by Jack Thornton

Created on: March 13, 2009

Outsourcing has been a trend for many years now. At first, the biggest use of outsourcing was for labor intensive semi-skilled manufacturing. These were areas where the cost of labor was a significant portion of the cost of production. Finding countries where people are willing to work for 1/10 or 1/20 or less of the wage required in a developed country produced huge gains in profit margins even while prices were lowered. Long term, the margins have retreated to historic levels and the cycle of finding new, cheaper locations for manufacturing continues.

This is not limited to just manufacturing however. Higher skill jobs are being outsourced too. This includes IT skills. From server administration to the help desk many IT jobs have been sent to service companies and overseas. This trend has continued to work its way up the skill tree in IT. Now many basic programming tasks are being sent elsewhere.

Many IT personnel are worrying about their jobs being threatened, especially when the economy takes a downturn and their company is being squeezed by falling profits and increasing costs. The needs of the business do not decrease under those conditions. Instead, the focus comes on choosing the best needs and finding ways to get more for the same expenditure. In an uncertain environment, that often means ussing contractors and outsourcing in place of permanent employees.

So what can a technical indicidual do to avoid being laid off? What is the best way to avoid being marginalized or replaced?

Businesses are most concerned about handling risk. The greatest amount of risk is seen in losing control of the core functions of the business - what they make their money doing or risk losing money at. This generally means the financial, regulatory and creative portions of the business. Accounting systems, order taking and tracking, manufacturing systems, regulated reporting and systems that support research and development are generally the last jobs to be outsourced.

Having the skills needed to maintain and develop those systems will be the best way to remain employed. Thus, if an ERP system is at the heart of the finance and accounting systems of a business, being able to configure and develop that system is very useful. In a manufacturing company, the safest positions may be with product tracking and equipment control systems. In closely regulated industries (like banking and health care, among others) responsibility for audit and reporting systems may be the safest. Learning how those systems operate and knowing the tools used to maintain and develop them will be the best way to optimize IT skills.

Even in a company hit hard by outsourcing, there are other positions that may thrive for skilled practitioners. These would be project managers who are meticulous and able to guide remote teams to clearly defined goals. To fill this role, additional education and training is best. An MBA or other advanced degree, certification as a project manager and demonstrated success leading small and large teams will be the best optimization of skills.

Even in environments where outsourcing is a constant threat and reality, companies do not outsource IT entirely. Recognizing what the most important systems are to the company and having the skills to work with those systems and manage outsiders is a great way to protect a job. The skills obtained in doing that will do more than just protect against being outsourced however. Even in the worst case scenario of being outsourced, the more skills of that type somebody has, the easier and quicker it will be for them to obtain a new position which they can then work to prevent being outsourced.

Learn more about this author, Jack Thornton.
Click here to send this author comments or questions.