Outsourcing IT projects and services is a topic of great debate. Research organisations such as GartnerGroup are predicting the large-scale movement of IT services, support, and deployment projects from internal IS departments to external service organisations in the years to come. How is this likely to affect the career of IT professionals?
Outsourcing has always been with us in one form or another. From deferring a planning and deployment job to an outside consultant to paying IBM (or some other vendor) to provide additional support for your AS/400 through a service contract, outsourcing is by no means new. However, the dominance of technology in business during the past 20 years has definitely pushed the envelope in creating a need for a more technically savvy workforce and more technically skilled workers. And this is no surprise to all of you - because it's the reason you are in your present job.
The growing demand for skilled technology workers and the difficulty in retaining those workers, along with the explosion in the need for sophisticated technology resources in small to midsize businesses, have created a big cost problem for many companies. This is the age-old issue of supply and demand. As a result, you can bet that most business leaders are not just looking to outsourcing as the means of buying specialised competencies for a particular project. They are looking to outsourcing to help "commoditise" the labour market.
Looking for an outsourced future?
The shift for many technology workers would be from corporate IS staff positions to similar positions at specialised IT services organisations (ITSOs). ITSOs will provide a range of outsourcing options - everything from performing server backups to hosting e-mail messaging infrastructure and business process applications, such as those running on PeopleSoft, Baan, or SAP platforms.
Based on the ITSO model, many IT workers will begin to specialise more in their job functions. For example, as a backup operator one might be responsible for performing and verifying backups for dozens of companies.
Given this focus, you probably won't be able to diversify your skill set much. However, an ITSO can start bringing in less qualified candidates and training them strictly as backup operators, thus creating a commodity market. For most of you, this will probably make your lives easier, because you won't have to perform backups anymore. And that will leave you more time to focus on more important projects.
On the high end, ITSOs might utilise more qualified personnel as project managers and on project implementation teams. These workers will handle more complex product implementation and tailoring issues, such as writing custom Notes or Web applications to support a specific customer business problem, or solving the ITSO's strategic architecture problems.
One thing that ITSOs won't be able to provide, though, at least in the short term, is detailed knowledge of a customer's business processes, strategies, politics, and industry-specific idiosyncrasies. That is, ITSOs will be task masters at technology problems, but assuming large-scale outsourcing of technology infrastructure, there will still be a need for the technology/business integration specialist and a core IS staff that holds the business's interests sacred.
I suspect that as ITSOs grow, they will attempt to provide customers with more tailored solutions that accommodate industry-specific business models and challenges. But the reality of this is probably a long way off.
For the IT professional, outsourcing will definitely change the career landscape. Although it is already clear that some technology areas can and will be commoditised through an outsourcing model, it is still unclear what the coming trend will mean for more advanced high-technology employees. In general, the outsourcing model lends itself to less job choice, more role specialisation, and less diversification in skill set for IT professionals.
Whether the outsourcing will provide more lucrative opportunities for IT professionals is largely guesswork. I suspect that in the short term ITSOs will need to pay more to attract talent, but as the model adapts, career growth and promotion will slow in the long run because of the labour commodity.
Jeff Symoens is a regular columnist with ARN's sister publication Infoworld