Offshore sourcing: Embrace the tide

commentary The trend of offshore outsourcing --offshoring--has only just begun. But it is nothing to be feared.
Written by Marc Hebert, Contributor on
"No, you can't outsource your homework to India!" the gruff father in the cartoon pinned to our lunchroom board tells his son. Jeez, now that even the cartoonists have picked up on offshoring, it must be a hot trend.

With all due respect to the people whose livelihood is being affected by software offshoring, I frankly think all this obsessive focus on the subject misses the real point.

The software industry clearly is in dramatic upheaval. Some 90 percent of software start-ups have gone out of business, and many of the rest are likely doomed. Yes, newly funded software start-ups are required by venture capitalists to do their product development offshore, and chief information officers are aggressively using offshoring to reduce their operational IT costs.

Meanwhile, the domestic IT services industry is being ravaged by deflation. Independent consultants today command half or less of their pre-2000 billing rates, as the labour arbitrage between the United States and India quickly erodes.

All these realities are well-documented in the press. To me, however, they are symptoms of a different and much more interesting trend.

It is easy to miss the fact that we work in the most violently catalytic industry at the fastest-paced moment in human economic history. We overlook the fact that we are largely responsible for the return of amazingly high productivity rate gains in the U.S. economy (and soon, the world economy). The price we pay for this success is volatility: the sacrifice of the individual for the good of the whole.

The point is that we have only just begun. We're only a short way up the beginning slant of history's biggest rollercoaster ride. Offshoring seems like such an irresistible force, but in the not-too-distant future, much of the work that is pushing offshore will be eliminated altogether by continual improvements in software technology.

Legacy code is replaced by modern, off-the-shelf software packages. Custom-coded enhancements to software packages are replaced by highly configurable upgrades to those same packages. User help desks are bypassed by people who learn to solve problems themselves with knowledge management programs and databases. Tough business integration problems ultimately get solved by true software standards, accepted business object definitions and Web services.

Ultimately, the holy grail of codeless development using great software design tools will be discovered. By then, the loss of jobs to offshoring won't seem so important after all.

That's scary. What jobs will be left, then? The new jobs that haven't even been thought of yet, the kind that always arise out of creative destruction, the ones that will surely emanate from the United States because that's where the creative forces thrive.

So what do we do until they arrive? Thankfully, we are the smartest, most adaptive workers in the history of the world. We look for the light and go for it, like the laid off tech worker who started a new business selling T-shirts reading, "I lost my job to offshoring, and all I got was this lousy T-shirt!" We hunker down and use our survival instincts.

For our reward, just look at what is a short way ahead of us in IT: virtually free hardware and network bandwidth (Gilder's telecosm is really arriving); unimaginable computing power (growing indefinitely at Moore's law); limitless, virtually free data storage; increasingly intelligent, self-learning applications; evolving, highly integrated business transaction networks; highly personalised, instantaneous self-service systems.

All of these tools will liberate us to the point where we are constrained mainly by our imaginations.

Marc Hebert is executive vice president of Sierra Atlantic, an offshore outsourcer of software development, maintenance and support. He is the former CIO of Oracle.

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