Withstanding globalization's impact on IT

A recent survey of enterprise executives has found that -- not surprisingly -- IT executives are more averse to globalization than their peers from other departments. The survey, summarized in "The Benefits and Challenges of Globalization," was conducted by EquaTerra, a consulting firm that makes its living advising companies on how to refine their processes, a practice that often relies on some measure of outso

A recent survey of enterprise executives has found that -- not surprisingly -- IT executives are more averse to globalization than their peers from other departments.

The survey, summarized in "The Benefits and Challenges of Globalization," was conducted by EquaTerra, a consulting firm that makes its living advising companies on how to refine their processes, a practice that often relies on some measure of outsourcing. With that in mind, I called up Stanley Lepeak, EquaTerra's managing director of research.

Non-IT executives don't understand the impact globalization has on IT
Lepeak doesn't pull any punches -- a quality I admire. He told me right off that the negative feelings IT executives have toward globalization and its offspring, outsourcing, are in part attributable to "airline" magazine syndrome.

In other words, some non-IT executive sitting in first class reads a business publication that tells them how cheap IT labor is in India. The exec gets back to the office and asks, "Why are we paying developers in New Jersey $90 an hour when we could get the same work for $30 an hour in India?"

Strategies are put forth without a true understanding of how it will impact IT, says Lepeak.

"Invariable, there is a fixation on costs without consideration of how it impacts performance," says Lepeak. "And if labor is half the cost, it doesn't mean the company will save 50 percent."

Other C-level executives need to understand how outsourcing changes processes, such as managing operations 24/7, dealing with cultural and language barriers, managing staff discontent, both local and 10,000 miles away.

Where will IT find its leaders going forward?
Long term, IT execs wonder where next-generation leadership will be found among rank-and-file IT staff when rank-and-file work is no longer performed within the organization.

"Where do I get my next head of development when all my development work has been outsourced," Lepeak asks.

Current IT professionals may not like the answer. Lepeak says what is quickly discovered is that IT needs a different kind of manager than it has today -- and sometimes it is hard to teach an old dog new tricks.

"You may not want your next gen to come up through the ranks. The skill sets are different when managing a service-level-driven contractual relationship," Lepeak says.

The skills needed to manage outsourced projects may not have been learned when you were managing a team down the hall for the past 20 years. New skills include managing a third-party relationship with special skills for cultural differences.