or . . . how do i expect to land a high-paying job when most it work will be performed in india?
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Or . . . How do I expect to land a high-paying job when most IT work will be performed in India?. F. Edwin Harbach Partner, Accenture October 3, 2003. History. The year 2000 situation artificially increased demand for IT services in the late 1990s. Fix to legacy systems - PowerPoint PPT PresentationTRANSCRIPT
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore?
Or . . .
How do I expect to land a high-paying job when most IT work will be performed in India?
F. Edwin Harbach
Partner, Accenture
October 3, 2003
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? HistoryHistory
The year 2000 situation artificially increased demand for IT services in the late 1990s.
– Fix to legacy systems– Accelerate replacement of legacy systems to
avoid date issues
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? HistoryHistory
The dot.com phenomenon increased IT expenditures.
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? HistoryHistory
The robust economy further increased demand.US Gross Domestic Product 1990-1999
1,000
3,000
5,000
7,000
9,000
1990 1993 1996 1999
Source: IMF (International Financial Statistices Yearbook, 2000)
US
$B
n
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? HistoryHistory
The offshore movement was still in its infancy.
Size of Industry
Service Line
Delivery Model
Industry Structure
Peak Contract Size
Customer Profile
Industry value to customers
Under $1 billion
+ E-biz, ERP, Y2K
Staff Aug., Onsite
Big 5 increase share and SME growth
= US $5 million
Large Fortune 500
+Quality, productivity
Phase II1995-00
Negligible
App development & Maintenance
Staff Aug., Onsite
Large # of startups
< US $5 million
Large Fortune 100
Lower costs
Phase I1985-95
Period
Source: NASSCOM
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? HistoryHistory
This “perfect storm” resulted in a seller’s market for IT professionals.
– Multiple job offers for new graduates– Signing bonus the norm ($5K - $10K)– Escalating salaries– Tuition reimbursements/relocation bonus– Focus on workplace incentives
• Concierge programs, casual dress, pool tables at work, bring your pet to the office, etc.
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? Current RealityCurrent Reality
Most of the factors driving IT demand in the late 1990s are gone . . . or significantly reduced.
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? Current RealityCurrent Reality
In retrospect, Y2K seemed “much ado about nothing”.
Y2K
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? Current RealityCurrent Reality
The dot.com craze has moderated.
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore?
GDP Growth from 1995 through 2002
0
1
2
3
4
5
CAGR 1995-1999
2000 2001 2002
% G
row
th
United States Japan France Germany UK
The US and several major global economies are in a recession.
Current RealityCurrent Reality
Source: OECD August 2003
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? Current RealityCurrent Reality
Labor arbitrage is significantly impacting service industries, including IT.
Indian Software and Services Market ($USD M)
2,9364,011
5,539
8,2989,958
12,455
0
4,000
8,000
12,000
16,000
1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03
Source: NASSCOM
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? Current RealityCurrent Reality
India is particularly attractive due to many reasons:– Enormous English speaking labor base– India can turnaround work while US
businesses are closed at night– Cost advantages relative to other
countries– Attractive career path for skilled
workers– Experience and exposure to US
business culture– Regulatory support
Average Annual Salary
US ($) India ($)
Software Programmer
66,100 10,000
Mechanical Engineer
55,600 5,900
IT Manager 55,000 8,500
Accountant 41,000 5,000
Financial Operations
37,625 5,500
Source: PayScale Inc.; the Paaras Group (Extracts From Time, 4 August 2003)
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? Current SituationCurrent Situation
An estimated 3.3 million jobs will move to offshore by 2015.
Source: Forrester Research. Nov 2002.
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? Looking ForwardLooking Forward
We will not return to the good old days.
– Economy may recover but labor arbitrage is here to stay.
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? OptionsOptions
Assuming I don’t decide to exit the IT field, how can I improve my chances of having a rewarding career?
1. Don’t Panic – there will always be a need for technology expertise in the US
2. Expand your capability beyond the common, repeatable technology skills
3. Combine technology with other subjects (i.e., business, chemistry, biology, education)
D E P A R T M E N T O FCOMPUTER SCIENCEAND SYSTEMS ANALYSIS
SCHOOL OF ENGINEERING & APPLIED SCIENCEO X F O R D O H I O MIAMIUNIVERSITY
Is IT Moving Offshore?Is IT Moving Offshore? OptionsOptions
Assuming I don’t decide to exit the IT field, how can I improve my chances of having a rewarding career?
4. Develop specialized skills (i.e., Security, R&D)
5. Learn how to sell! Most IT work continues to be sold in onshore locations (software, hardware, consulting, BPO, BTO, etc.)
6. Consider positions with the US Government