increasing offshoring - though they realize that the quality is poor and the rework amount is high, the lure of the short term money savings is too much.

The extra effort put out to redo the mistakes from the offshore group are just added to the daily burden of the much reduced in-house staff.

The numbers don't add up and the headline is designed to be sensationalistic. Based on the number presented, half of 350,000 jobs would be 175,000 IT jobs offshored. The numbers I have seen show U.S. IT employment at about 3.5 million. I assume the author means that 1 in 4 NEW IT jobs will be offshored by 2010.

Show us the evidence in these figures. Both for the numbers -- how many are actually MOVED from our country to other countries versus how many of those positions are new. Show us the proof as to how many dollars a fortune 1000 is saving and don't forget to average in the amount of administrative overhead to maintain these overseas contracts, the amount of time/effort/dollars to redo the sub-quality work, etc.

I find it incredible that industry trade magazines and so-called consulting groups like Hackett are so bent on making a dollar, they don't seem to get that by continually writing about it, you are in effect ADVERTISING it, and promoting it and pushing it all the more.

The funny part is that your jobs could just as easily be sent overseas. Especially what Hackett does.

More jobs overseas means less Americans employed, less spending, less revenue, more jobs cuts, and the cycle continues. One day the companies will realize that the bottom line is the employees, not the stock holders, because the employees (and their families) are the ones that buy and use their products and services.

Oh yes, "Production in China" and "Outsourced to India" so was the rage of the pre-2009 America.

A few fake chips and a couple of dead San Franciscans gives new meaning to the word "SCRAMBLE," but I'm sure your son or daughter's life doesn't depend on things working correctly -- but many of ours do.

As for shipping all of your dev work to India, ask a recently terminated VP if it was a good idea.

Savings of project $5M cost of ensuing lawsuit $20M for everything else...you know the rest.

Maybe you should post more on recent data questioning the need for a corporate CIO.

We outsource all of our IT to the U.S. The local talent doesn't have it and without trying to learn one of the many dialects in India our clients need to be able to talk to someone whose native language is English.

The complaints we get back are unintelligible conversations with people who frankly know words but don't understand what they are saying. You still need communication skills with IT support -- something India and t's firms don't get.

With the dollar going to drop to nothing with all this money being printed by the Fed, don't worry -- the IT jobs will migrate back to the U.S. as devaluation of the dollar will make it more economical to just use IT firms in the U.S.

$28 million savings? Cool. That's a nice salary for a CEO or nice bonuses for the execs. Too bad we don't offshore those high-salary types instead of the folks at the bottom. I think we could save significantly more by offshoring the top 25% and keep the folks who actually do the work here.

My own personal experience with offshoring is that it's a complete, unmitigated disaster (but the hourly rate *is* less, therefore the bean-counters L-O-V-E it).

Offshore folks tend to be right out of college, or recently graduated, with no or little experience.

Offshore folks tend to jump from job to job quickly, because ANY kind of experience is greatly in demand. Therefore, the training you've invested in them is gone, and you have to start the process all over again. (Are the bean-counters measuring THAT cost? I think not!)

Offshore folks tend to be many timezones away, resulting in long time lags between e-mails and other communications. Needless to say, phone conversations are rare and can only occur during a limited window. Is anyone measuring this loss of efficiency? We all know the answer to that.

Offshore folks have different cultures and language, which, by definition, will reduce the efficiency of communication and understanding.

Indian offshore folks, in my experience, tend to be HIGHLY structured and do not respond well outside of the defined structure. I once fought for MONTHS with a group of developers in India over a problem their software was having. I finally got them on the on phone with a user, and we walked the user though the steps, and, sure enough, it didn't work. The Indian team reqested "screen shots" of a screen which, by their own admission, contained NO INFORMATION that would assist them in their debugging. They absolutely REFUSED to move forward, even though they had finally figured out what the problem most likely was, until they received the screen shots of the screen with no information. In case you're wondering, no, I did not make this story up.

Outsourcing is constantly touted here as the end all, be all. Our CIO used overseas resources in the past, primarily to cut staff and benefits costs.

Worst is, I have been asked to write up the costs and benefits of outsourcing my entire staff and, I have to only assume, that my job would be going to India along with my staff. The few in-house staff that the company will be left with are all Oracle developers/technicians, and everyone of them here on an H-1B visas!

The company functions in the healthcare arena, working with Medicare and Medicaid. Think any of these guys have any idea what they are? No clue.
Company doesn't care, though. The "old" staff is looked at as just that: too old and expensive. And forget about training us on Oracle and retaining the business knowledge -- it costs too much for Oracle training (we have been told that we can always pay for it ourselves, they will let us use whatever vacation time needed to attend the training).

Those of you discounting the stories, take note, your jobs are probably next!

If I had a line of code for every time I've heard this in past 25 years, I could almost rewrite Vista. I'm surprised you would even give this study a place in my inbox! Stick to facts, not headlines.

I'm sure that all of us unemployed and underemployed IT workers will be rushing to buy those goods and services the very same companies want to sell to us. Wait a moment...one needs a JOB to buy things? One needs INCOME? Oh, right...these companies will be selling to all those "wealthy" Chinese and Indian workers...wait...aren't THEY suffering from the global downturn as well? Aren't there something like 300 million Chinese with no jobs? And wait...India ISN'T the safest country to do business in??

Well, maybe companies can find new markets in the...Amazon?...Antarctica?

Hahahahahahahahahahaha!!! It's funny -- see, I'm laughing. Wait...yes, the sheriff is here to put me out on the street...yes, you can put my computer science book collection out there on the snowbank -- I won't be needing any of those anymore...

Forget about the actual numbers. Any job that is outsourced to an offshore resource is a lost productive consumer to the U.S. economic system. These offshore resources don't pay taxes or rents, don't consume local products, don't contribute to our way of life. There needs to be a recognition in the tax code that penalized the companies for these services. The company needs to be taxed for each head, at U.S. salary averages,(Federal, State, Local, Social Security, etc.); also, a subsidy to the corporate benefits structure should be a requirement. There ought to be an offset, as well, for any consideration of any federal grants, etc.

When are these companies going to wake up? The quarter-to-quarter profitability is bankrupting our companies and one of the core reasons our recessions are going to deeper and longer. WAKE UP, AMERICAN COMPANIES.

Since I have participated in sending work out of the country, I believe this trend needs to be reversed. Maybe Barrack Obama can do it, since he talked about this in his campaign. This is all about economics/costs. If the economics don't work, the jobs will stay. The brain drain will be impossible to measure if we do not stop this trend....

I, for one, am tired of talking to "support staff" in India. The measure I use is holding time. It take twice as long to resolve problems with staff in India and therefore the economics breakdown...customer satisfaction doesn't count anymore either...

I can verify what all these folks are saying...was an early adopter of "offshoring" in 2001...no job since...period! MBA, BBA, CISSP, MCSE, COMPTIA Project Mgmt+, 20+ yrs experience... BTW, all certs paid for by me, not any employer...Of course, before I was out-of-date...now I am 'overqualified'!!!

As you can see I am not serious about my IT career! No interest by anyone!!!

So what does it matter? No house, can't afford one. 12-year-old car, can't afford a new one. No doctor visits. No insurance, cant afford to go... Hmmmmmm, see a pattern here, you greedy, low-life CxOs and top-ten percenters who have finally killed the golden goose for that extra 5% bonus every year!?!

All you have done is killed what made this country special: the middle class. Great job!!

Hi all,

I must agree with the other folks here. It is not up to us, the IT workers -- it is up to the bean counters. I have been in the business for 25 years now; over that time my jobs have been replaced by overseas workers, programs that could do my job. I have retrained a number of times and yes, the cost is ridiculous. As far as the DB market, I started out there but got out before the nightmares started. I have seen so many companies push their helpdesk overseas, and I have to deal with these folks everyday. Granted they need jobs as well, but I've spent over three hours on the phone with them, and in the end I have to stop them after they caused my server to crash, only because they did not know what they were doing. The worst part is the company we use charges us 30K for support. I ended up going to the forums and finding my answers. My boss went mad because I was not using the paid support.

Training that is another black hole, where these companies are charging these outrageous prices for 5 days where they try and cram 700-1,000 pages of information into your head, and then the employer says what is wrong, you just did the course. When instead if the employer thought about it and hired someone who knows the product inside and out, brought them in to see how the company is using the product and then offer the works a chance to be trained, not on the overall product but the parts that will be used by the company. Our company just paid 20K for 4 people to be trained for 6 days on 2008 server. When they could have said, "Hey, we will pay the person 20K to work for us for, say, 3 months, to train our staff in-house." I am willing and always have been to put a little extra time into training, and if that means after work for a couple of hours a week or even as Sat. morning. If we as IT workers want to stay in this business, we need to step out of the box. Yes, we all have very busy lives and families. Learning a new product is not that hard as long as you can play with it and work with it. Some people learn from books; most of learn a lot better from OJT. Build it, break it, fix it and learn. Going to these classes is not the way to learn as there is no perfect environment in the real world you learn from things breaking and having to fix it.

The other thing I would like to see is for these companies to stop making offshoring look so good. Give us the real information and stop serving up the cream. The amount of time we have to fix the problems from offshoring is a real number -- let's see that as well. One other thing: if you offshore, you hire a robot, not a human being, as stated before they work in a structured environment and are not allow to think out of the box. If it is not on the screen in front of them then sorry can not answer the question. Lets get them on the call and off as quickly as possible...only the numbers count not the satisfied customers they do not count.

We need to get back to letting people think for themselves.

This is just my opinion..

This is a great idea...

It's so great that Fidelity Investments is looking to dump their 2,000-man IT dev shop in India to whomever will buy it. And they will give whoever purchases it some multi-year contracts too boot -- i.e., kind of pay them some kickback to take it off their hands...

I guess they got tired of the 35% turnover rate, the falsified credentials, the poor quality, re-work, etc. And these guys rated themselves as a CMM Level 4 shop...

Wanna cut IT costs? Dump the EVP's pushing this stuff. How do you know which ones to cut? Ask them about the concept of "cost per unit or yield" -- the ones with the glazed eyes should get walked to the door (it's just too much detail, and they will overload as there is no white board to draw cloud diagrams on)...

And I love those saving estimates noted in the article... $28 M in savings minus $42 M in poor quality, risk exposure, and rework costs works out to a loss of $14M, per my calc...

When corporate taxes are levied to pay for mandates like universal health coverage, it will raise overhead for U.S.-based operations.

Every time the costs of operating a business in the U.S. goes up (based on headcount), offshoring always increases.

I have seen it twice now. Some exec comes in, sells a pig in poke, and walks away with a nice package. Nice to see the higher-ups continue to sell out their fellow citizens. I remember when I.T. was run by I.T. folks and not some frat-boy knobs.

Wasn't there just a TERRORIST ATTACK in India, specifically in their TECHNOLOGY CAPITAL?

Guess if the outsourcing doesn't work, the company can always get a bailout. Look out for the CEOs not the working people.

Sad thing is, the only politician on record for opposing outsourcing and H-1B is...Dennis Kucinich, a nut job. We are all screwed.

IT workers need to stand firm. If you are ever asked to fix work done by offshoring firms, ask for double your salary. If you are good at what you do, you should be well compensated. The big 3 automakers outsourced their work and look at them now...they need money to invest more in their China operations. Don't be cow-towed by your employer -- you don't need to work for a firm that is money-driven. America needs companies that are quality-driven!

Companies that outsource will soon be ashamed of themselves. It will mar the company like thick, black, billowing pollution coming from their smokestacks. As long as the public permits it and there is no outcry to take reactive measures, it will continue to worsen.

I occasionally read CIO insight just out of curiosity, though I used to be a more avid reader.

I find the articles on this site very sensationalistic with little corroborating evidence in other similar articles.

CIO Insight appears to simply write what sounds good on any given day. Today, IT offshoring is growing in popularity; tomorrow they will produce an article that it is actually decreasing.

In reality, most articles I have read indicate that IT is weathering the economic storm satisfactorily and many companies are actually re-thinking their offshoring strategies and bringing "the troops home" for the very reasons that the posters here have elaborated on.

I concur with Mr. Adams.

I don't understand this post. The report isn't published yet to the public and the numbers don't add up. Why not wait until all the facts are available instead of throwing this out and saying you'll have more info on the report in a few days?

Seems to be a bit on the 'fear-mongering' and 'needing to hit a publishing quota' side of things to me...

To me, things are bad enough as-is, we really don't need sensationalized headlines with no data to back it up at this point in time.

This happened before and it will continue to happen and Americans will do nothing about it. What percentages of the items in your home are made in America, by Americans? 5%? 10%? You probably don’t even know! I know I don’t. How many of you own GM or Ford or Chrysler vehicles? 25%? You see what I’m talking about.

We are the creators of this, not the CEOs. The CEOs are just doing their jobs. We made this problem when we choose a Toyota over a Ford, a DeWalt over a Craftsman, apples imported from Argentina instead of grown locally. We want cheap toys, cheap cars, cheap electronic equipment, cheap food, cheap clothes, cheap everything! It can't be made cheap in America because it costs too much to make it here. Why? Because American workers require too much money to live here, to live the American Dream.

Maybe, just maybe, if you and I stop buying foreign-made products, the outsourcing of jobs will stop.

Oh, wait, first I have to get a job (or two or three) so I can buy food and feed my family on imported food.

I did not have time to read all of the posts. The one thing most responders are missing is that the federal government has passed legislation that not only allows, but encourages, offshore outsourcing.

I have a relative that worked 25 years in Bank of America's San Francisco IT dept. According to this relative, BofA's in-house IT staff is at just over 10% of what it was only 7 years ago.

As long as laws allow companies to send virtually any American job overseas, not only IT professionals, but the entire job force, is at risk of outsourcing.

Just by quick overview, the only really 'safe' jobs are: auto mechanics, plumbers, chefs, doctors, nurses, construction workers and pizza delivery drivers. It seems that executives believe that any job performed using a computer can be done anywhere, which is essentially true, and it doesn't matter where or by whom the work is done so long as it saves a company money, improves the next quarterly report, and gets executives big bonuses as a result.

The problem has to be dealt with in a way that gives companies incentives to keep the jobs here. The single power that can do this is money and costs. But, it's legal to send the jobs overseas, so why not do it? That is what has to change.

When do we IT professionals stop reading blogs and venting our frustrations through useless 'comments' and start doing something to protect our jobs? We are intelligent people and we just let ourselves gent bent over by corporations, then go home, get online and start moaning,"Woe is me,... and poor, poor me,...". And that's all!!!

What do we really do to take action that actually results in reducing job losses to foreign outsourcing? Let me know, and sign me up today!

Maybe we need to take thousands of computers to Wa$hington and smash them on the capital steps. Oh, wait, we'd be arrested for improper disposal of dangerous materials.

What a bunch of wusses we've become.

The best thing I have done is tell my son to not go into anything related to IT. Plumber, electrician, etc. -- any job that has to be on site and needs someone who can speak some semblance of English will allow him inside the gated communities of what will be the haves, as opposed to those outside, the have nots.

I am from the "other" side, India, the supposed U.S. job snatcher! There is merit in the comments made by American IT professionals in response to this column.

Outsourcing to India started 20 years ago primarily as a cost-arbitrage exercise. This remains the 75 percent reason even today. Despite IT wages having risen four to five times the 1990 levels, it is still 35 percent of U.S. levels for comparable levels of experience. The very large availability of engineering graduates (most Indian IT workers are engineers who are good at mathematics, systems logic and hard sciences) has ensured they get to speed fast on new IT tools and techniques. They are willing to relocate and travel all over the world.

Today, Indian IT has moved up the value chain and large Indian IT firms go head to head against IBM, Accenture, HP/EDS, etc. in bidding for ultra-large IT contracts spanning the entire spectrum -- consolidation of the entire IT infrastructure, remote management of IT infrastructure, business transformation through new IT strategy and are now into buyouts of foreign IT companies. They have also set up support centers inside the US, Canada, Mexico to support clients in North and Latin America (and several in China to support Japan and Korea). Most of the staff in these foreign centers are local people.

The key differentiation between Indian and U.S. IT firms lies in their approach to training. Indian companies spend a fortune in constant training of their staff in new tools and techniques, but also on implementation methodologies, customer support issues and how to tap the vast knowledge bank comprising of reusable designs, code skeletons and objects, templates for mapping most business processes, automated software testing services and the like. Infosys has the largest IT training establishment in the world. It has a campus in Mysore city where it has residential accommodation for 4,000 trainees at any time. It formally trains its 100,000 employees at least 3 weeks in a year. New recruits are trained full time for 4 months.

The second reason for success of Indian IT companies is their approach to treating knowledge workers. Completely going against the grain of the traditional hierarchical nature of Indian society, the Indian IT industry is run more as a collegium where the "social" distance between the "management" and the "workers" is very low -- because both hail from the same lower to middle class economic background and share the same aspirations. International success and recognition has only bonded this culture even stronger.

I have been interacting with U.S. IT pros for over 30 years and find them exceptionally hard working, disciplined and committed, values I constantly remind Indian IT workers to emulate. Yet with the falling enrollments of U.S. high school pass-outs into engineering or computer science courses there is a shortage of skills at many levels.

The most glaring failure of U.S. companies is in ignoring the training needs of their IT pros. It is left to the personal initiative of the IT pro to train himself or herself with at best a tuition reimbursement facility! This approach is not unique to IT workers only. I believe the U.S. is losing out in manufacturing in general due to this myopic view, which considers training as a cost not an investment!

I wonder if any of the posters have read "The World is Flat" by Thomas Friedman.
It's the U.S. government and the G7 nations that have been pushing all the countries in the world to open up their economies for free trade and created the global economy and its associated issues -- "let the chips fall where they may."

Don't forget that 30 years ago the same was being said about manufacturing going out -- and Americans reinvented themselves from manufacturing to service economy.

I am pretty sure that Americans will reinvent again from routine programming to more of an architecture IT. Imagine getting cheap modules developed offshore and configuring them at will and reselling them.

Don't forget that in the next 2 decades, more DELL computers will be sold to India and China than anywhere in the world -- profits for DELL = profits for USA.

So instead of cribbing about offshoring, I suggest you invest all the money you have on smart companies.

As for quality of work, it's more to do with planning -- I have seen low-quality work in the U.S. also. If you only hire the lowest-paid people without a smart manager, smart architect and smart infrastucture, then that's what you will get.

But there are companies where they retain top onshore talent to oversee offshore work and they get the best of both worlds!

Oh last -- if you increase H-1B visas instead of offshoring, you can recoup some of the money back. The H-1B Visa holders have to pay taxes, FICA, etc. and they get to spend most of their money in the US -- thus the loss is not as great as when you actually offshore.

Offshoring jobs makes little sense these days as in other countries (such as India) wages are rapidly rising, terrorism between Pakistan and India is causing major stability issues in that region and undersea cables that connect the backbone of the WWW internet between U.S. and overseas is vulunerable. There are way too many risks, in my opinion, to risk your company's future. Just reported last week that all but one of the undersea cables in the Mediterranian was severed and many Middle East and Northern African countries could not get online to support business around the world. I think offshoring of jobs was good about 5 to 10 years ago, but there are too many downsides to it these days. If a company wants to save a few bucks in the short term, that's their right. But as we saw in the economic meltdown of Wall Street, all the so-called experts didn't know what the h@#$ they were doing and lost trillions. I believe offshoring is just another black hole someone has come up with to throw our money down because in the long run it makes little since.

Corporations should "lead by example." It should be a portion of the board of directors and several senior executives that are offshored and outsourced first. Then, if that is successful, they can keep working their way downward through the layers of management in the company until a balanced and diverse subsection is established. Then, they can make the outsourced/offshored group a subsidiary of the U.S. parent organization and auction it off for some real stockholder dividends and CEO bonuses.

PhoenixUSA wrote:

"Oh last -- if you increase H-1B visas instead of offshoring, you can recoup some of the money back. The H-1B Visa holders have to pay taxes, FICA, etc. and they get to spend most of their money in the US -- thus the loss is not as great as when you actually offshore"

This is a bogus agrument that has been debunked over and over. The H-1B visa is used to facilitate offshoring. The business model of the largest H-1B outsourcers such as Wipro is to bring in an H-1B who learns from the U.S. workforce how the business is run, then offshore the entire operation later. This results in a net loss of many highly skilled U.S. jobs.

If you don't believe, just look at the many Indian websites advertising BPO (business process outsourcing).

I'm not happy about this at all. The bean counters love the cheap rates they pay for offshore work, but they're getting sold a bill of goods. I've been working with Malaysian, Phillipine and Indian offshore software development teams over the past year and I am not impressed. The staff is very inexperienced and do not possess the skills that were touted. Project planning is falling apart, the work product is poorly done and does not meet requirements. I'm doing the best I can to keep the projects moving and thank goodness I am not in the position of having to take a hit when the deadlines aren't met. The offshore teams consist of the ones who did not have the language skills or technical skills to get H-1B visas -- communication is torture. Much of the time I will suggest ways to code some logic, see the badly interpreted result, re-write it myself and email it to them, hoping they will correctly place it back where it should go without mucking it up again. I do this tactfully and show respect for the individuals and and am definitely not making enemies. My boss is so committed to the concept that I cannot complain without risking my own job -- I don't know if it's a bonus he's getting or if he's getting bribes but I'm pretty sure there's significant money in it for him; conspicuous consumption is occurring. The situation is very wrong -- my employer will not hire U.S. entry-level staff, but I'm dealing with some of the greenest staff I've ever worked with in these offshore teams. The work will go on, the deadlines will be missed and the organization will take a financial hit where the staff will be cut in order to make the budget and the customers move to the U.S. competitors who are staffing up with my former coworkers. Maybe this is OK -- the circle of life, so to speak. I just need to find the next landing spot.

At my firm, some groups are actually bringing software development work back onshore and using a combination of in-house talent and onshore, on-site (non-H-1B) contractors. Some other groups are clinging to the desperate illusion that offshore development is better, faster & cheaper, despite a staggering pile of evidence to the contrary within our firm.

Our experience shows that some software development work can be successfully performed offshore IF -- and only if -- 99.8% of the ambiguity is removed and ultra-tight specifications are written and an air-tight process for verifying and validating offshore work on a very frequent basis is institutionalized. By the time these costs are added to the "cheap hourly rates" from India, Vietnam, Eastern Europe, etc., the effective difference is very little and delivery risk is increased.

We're finding that, in many cases, a well-run, agile-like software development project yields **higher quality the first time** at total costs comparable to using offshore development staff.

I have never been a fan of unions, but the more careers (they are more than just jobs) are sent overseas, the more the U.S. suffers. There was a push for an IT workers' union awhile back. I may have changed my opinion in having a collective group working to save our livelihood.

It is evident that outsourcing has been increasing in popularity and there is nothing that can be done to stop it from happening. The main objective of any and all businesses is to increase profits and overall revenue. Outsourcing saves LOTS of money for these businesses by cutting costs. It is important for everyone to realize that we are no longer competing with people in the U.S. for jobs. We are now competing on a global scale. The best thing that we can do for ourselves is make our services more valuable, that means working harder than before to keep ourselves ahead of the competition, not just those in the U.S. but the entire globe.