Sending IT Offshore

There is even an argument that sending some work offshore rebounds to the advantage of American IT specialists, enriching their jobs by freeing them from dull tasks. When a company begins to farm out IT operations to Asia or Europe, the first thing to go usually is the high-tech version of low-level grunt work: writing computer code to set specifications. After that might go testing, verification, and validation of programs, followed by system maintenance. Higher-level activities—defining business needs for new software, creating the system architecture—usually remain at home.

“When we talk to a growing company, we say that American jobs will be enriched when the coding is done elsewhere,” Dasgupta says. “It will mean that your in-house people get elevated from programmers to architects and product managers. We say, ‘You will get to manage a global team to bring a product to market. Imagine what that will mean to your resume, your career.’”

What to Send?

•Companies spend money on IT in three basic ways, Kridel says:

• To maintain their existing systems—“to keep things running”

• To become more efficient and save money by changing a business process—billing, personnel administration, or what have you

• To “do something to grow the business” and gain a competitive advantage

“Maintenance and efficiency wind up eating 70 to 80 percent of the IT budget in most companies,” Kridel says. “So you’re left with 20 to 30 percent to move your business forward and please the stock market.”

Any of those three basic types of work can be done offshore, she says, but the main impetus is to get rid of the first or the second. At her own firm, “all of [Ambient’s] billing and project-tracking systems are maintained in Vietnam,” Kridel says. “There’s no reason to spend our management time on that. It runs on its own.”

When considering offshoring options, clients find that local consulting firms tend to specialize in particular areas. CS Solutions, for instance, concentrates on data warehousing applications, with clients that include Geico, American Express, and Hallmark Greeting Cards. About 80 percent of CS’s work is done in the United States, says director of business development Rick Hults; 20 percent is sent to India.

Coherent Solutions (not to be confused with CS), focuses on software development for small to mid-market companies, which Wisniewski defines as those with revenues of $3 million to $1 billion. “Almost any complex device today requires software—automobiles, calculators, even refrigerators,” he says. His firm helps clients create such software, as well as business applications and systems for manufacturing environments. Some parts of client projects usually are sent to Minsk.