Outsourcing will bite in 2004

Outsourcing will bite in 2004

Summary: Sending jobs offshore will generate even more angst next year

TOPICS: Tech Industry
As I have previously observed, 2004 won't be much different from 2003 in terms of the trends that dominate the technology landscape. In this column, I offer my outlook on offshore outsourcing, on-demand computing, Web services and the impact of Wi-Fi in the coming year.

Offshore outsourcing has generated the most angst among IT workers and a rift with management. Next year the rift will be even more pronounced as enterprises continue to look for lower cost IT services. I predict that the relentless focus on lowering costs through offshore outsourcing will come back to haunt companies in 2004.

For solving short-term issues or dealing with a specific development project or customer service application, the outsourcing route is a no-brainer, given the outsourcing partner can meet predefined goals for the relationship. But too many companies chasing cost savings will outsource functions that are better managed internally. The result will be small and big disasters -- outsourcing gone wrong. The obvious way to avoid disaster is to test, benchmark, and monitor the outsourcing partner's performance.

However, the hidden and more serious problem comes from outsourcing functions that are better managed internally. The business and technical knowledge that exists within a company is a huge, vital and often proprietary asset. Asking an outsourcing partner to replicate the knowledge in the heads of key internal staff or to guide key projects that are cross-enterprise and vital to competitive positioning can be categorised as a potential disaster.

In addition, the cost-savings promises of offshore outsourcing can be inflated. A programmer that is 25 percent the cost of a US-based one has value if the code produced isn't full of bugs and the project stays on schedule. Before you sign that next offshore or onshore outsourcing contract, be sure to read the Meta Group's Dean Davison's "Top 10 Risks of Offshore Outsourcing." The article might save you from making an ill-advised decision in the name of cost reduction.

Topic: Tech Industry

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  • Something else to consider in 2004 is Secure VoIP.

    The FBI and the Justice Department have renewed their efforts to wiretap voice conversations carried across the Internet.

    Internet-to-Internet voice links like those offered by VoIP companies Free World Dialup and SIPphone are closer to information services and fall into a regulatory gray area. The status of voice conversations carried through instant-messaging programs is even more unclear, as is the FCC's ability to compel overseas VoIP providers to comply with U.S. rules.

    Xten will be releasing an initial build of Encrypted X-PRO within the next few weeks to work with the Free World Dialup's and SIPphone's of the world. It will only be sold to US and CDN consumers mainly to combat corporate espionage. The keys are created dynamically and then destroyed the moment the encryption is turned off. Considering this and the fact we are using AES 256 bit encryption, it will be extremely difficult for anyone to tap these calls.

    Xten built this application to assist legitimate corporations who are trying to protect themselves against others trying to eavesdrop on their conversations and conference calls. We obviously did NOT build this application to assist terrorists and alike in their criminal activities.

    Xten is researching many ways to make sure we are not assisting the wrong people when we bring this product to market. We know we don't have all the answers so we are asking readers for their input in this regard.

    What do you think? Will encrypted VoIP products will do more good than bad?