It’s fascinating to see company after company send IT work off shore in search of “cost savings” that many times result in the opposite.
I have been in IT Management roles for 23 years and for the last 7 running my IT services firm. I talk to many IT Directors and hear and read the horror stories of those off shoring development or support to other “low cost” countries.
What they tell me is sad, sad for them and for their internal customers. They can’t stop the process because their bosses want to try it (everyone is talking about it so the “boss” wants to try it) and these days of cost constrains they can’t be seen as stopping these initiatives aimed at reducing expenditure. It is sad for their internal customers because they know the reduction on service and quality they will get.
What they tell me again and again is summarised below:
There is a huge management overhead in dealing with these off shoring companies, that is never added to the initial cost. Language barriers, cultural issues, testing processes, code review, interpretation, telephone charges, international travel, etc. These are some of the aspects that need a huge amount of overhead in management time, let alone the stress and frustration to deal with the off shoring company.
What CIOs tell me is that the quality of the delivery is so poor that at the end the amount of re-work and time wasted impacts the efficiency of the company and its operations – let alone the frustrations and stress related. Some CIOs have even experienced loses of customers and contracts due to the quality of the service received.
As some one described:
The Bitterness of poor quality lingers on… long after the sweetness of low cost is forgotten.
Information Technology is evolving as the greatest new frontier with what new powers and control will be defined. The penetration of corporate networks, country networks, systems and people’s systems can be impacted so dramatically by viruses, intrusion, performance degradation, intellectual property appropriation, identity theft; that government services, corporate services and individual activities could be grounded to a halt.
Not having sufficient local developed skills to prepare for these eventualities could prove to be a disaster. If we continue off shoring, our young people will not study IT degrees because the jobs are available in other countries and not locally. Not having a healthy pool of senior and sophisticated IT skills in the country is not like not making cars or t-shirts in the country. There is no national security implications by not having skills to make cars or t-shirts, however the implications for our national security for generations to come by not having IT skills is huge.
Returning to Australia
What my sources also tell me is that after the recognition of the disaster of off shoring IT is accepted within corporations, the cost of bringing systems, development, projects and support back to Australia is even higher than what it was if kept locally in the first place. A friend who runs another local IT services firm told me that he doesn’t mind off shoring, because he knows that when his customers return, he will be able to charge them more (and buy a new car). This is due to the desperation, frustration and inefficiencies that the customer had faced and therefore they want to return at any cost.