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To: Johnny Canuck who wrote (40598)	1/9/2004 6:40:44 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69345

The opportunity cost of offshore 1/9/2004 4:48:24 PM - A CIPS survey reveals that most believe outsourcing functions overseas will have a detrimental effect on the Canadian economy. A lawyer, a recruiter and a software CEO comment on the results. Plus: The future of mid- and high-level management by Shane Schick TORONTO -- The offshore outsourcing of technology jobs will have a negative impact on the viability of the IT industry in Canada, according to a majority of professionals surveyed by the Canadian Information Processing Society. At a monthly meeting of the association's Toronto chapter Thursday evening, members invited outsourcing experts to discuss a series of statistics culled from a survey of approximately 111 senior IT professionals. Although more than half told CIPS they have outsourced some IT functions or are considering it, 69.4 per cent said they believed the trend does not bode well for the sector's overall health. Only 33 per cent said they believed offshore outsourcing would help the Canadian economy. The research reflects the growing fear among Canadian IT workers that their skills may be obsolete if lower-level programming work is be moved to India or elsewhere, said a panel that commented on the survey results. From the employer's perspective, however, offshore outsourcing simply a matter of dollars and sense. "What is the difference between sourcing a product from offshore? We all have radios here, and I doubt many of them were made in Canada," said Gabor Takach, a lawyer who leads the technology group at Tory's LLP. "This trend (offshore outsourcing) represents a concentration of expertise and a new and efficient way of delivering a service." Paul Harrington, a consultant to retail, small business and marketing companies, said some IT workers may have reason to feel paranoid. "When an industry disappears -- like buggy whips -- they just disappear," he said. "Everybody in every industry has to take a look at what's happening in their industry. This is an industry that's in a great deal of turmoil at the moment." Kevin Yan, CEO of global software development services firm Arackal Digital Solutions, said he looks at offshore outsourcing as a productivity tool because it allows companies to eliminate low-value coding tasks. "If you have a better way of doing business out there, why wouldn't you do it?" One CIPS member, however, asked the panel whether they would still encourage their children to study computer science, given that the traditional entry-level programming positions may be outsourced to foreign firms, making their job search more difficult. Takach admitted this could be a pitfall of the offshore approach. "Unless we manage it properly, we won't have the proper feeding ground for the more senior positions," he said. John Chettleburgh, a staffing industry consultant and former vice-president at CNC Global, pointed out that most offshore outsourcing is done by Canada's largest firms, which means some of the jobs may not disappear entirely. "It could mean a renaissance for these kinds of jobs in the small and medium enterprise market in Canada," he said. "That's something I'd like to see." While panelists told CIPS that coding, testing, call centre work and some back-office banking activities were the primary candidates for offshore outsourcing, Yan warned that some skill sets are best kept at home. "Business knowledge is not easily replicable," he said, adding that the ability to analyze processes can be a strong complement to an IT background. "You're bound to introduce risk into projects if you don't also integrate some onshore resources. If you don't do that, I would say you're bound to fail." Chettleburgh agreed, adding that corporate enterprises have to do a better job of retraining employees potentially affected by offshore outsourcing and better capturing the knowledge they have learned about their organization. "One of the preconditions to change is to have a sense of urgency," he said. "Sometimes we don't see that there's a transition coming in terms of what's happening with our jobs." Takach described himself as part of a "last generation" of students who graduated with an engineering degree who might have qualified for a management position. Today, he said, the situation is greatly changed. "You can still study computer science, but not with a view to just turning out code," he said. "We're culturally indoctrinated (in North America) to want to advance and move ahead to bigger projects," added Yan. "In India, it's different. They like doing the same thing. They appreciate the stability of the job." Although some firms, like EDS, are creating "near shore" outsourcing operations in Canada, Chettleburgh said the rising Canadian dollar could "obliterate" the economic benefits of that model. Comment: info@itbusiness.ca