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Managing the double-edged outsourcing/offshoring sword

  • Publication Date:October 2007
  • Publisher:Ovum
  • Product Type: Report
  • Pages:20

Managing the double-edged outsourcing/offshoring sword

Corporate IT shops in the US are facing what will become a critical IT skills shortage - a shortage attributable to a combination of the imminent mass retirement of baby boomers and a shortage of IT-skilled replacements. Outsourcing is not only the most logical and readily available solution to this need, it can also be a critical strategic vehicle for transforming many inefficient IT environments and processes, and for helping companies transform IT from being an inhibitor to an enabler of their companies' businesses.

However, this silver outsourcing cloud has something of a gray lining - a substantial component of virtually all outsourcing services will increasingly be provided by offshore resources. Some of these services will be provided by employees of companies based in India and, increasingly, Russia, China and other countries. Some will be provided by offshore employees of North American companies. However, either way, non-US citizens will be performing jobs that were once carried out by US workers. This will impose tough personal, business and societal dilemmas - dilemmas that must be addressed jointly by all constituencies, and within the context of the nation's broader IT skills shortage.

  • Key messages
  • Offshoring as tactical and strategic imperative
  • Outsourcing as a strategic tool
  • Outsourcing's central role
  • Strategic versus tactical outsourcing
  • The good news, and the bad
  • The convergence of outsourcing and offshoring
  • Convergence of outsourcing and offshoring
  • The two-edged sword
  • The societal costs of IT offshoring
  • Quantifying the offshoring threat
  • The risks and opportunities of 'hollowing out'
  • Strategic risks of offshoring
  • Strategic opportunities from offshoring
  • Towards an integrated IT jobs policy
  • The need to go beyond free trade
  • Need for private sector leadership
  • Industry/education/government co-operation
  • The missing link to a comprehensive solution
  • Foundations for the future
  • Beyond IT
  • Removing educational roadblocks
  • IT as a testbed for addressing the challenges of the US's 21st century service economy
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