Romania: What Happened To The “Giant Sucking Sound” Of Outsourcing
Outsourcing HAS had an effect on U.S. I.T. but it has NOT been what the convention wisdom predicted. And understanding it is the key to having a real understanding of outsourcing.
The survey data shows that there are about 16% less programming jobs than in 2001. Everyone knew that heads-down coders would be affected by outsourcing (although that isn’t exactly true either…something we’ll examine further in another blog). On the other side of the ledger, I.T. management jobs have skyrocketed about 20% (70,000). Almost no one realized that those jobs would explode and practically offset the loss in programmers. And a person managing work tends to be paid higher than the people actually doing the work.
Where did these management jobs come from? I call it “Affordability Magnification”. Say you’re a typical IT manager in a small to midsize company with a budget of $1,000,000 for programming. Before outsourcing you ran 4-5 projects a year. Now those projects are just 1/10th the cost. If you still run 4-5 projects, you are going to have a ton of money unspent at the end of the year. The CFO would be more than happy to take it from you and give it to some other department next year…so you can’t do that. Instead, you’ll of course spend every last dime. And you’ll run 40 projects and hire a bunch of new project managers to manage them. And that is what we are seeing.
