Accept Offshore Outsourcing as Inevitable
The trend to offshore outsourcing of IT and business functions is inescapable according to a panel of key executives in the vendor community.
Mar 17, 2004
The trend to offshore outsourcing of IT and business functions is inescapable according to a panel of key executives in the vendor community. The panel, assembled at Gartner Symposium/ITxpo 2004 in Barcelona, Spain, defended the industry against the political and media backlash now raging against the practice.
Hubert Giraud, Group Vice President, Global Outsourcing at Cap Gemini Ernst and Young, argued that companies in the advanced economies were hurt more by the economic downturn than by any loss of jobs overseas. "It's an historical trend" he said, predicting that, with economic recovery "we will hear less of the evils of outsourcing."
Alexander Egorov, founder and CEO of Reksoft of St. Petersburg, agreed that outsourcing will happen anyway. "It's a fact of life," he said. People will have to be prepared to accept it. But he argued that outsourcing will create new and different jobs in companies that use it. Managing delivery of a contract, he said, was more challenging than coding software.
Francisco D'Souza, COO of Cognizant, agreed that outsourcing creates jobs in the long term. But he accepted that enterprises and governments need to tackle the short-term issues and perceptions. Governments, he said, should be aiming to create an environment that encourages innovation, entrepreneurship and risk-taking. They should encourage life-time education and training and work with the private sector when considering regulation.
The three executives were questioned at Symposium by Ian Marriott, vice president and research director, and Roger Cox, managing vice president with Gartner Consulting.
Egorov said that many of the negative expectations about Russia were no longer relevant and he said European companies should look behind them at a source of services that is close physically and culturally. Giraud said that any sourcing strategy should include offshore sourcing. And D'Souza warned that "if you choose not to do it, your competitors will probably do so and gain a competitive advantage."
Hubert Giraud, Group Vice President, Global Outsourcing at Cap Gemini Ernst and Young, argued that companies in the advanced economies were hurt more by the economic downturn than by any loss of jobs overseas. "It's an historical trend" he said, predicting that, with economic recovery "we will hear less of the evils of outsourcing."
Alexander Egorov, founder and CEO of Reksoft of St. Petersburg, agreed that outsourcing will happen anyway. "It's a fact of life," he said. People will have to be prepared to accept it. But he argued that outsourcing will create new and different jobs in companies that use it. Managing delivery of a contract, he said, was more challenging than coding software.
Francisco D'Souza, COO of Cognizant, agreed that outsourcing creates jobs in the long term. But he accepted that enterprises and governments need to tackle the short-term issues and perceptions. Governments, he said, should be aiming to create an environment that encourages innovation, entrepreneurship and risk-taking. They should encourage life-time education and training and work with the private sector when considering regulation.
The three executives were questioned at Symposium by Ian Marriott, vice president and research director, and Roger Cox, managing vice president with Gartner Consulting.
Egorov said that many of the negative expectations about Russia were no longer relevant and he said European companies should look behind them at a source of services that is close physically and culturally. Giraud said that any sourcing strategy should include offshore sourcing. And D'Souza warned that "if you choose not to do it, your competitors will probably do so and gain a competitive advantage."