Offshore Outsourcing: Current Conditions & Diagnosis

1. Offshore Outsourcing:Current Conditions & Diagnosis Panel Discussion SIGCSE 2004 Norfolk, VA

2. Panelists • Ernie FergusonNorthwest Missouri State University • Mary Ann RobbertBentley College • Dan McCrackenCity College of New York • Clif KussmaulMuhlenberg College

3. Introduction • OUTSOURCING • use of external companies to provide services • 70% of companies outsource some function or application • OFFSHORING • use of staff in other countries, especially India, China, former Soviet Union, etc • 277,000 computer jobs in US will move offshore by 2010

4. US IT Jobs Sent Offshore(Wired Magazine, Feb 2004)

5. Common Motivations • Overcome resource limitations • Access expertise • Reduce costs • most IT organizations save 15-25% during the first year, up to 40% later on • Increase speed & agility • “round-the-clock” development

6. Common Problems & Concerns • Communication • Cultural differences • Micromanagement • Change control • Intellectual property • Security

7. Ernie Ferguson Northwest Missouri State University

8. Background • In 2002 Forrester Research predicted by 2015 • at least 3.3 million white-collar jobs would be exported • $136 billion wages are expected to shift overseas • 1 million IT related jobs will move offshore • Gartner Inc calls the movement of tech-related jobs • an “irreversible megatrend” • 80% of all U.S. companies have considered shifting IT jobs overseas, • 40% of all U.S. organizations have completed offshore pilot projects or have outsourced IT services from non-U.S.-based service provider

9. Offshore != New Idea In 1993 Ed Yourdon published Decline and Fall of the American Programmer The 33 page Appendix A was entitled “Software Testing in India” The introduction of the World Wide Web and more productive programming environments caused Yourdon to publish Rise and Resurrection of the American Programmer in 1996.

10. Yourdon’s Basic Tenets • Software professionals in other parts of the world • Are far less expensive • Are substantially more productive • Develop software of higher quality • Described American programmers as “cowboys” in their approach to Application Development

11. My Beliefs • Distributive Software Development is not new. • Linux project • Apache project • Much of the software development that is done offshore was a candidate for automation if continued onshore. • Freeing up resources changes feasibility of projects • Switch from manual dirt digging to bulldozers made landscaping of golf courses feasible • Innovative uses of software not previously feasible are on the horizon

12. Interviews of Small Sample of Representatives From Area IT Companies Indicates • Many ARE either outsourcing or doing offshore development • Entry-level hiring emphasizes strong potential to move into project management positions • Strong technical expertise • Evidence of leadership ability • Good oral and written communication skills • Teamwork skills • Business understanding • Internship experience

13. My ViewImpact on CS/IS Departments Integrate project management throughout program Develop business savvy Expand treatment of risk assessment and system/network security Include quality processes such as Six Sigma and CMM Emphasize communication skills both oral and written Encourage majors to take a foreign language and multicultural courses Encourage majors to take leadership roles in clubs and organizations Conduct research on distributive software development whether in India or Indiana Work to abolish “Cowboy” methodology Educate media about aspects of Computer Science other than programming

14. Mary Ann Robbert Bentley College

15. Jobs Initially Outsourced • Call Centers • Labor intensive • Separate unit • Minimal Skills • Programming Modules • Well defined separate units • Specs determined in US and sent off shore

16. Moving Up the Value Chain • Whole units move over • Manufacturing branches • Functional units • R & D

17. Jobs Remaining in US • Business Analyst • Integration • Strategic decision making “IT worker of the future will be technically savvy, but will not necessarily have majored in CS or CE. More likely individual will be a business major of some Variety. Gartner Group

18. What are recruiters looking for? • Solid business skills • Company trains in technology • Fidelity Ireland’s 5th year program • Certification • People Skills • Communication • Customer Focus • Ability to manage project • Using contractors on and off shore • International experience • Study tour • Internships

19. What are we teaching? • Focusing on • Programming • Software Engineering • Systems Analysis and Design • CS, IS, CIS • Model Curriculums

20. Dan McCracken City College of New York

21. Enrollment in Data Structures City College of New York

22. Enrollment in Data Structures City College of New York

23. Percentage of entering freshmen planning to major in CS, for schools of Low, Medium, and High selectivity, as measured by SAT scoresSource: Higher Education Research Institute`

24. Clif Kussmaul Muhlenberg College

25. My Experiences & Observations • 3 years working with development teams in southern India • offshore companies have invested in CMM & ISO, but recognize their limitations • no significant skill differences between average developers onshore & offshore

26. Disruptive Innovation? • Christensen’s The Innovator’s Dilemma • Starting with low margin, low value work • Models & processes improve • Expand into higher value areas • Existing players are undercut from below • examples include steel, cars, disk drives • offshoring seems to fit the pattern

27. Global Impact • mixed for more developed countries • good for less developed countries • requires infrastructure – IT & education • trickle-down effect on other industries • construction, services • others are eager to join the game • Ashesi University in Ghana

28. My Beliefs • Offshoring will continue to increase • infrastructure technology will improve • supporting processes will mature • quality of service will improve • range of services will expand • non-IT areas will feel it too

29. My Beliefs • Offshoring has limits • Small, unpredictable, & high-risk projects are best done close to customer • Excellent developers & organizations anywhere in the world can be competitive

30. Curricular Responses • Working with diverse & distributed teams • oral & written communication • Continuous improvement & risk analysis • formal (CMM/ISO) or informal • Client- or value- intensive activities & skills • requirements, business case, prototyping, high-level design

31. Other Responses • Emphasize value of logical thinking & problem solving in many careers • management, law, ... • entrepreneurship • Educate students & colleagues regarding current & future conditions • Be ready to help other disciplines adapt

32. Capstone Project Course • for juniors/seniors in liberal arts CS major • students develop product concepts • student teams • define processes, roles, responsibilities • develop a product proposal / business plan • prototype products (or try to...)

33. Areas of Emphasis • Distributed teams • Effective communication • email, forums, instant messaging, phone, web & video conferencing, ... • Written documentation • proposals, white papers, • Peer reviews • Continuous optimization & risk analysis

34. Recurring Themes • Value of spiral processes • “perfect is the enemy of good enough” • Tradeoffs between discipline & agility • project should determine process • process should evolve with project • Importance of reflection & prioritization

35. Discussion