Enterprising Developments

As IT Jobs Go Overseas, Role of IT Evolves

Joe McKendrick
Insurance Experts' Forum, November 19, 2010

The Hackett Group just published a bleak report on future prospects for IT jobs, observing that even as the economy expands, hundreds of thousands of jobs will go to outsourcers. They predict an additional 600,000 American and European jobs in IT will disappear in the five years from 2010 through 2014, on top of the 500,000 lost in the 2008-09 period. And, interestingly, Hackett says that it wont be just IT jobs going overseas—financial-related jobs also will be increasingly outsourced—by 2014, the annual number of finance jobs offshored will for the first time exceed the number of IT jobs offshored.

Here at INN's Insurance Experts Forum, Celent analyst Ben Moreland makes the case for outsourcing as a more effective way to ramp up IT capabilities, perhaps more efficiently that building an internal department.

A couple of thoughts on these trends: Yes, with global networks and high bandwidth in place, it no longer matters where IT systems and software and their operators and developers are based, whether they are down the hall or on the other side of the globe. But there's no reason why an outsourcer in North America can't be more competitive than one in India. And there are plenty that are—and they need skilled IT professionals. In fact, there is evidence that good IT management skills are suddenly getting scarcer—witness Google's recent 10% pay bump to hang on to its technology talent.

But to a large degree, even the outsourcers have something to be concerned about going forward—IT automation. Systems are getting extremely complex, but at the same time, there are many tools and platforms now emerging that make it even simpler to manage a large data center. Cloud computing also throws a new dimension into the mix, in that IT capabilities can now be pieced together on an incremental basis, service by service, versus paying an outsourcer a huge sum to manage some large piece of the operation.

What I'm driving at with this is every business, every carrier, is going to need people that understand what works for their business. What needs to be outsourced? What is better kept in house? What is the best cloud provider for this claims management capability being sought? What kind of integration work is required with the on-premises database to bring in the cloud solution? The grunt-work IT jobs—coding, patching, monitoring—may be go overseas or become automated. But companies will even more desperately need IT managers and professionals who understand how technology can serve the business, and be able to provide guidance. And these skills will be in short supply.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (1)

I found this article by Mr. McKendrick both engaging and thought provoking. I am interested in having either the author or others comment on:

What specific roles will not only be offshored, but which ones will still remain part of the traditional IT shop?


Regards, and appreciation

Posted by: issue_solver | December 6, 2010 11:12 AM

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