Offshore IT Services – Still in the mix in a disruptive world

Over the last 20 or so years lots of software development and IT/Business Process services for North American and European markets moved offshore, typically – but not exclusively – to countries like India, the Philippines, Malaysia and Singapore. Today many IT services companies employ more people in offshore locations than they do in their home territories. The IT industry functions globally and changes fast, and in a quiet moment recently the Badger pondered on whether the current heightened nationalistic trends in many Western countries might ultimately lead to politically driven policies to repatriate IT skills and services to home turf. You don’t need to look far in the media to appreciate that many countries know they have IT skill shortfalls, that security and privacy requires crucial local IT expertise, and that Artificial Intelligence (AI) is apparently going to impact employment everywhere. So, do the runes suggest offshoring is in for a fast and dramatic fall? Well, that was the question at the heart of the Badger’s ruminations.

About 20 years ago, the Badger was involved in the acquisition of a small (<100 people) Indian software product development company and then its subsequent growth into an excellent global IT services delivery centre of more than 5000 professionals. (A second centre was eventually opened in the Philippines). Getting Western teams to work effectively with the offshore centres wasn’t easy. Many human and technical problems relating to cultural differences, time-zones, communication, language, and IT infrastructure for seamless global collaboration, were painful but eventually overcome. The Badger’s admiration and respect for offshore colleagues grew in leaps and bounds as these challenges were addressed. Their enthusiasm, ambition, hunger for success, thirst for knowledge, top-notch technical skills and desire to please was impressive and refreshing. Today, of course, onshore/offshore teamwork is routine, largely straightforward and successful embedded as routine across the industry. If it wasn’t then customers wouldn’t keep coming back for more.

So, is a reliance in home territories on IT skills, capabilities and services from offshore countries a problem? Is offshoring in for a dramatic fall? No. Not if international relationships between home and offshore countries remain mature and stable, and technological impacts from the likes of AI are well managed. But there’s the rub. Trade wars with the USA, BREXIT, EU internal strains, China’s relentless progress, Russia, North Korea, Saudi Arabia modernisation, Iran and the Middle East, all seem to suggest global business dynamics and international relationships are changing with nationalistic agendas being reinforced. But let’s travel hopefully. Offshore will continue to play an important part in the IT services industry. The Badger remains optimistic, but Badger instincts are producing some nervous twitches! The aroma of disruption seems to increase everyday…but maybe that’s just the Badger having dodgy thoughts on an unusually hot and sticky day!

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