Outsourcing slowing down?

[clearedforlanding]

I think that the pace of off-shoring has slowed as the early adopters over the last decade or two have "picked their low hanging fruit". With mixed results.

The promised benefits have been not always been realised ( significant cost reduction, increased capacity and access to a wide range of technical skills). In addition the problems caused by off-shoring (including but not limited to responsiveness, ownership, agility, loss of control and loss of innovation ) have begun to outweigh ( or at least seriously impact ) on the business case of moving core business functions to a 3rd party.

I know of several FTSE100 companies who are in the process of reversing some of their previous off-shoring decisions.



I know dozens of people who's roles were at a various times off-shored & outsourced. The thing that strikes me is that I don't know anyone who failed to find a new job within a short period of time. The UK created jobs even as offshoring picked up speed. Think of the number of "Architects" or "BA's" or "Change Management" specialists who suddenly popped into existence.

Will "the jobs" come back to the UK?

No. The jobs will simply disappear. They will be automated away.

You need to remember that IT is all about change. And that change has not stopped. The big drivers around IT at the moment are IaaS, PaaS & SaaS aka "The Cloud".

The impact of these will be significant and most of the hit will be felt by the Indian offshore providers, the likes of Infosys and Wipro et al. They have a flawed business model. Basically it's "Land and Expand". Try to get as many people working on a day rate as possible. This was fine when their developers were cheap and the projects easy.

But why would a CTO sign-off on the risk and expense of running a project to create something like a "Change Management System", which would involve BA's developers, infrastructure guys, network guys and a whole raft of other roles, when he could simply subscribe to a SaaS version and push the whole responsibility to another organisation? An organisation who's only purpose in life was to provide "Change Management Systems"? An organisation who would have an extremely deep knowledge of the subject, far more domain knowledge than the in-house IT team OR the external service providers could ever muster.


So the jobs never really went away ( the job-titles changed ) and therefore are not coming back either. Instead there will be a new wave of innovation which will sweep through the "in-house IT team" AND severely damage the offshore providers.

The next decade is going to be very tough on the Indian IT industry.

This is an excellent post. (x)aaS is on nearly every ppt in nearly every stakeholder meeting I attend in governance. (x)aaS SCALES and can be provisioned & deployed in one fell swoop across multiple territories. Operations is mostly dead.

It is a risk to Indians & Contractors alike. A huge one.

If you have SDN, NFV & OpenStack come and join the party, while it lasts.

[AtW]

Besides India, we have Montreal, Mexico and Philippines. The Mexico experience is not good. Commutes are regularly held up by armed gunmen.
One Mexican lady was asked to train in Glasgow for 4 weeks. She requested that if she was kidnapped then clientco would pay the ransom demand!

What did the client say - that the real danger is not on the train but on the mean streets of Glesga...

[Anaida9999]

thanks for the replies , sounds good, especially jobs coming back to Birmingham. I left RBS 10 years ago as they sent jobs up to Scotland and then to India and Poland, mainly UAT test jobs left in Birmingham RBS as far as i am aware so would be good to see jobs coming back :-)

[BrilloPad]

A couple of my clients have outsourced to Indonesia, the Philippines, and interestingly, Argentina.

Besides India, we have Montreal, Mexico and Philippines.

The Mexico experience is not good. Commutes are regularly held up by armed gunmen.

One Mexican lady was asked to train in Glasgow for 4 weeks. She requested that if she was kidnapped then clientco would pay the ransom demand!

[greenlake]

The companies I've worked or contracted for since 2002 have either tended to outsourced to India or Eastern Europe e.g. Poland, Hungary. So the Eastern European thing isn't new.

There were a few who outsourced to two places such as India AND Eastern Europe, OR India AND some other random country like Turkey or Vietnam.

A couple of my clients have outsourced to Indonesia, the Philippines, and interestingly, Argentina.

[SueEllen]

its off to eastern Europe now.

The companies I've worked or contracted for since 2002 have either tended to outsourced to India or Eastern Europe e.g. Poland, Hungary. So the Eastern European thing isn't new.

There were a few who outsourced to two places such as India AND Eastern Europe, OR India AND some other random country like Turkey or Vietnam.

[AtW]

Aye.

Hope soon to follow by Deutsche Bahn...

[BrilloPad]

Outsourcing is dead. Now it is near shoring.

Glasgow is already good at this. The next is Birmingham.

Eyes of banking world on Birmingham as Deutsche Bank expands - Birmingham Post

Get your BTLs in now before the price goes up....

[cojak]

its off to eastern Europe now.

WVS.

Poland is big at the moment, IBM has a large presence there.

But also WTTAS.

[tomtomagain]

Hi,

I just wanted an opinion on whether outsourcing of IT jobs to India is slowing down

I think that the pace of off-shoring has slowed as the early adopters over the last decade or two have "picked their low hanging fruit". With mixed results.

The promised benefits have been not always been realised ( significant cost reduction, increased capacity and access to a wide range of technical skills). In addition the problems caused by off-shoring (including but not limited to responsiveness, ownership, agility, loss of control and loss of innovation ) have begun to outweigh ( or at least seriously impact ) on the business case of moving core business functions to a 3rd party.

I know of several FTSE100 companies who are in the process of reversing some of their previous off-shoring decisions.

and do people think if jobs will return back to the UK in the future?

I know dozens of people who's roles were at a various times off-shored & outsourced. The thing that strikes me is that I don't know anyone who failed to find a new job within a short period of time. The UK created jobs even as offshoring picked up speed. Think of the number of "Architects" or "BA's" or "Change Management" specialists who suddenly popped into existence.

Will "the jobs" come back to the UK?

No. The jobs will simply disappear. They will be automated away.

You need to remember that IT is all about change. And that change has not stopped. The big drivers around IT at the moment are IaaS, PaaS & SaaS aka "The Cloud".

The impact of these will be significant and most of the hit will be felt by the Indian offshore providers, the likes of Infosys and Wipro et al. They have a flawed business model. Basically it's "Land and Expand". Try to get as many people working on a day rate as possible. This was fine when their developers were cheap and the projects easy.

But why would a CTO sign-off on the risk and expense of running a project to create something like a "Change Management System", which would involve BA's developers, infrastructure guys, network guys and a whole raft of other roles, when he could simply subscribe to a SaaS version and push the whole responsibility to another organisation? An organisation who's only purpose in life was to provide "Change Management Systems"? An organisation who would have an extremely deep knowledge of the subject, far more domain knowledge than the in-house IT team OR the external service providers could ever muster.


So the jobs never really went away ( the job-titles changed ) and therefore are not coming back either. Instead there will be a new wave of innovation which will sweep through the "in-house IT team" AND severely damage the offshore providers.

The next decade is going to be very tough on the Indian IT industry.

[vetran]

Hi,

I just wanted an opinion on whether outsourcing of IT jobs to India is slowing down and do people think if jobs will return back to the UK in the future?

its off to eastern Europe now.

[Anaida9999]

Hi,

I just wanted an opinion on whether outsourcing of IT jobs to India is slowing down and do people think if jobs will return back to the UK in the future?