jobs most adversely affected by offshore outsourcing are programming-related. IT professionals involved in integration work on business-process projects or those who have new technology skills have the best chance of surviving.

Jim Honerkamp, CIO at Clopay Corp.

The U.S IT professionals who are most in demand often have specific industry or software package skills, such as those used in health care or SAP and PeopleSoft systems, said Russ Tessman, a manager at Vermillion Group/MRI, an IT recruiting company in Des Moines, Iowa. But professionals with general skills such as Java development and Visual Basic programming -- "those are the guys really struggling to find new opportunities," he says.
There's also a need for qualified project managers, especially people who know how to bring projects in on time, notes Marty Clague, president and CEO of Farmington Hills, Mich.-based Covansys Corp., which provides offshore IT services in India. IT workers with communications technology and networking skills are also needed in the U.S., according to Clague. There aren't enough people who understand networks, how to run them, build them and protect them, he says.
But this career advice is based on the kinds of services being provided offshore today, not tomorrow. The future for U.S. IT professionals may get worse.

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Advanced networking and storage technologies are working to turn IT into a utility, something that can be managed anywhere, anyplace, says Andre Mendes, chief technology integration officer at Public Broadcasting Service in Alexandria, Va.
"The truth is that as we continue to progress, the cost of providing a secure environment for a company is going to be too large," says Mendes. "There are going to be too many variables, too many unknowns, and at what point do you say, 'No, I want a company that does this for a living to worry about these things on a 24/7 basis.' "
With backbone networks operating at almost zero latency worldwide, there's nothing to stop the heart of a corporate IT department -- its data center -- from being moved offshore, Mendes says. "If communication links are not only ubiquitous but extremely reliable, then what difference does it make if it's down the block or around the country?"