Menu
Menu
On Off, Off On

On Off, Off On

Our intrepid traveller considers resorting — literally — to offshoring

I have just returned from a fact-finding mission about moving our IT operations offshore. Everyone looks to India or Indonesia as their prime offshore destination due to their low labour costs, good skills and similar spelling. There's no competitive advantage to our company just following the crowd, so I looked to parts of the world that few others have seriously considered, such as China, Africa and Europe.

Everybody's already shifted manufacturing to China and the move of services is following, but China's management of its massive expansion could present a future business risk. Africa may well become the next China, but currently it's the next Middle East with regimes popping up and down like a badly configured intranet. I think the next China will still be China.

I made two important decisions. First, I will fight any attempt to send my IT operations offshore. Secondly I won't use the term offshoring, as I don't like to verbize nouns

To assist other CIOs in planning their fact-finding itineraries, I can advise that the regions I chose to visit — Tuscany, Provence and the Maldives — are not viable offshore alternatives. (Maldives is admittedly offshore, but the powers that be there didn't seem to be promoting that feature as an outsource business option.) I conducted an exhaustive search throughout each region — so exhaustive that I had to have a holiday afterwards, and fortunately there were resorts conveniently located in each destination.

Prior to my trip, I thought that sending some IT functions overseas would be good for both the company and the country. The current account deficit is very high, so I'd be helping restore the balance of payments by exporting some of our skills and talents overseas. The CFO saw it differently, and tried to explain it to me over lunch one day, but I had trouble following his figures, especially after the second glass of red.

I've never been good with numbers. I once worked in a company that shed a third of its workforce during a downturn, issuing a statement that this was a positive move that would save the company $30 million. At the information and propaganda meeting for all employees, I asked why they didn't just get rid of everyone and save $100 million. They then shed one third plus one. That company now has a large number of workers in India, soon to outnumber their US employees.

On the way home on the plane, I had time to think about my mission, since I'd already seen all the movies — twice. I considered the impact on my loyal employees and, more importantly, on my department. If staff numbers decrease, I'd lose power and prestige. While I could argue that I'd be managing an international business with increased staff numbers (since our offshore operation could afford to hire more people), I doubt the CEO would buy it. Nor would my staff. Nor do I. If most of my IT operations does move, then the management previously required for those operations diminishes or also moves offshore. A job reduced is a job in peril — my CIO position could be replaced by the part-time contract positions of a policies officer and an outsourcing manager. I'm willing to resign myself to IT being in India, but I'm not willing to resign myself to be in India. There and then, I made two important decisions. I will fight any attempt to send my IT operations offshore. Secondly I won't use the term offshoring, as I don't like to verbize nouns (but I'm happy to nounize verbs).

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Join the newsletter!

Error: Please check your email address.

More about AbacusAT KearneyBossEdge TechnologiesPLUS

Show Comments

Market Place

Computerworld
ARN
Techworld
CMO