Is likely going to kill us for future IT support. Well at least those of us in the US, Canada, Germany, UK, and other Western Europe countries.
Right now we seem to be in a phase where we are shipping low end tech positions to India or Costa Rica or Mexico or various not so well to do Slavic countries. Folks are doing this because it is cheaper right now.
Up front this is already hurting us just from the standpoint of customer service and pure understanding. I haven’t really heard anyone saying anything good about any experiences of getting someone in India to help them with their computer issues – honestly, it is a standing joke anywhere you go. Be this in the home market with Home PCs or the business market. Trying to get a point across at times can be an exercise in pure frustration as cultural barriers crop up and get in the way with how things are described and understood and not to mention accents and word usage.
Of course, companies that take on IT support for non-IT based companies or even IT orgs within non-IT based companies really don’t have much choice in the matter, they are told to make it cheaper and cheaper and the way they find to do this is to boot some American/Canadian/Western European/Englishman in a Level 1 or Level 2 position out of a job and give it to four people from some low cost support center who are cheaper together than the one person who got booted. Even if there were a more expensive “we won’t offshore the support” option for companies to choose, most wouldn’t choose that option because they want it to be cheap.
Long term this is where I see this going
1. The companies where people are getting booted out of lower level positions for offshore resources are going to find that they will become more and more dependent on these low cost centers until such a time that they will have no onshore resources at any level up through the highest tech levels. Why? Where do the high tech level people come from? You don’t train them… They are low level tech people that grow into higher level tech positions from all of the experiences they have gone through. If all of the low level people are offshore, eventually they will grow into higher level tech people and the onshore higher level tech people will retire or even be replaced by the still at this point cheaper offshore folks. Eventually, you hit the no onshore technical resources at any level. As one friend mentioned to me a few months ago… Look at what happened in the steel industry between the US and Japan. Initially Japan just did the low end stuff that Americans were happy to foss off… What did Japan do later? Took that experience and started producing high end stuff at a cheaper price. As the US steel business suffers the Japanese steel prices can come up and eventually overtake any high price points the US steel ever had with newer higher price points because we have no options.
2. The cost of the offshore resources is going to go up. It will stay just below what it is for onshore resources right up until the point that it becomes a fact that there are no onshore resources and then all of those companies pushing in that direction will get a nice surprise.
This problem is due to big business and politics and the lowest cost now mindset. I think currently the laws etc are such that it says, sure go ahead, do this, it is a great idea! But then the politicians passing these laws don’t have anything to worry about, in fact most everyone in Washington can feel pretty safe, the government stuff isn’t allowed to be offshored. How about though, and I say this facetiously but man it would be fun, we offshore our senators, judges, congressmen, president, etc? I expect if that were a reality, laws would be different.
And if you don’t want to do this through laws, how about we offshore corporate executives… Sorry Steve Ballmer/Bill Ford/Samuel Palmisano/Mark Hurd/Richard Wagoner/etc, we found 50 people in Costa Rica who will do your job at a cost per year that is less than you spend on coffee for your personal household in a day… In fact, we can get everyone in the country for less than we pay you per year… If something like that happens I expect companies wouldn’t be in such a rush to push jobs offshore into low cost centers.
The thing that confuses me though is that our politicians and heads of corporations can’t really be that stupid as to not see what is going to happen down the road can they? Or are they?
joe
P.S. Note this isn’t a racial thing. I have several very good very intelligent friends who came here from India. But they were so good, they left India and came to America or England to get a job because they could. When I have asked them they have also said not so good things about the support (and the people providing it) coming out of India…
Very good rant Joe,
“most everyone in Washington can feel pretty safe, the government stuff isn’t allowed to be offshoredmost everyone in Washington can feel pretty safe, the government stuff isn’t allowed to be offshoredâ€
You hit the nail on the head there. Not only do the politicians not worry but many of the IT jobs in the DC area require security clearances so people in the IT field (in DC) don’t seem to worry either.
I don’t think they really care what is going to happen down the road. All they see is the next quarter report and the next earnings report. This most likely won’t be a problem on their watch and as long as the stock does ok then they are happy and rich.
I’m just not sure how you fix it. You can’t tell businesses that they can’t outsource because that goes against free enterprise. Maybe enact some type of “outsourcing tariffâ€. You want to outsource fine but it will hit you come tax time.