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Article by Mohan Babu

The next president’s agenda, outsourcing and local jobs

The impact of the US presidential election on the outsourcing issue remains a subject of heated debate. Mohan Babu focuses on the far-reaching consequences of the next president’s IT agenda

The impact of the US presidential election on the outsourcing issue remains a subject of heated debate. Mohan Babu focuses on the far-reaching consequences of the next president’s IT agenda

There is a tremendous amount of buzz about offshore IT Outsourcing (ITO) and sourcing of business processes a.k.a BPO. It is not really news that although most companies sourcing and receiving work across the globe are playing a low-key game, the issue is a hot button nevertheless: Especially given the fact that this is an election year in the US. A recent cover story in the popular CIO magazine talks succinctly about the implication of how “the next president’s IT agenda will have a profound impact on IT and the way corporates do business.” While this is not the only article, and not the only magazine talking about the trends on election-technology nexus, the audience of the magazine is definitely the “C” level executives most IT companies dream of targeting.

The article in CIO magazine titled “The Next President’s IT Agenda” talks about five facets:

  • Critical infrastructure
  • Jobs
  • Privacy
  • Corporate Governance
  • Information Technology

The suggestions in the article may border on hypothesizing different scenarios; however the article clarifies “what the next president does will have a profound impact on IT and the way corporations do business. Here are the decisions he needs to make on critical infrastructure, jobs, privacy, corporate governance and the future of IT.” For instance, national security has been on the radar screen of policy makers in Washington for a while and the government is beginning to take a closer look at cyber-security since a tremendous amount of critical data—public and private—now passes through the Internet. Privacy has also been a hot-trigger issue and is a corollary to the increasing focus on security, especially since there is greater scrutiny of individuals’ information and data passing through public systems. Corporate governance too has got a shot in the arm recently with the passage of Sarbanes-Oxley Act, leading IT executives scurrying for viable technology solutions to address the requirement for increased diligence for financial reporting. The writer goes on to talk about the US government’s ‘power as the largest IT consumer on the planet’ that can, in a subtle way, drive the direction of IT and adoption of best practices.

Given that outsourcing has been a really capricious issue this year, many in the US are relating the stagnant job market—especially for high-tech workers—to the fact that companies are increasingly outsourcing high-tech positions offshore. Though the offshoring camp is equally divided between those for and against, even the proponents of sourcing realise that jobs in native lands are a very sensitive issue. The next president will have his job cut out (pun intended)—to ensure that the economy not only rebounds fast but also leads to a substantial increase in domestic jobs.

In all, this rhetoric about outsourcing and job loss, the fact that lost jobs are not really synonymous with outsourcing is getting lost. The fact remains that there could be several other factors in the economy that could lead to a propping up of employment in different sectors; however opponents of global sourcing continue to use job loss as a key platform to make their point.

The reader of this column, perhaps a manager at an Indian, Irish, Chinese or multinational software company, is probably extrapolating what these trends means to him/her, in the context of projects they manage. Even a cursory look at the list suggested in The Next President’s IT Agenda should give an idea of the opportunities that could open up based on the decision the incoming president takes. However, addressing the ‘opportunity’ of creating jobs in local economies will have to be on the top of such lists.

Given the sensitivities of some of the issues being discussed, it won’t be surprising to see stronger alliances emerge between companies in India and the West. Such alliances or partnerships could be a win-win way of not only addressing the technical challenges of sourcing, and addressing security concerns, but also a means of providing more jobs in home countries. Scenarios one could think of may include setup of joint ‘near shore’ or ‘proximity’ development centers employing local managers, coordinators and experts in global delivery. Such new opportunities could address both the issues of sourcing: the need to have local-faces manage local operations, and to create jobs in host countries.

Isn’t this a win-win—lowering costs in home countries, while expanding global opportunities that globalisation is supposed to usher in?





About the Author

  • A Bio and profile of the author, Mohan Babu, can be found at his homepage
  • Mohan has authored a book on Offshoring and Outsourcing (Publisher McGraw Hill, India), a link to which can be found here
  • Mohan has also authored an Online book on "Life in the US," available for free download.
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    ©Mohan Babu: All Rights Reserved 2005

    Mohan Babu is an international consultant trying to find the ‘sweet spot’ where IT meets business. E-mail: mohan He is also the author of a recent book on "Offshoring IT Services"

    All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

    Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. This Article was originally published in Express Computers


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