In last few years there has been a major shift in the way most technology departments operate as there is increasing utilization of both offshore and inshore companies to perform different IT functions. It is widely believed that this fast changing landscape of traditional IT setup brings opportunities for the higher-ups in the hierarchy to cut operating costs by moving jobs to specialist companies. For obvious reasons, outsourcing companies or managed services providers have been pretty upbeat about this change.  

On the other end of the spectrum this phenomenon often becomes a political hot button and has generated a lot of negative emotions not only among IT work force but also within the western media. It will gather more heat as 2008 U.S. presidential elections come closer. At the very onset of this change few years back many among the media had even predicted a dooms day scenario for skilled IT workers in the west.

The Reality 

In reality, the truth lies somewhere in between. With the improvement in communication technology and availability of well qualified and trained global pool of workers this industry has been going through some re-alignment. Some job functions like help desk, monitoring of systems, networks and database monitoring moved to managed service companies. This resulted in significant displacement and uncertainty in the IT work force. While this trend of using managed service providers are fueled by improvement  in telecommunications and cost advantage in the emerging economies like India and China, some of these service providers are in the western hemisphere and are profitably competing with established providers from India and China.

Looks like some of that pessimism may not hold good.  According to money magazine and CNN’s latest survey on “best jobs in America” IT jobs were still among the top 5. Industry analysts predict “Off shoring or not, growth in IT jobs is expected to be faster than average”.  Same is perhaps true in Europe where there is shortage of trained IT professionals. In countries like India which are at the forefront of this process companies are competing against each other to retain skilled knowledge workers.    

Additional skill set requirements  

In fact, IT governance is going through a significant transformation process which brings opportunities and challenges for the workforce and industry in general. In today’s globally dispersed work environment new technologies, processes and emerging skill set requirements are fueling this change. Technology workers are increasingly being challenged to become more flexible and acquire new technical and management skills to remain competitive. Skills to be culturally adaptive, managing and working with a global work force are no longer considered “good to have” skills instead have started becoming a job requirement.

Building relationships and creatively managing vendors, successful implementation and management of this business model is being widely recognized as best practices of IT governance. Any emotional opposition may only prove detrimental to the growth of the individual and the company. There is a tremendous gap between supply and demand of experts who can manage the project in this kind of fast changing business environment. At this point there are no fixed standards or rules of engagement. Both the user and service organization mangers are learning from each other. It’s time to exercise extreme caution, apply lot of common sense and be extremely detailed oriented when finalizing and managing these kind of projects.    

Process optimization and automation 

Technology specialists who can align there skill sets in the areas of project management, process optimization, understanding system automation tools and efficiencies of scale stand a better chance of success. Technology vendors are increasingly focusing on the enterprise management tools to manage today’s complex multi client business systems. Usage of remote server monitoring and diagnostic tools has increased. Mushrooming of system log management tools from companies like Splunk systems, Microsoft, Intersect Alliance and availability of open source log tools represent a trend in this direction. 

Security Expectations 

More than ever before technology professionals are being challenged to protect sensitive information in this globally spread out multi vendor corporate environment with different security thresholds, legal setup and compliance laws. There have been many instances of sensitive data thefts bringing in bad publicity, law suits and breaking of contracts. It is said that only 14 percent of the clients review their vendors’ information and privacy practices.

In this context security experts and technology managers may have to take into account that complexity of data protection is increasing. With increasing online frauds, back ground checks of the onsite and offsite resources, usage of latest standards in encryption technology and risk assessment by experts should be part of the process. Any lack of due diligence in this area can pose a serious risk to the business.    

Food for thought for medium and small entrepreneurs  

While security challenges are being gradually addressed lack of control over outsourced projects and high employee attrition rate is becoming an impediment in some instances. Some companies in the quest to keep software development costs in control have decided to start their offshore operations instead of getting the work done through off shore contracting companies. In this scenario it is believed that local managers will have better control over the entire life cycle of the project and stand a better chance of motivating and retaining critical offshore resources.  

Even small businesses with limited resources have started leveraging this trend by getting their website and an order management system completed offshore at a fraction of a cost that they would have paid locally.

As more and more individuals and businesses are getting wired perhaps there are as many opportunities as there are challenges and threats.