Off-Shore Outsourcing

There are Newsmakers you can put a face to, and those you can only name.

Alongside the men and women that make up this year’s list in CDN is an issue that was represented by thousands of faces, most of whom IT customers will never see: The employees of offshore outsourcing firms.

In the

U.S. the threat of job losses to software companies overseas made offshore outsourcing an election issue. IBM, for example, said in January it hopes to save US$168 million within two years by moving more than 3,000 programming jobs to India.

By June, a U.S. Senator had introduced legislation seeking to ban offshore outsourcing of government work, including privatizing federal work, the federal purchase of goods and services and state government procurements with federal funds.

In Canada the impact is still hard to call. According to a study from PricewaterhouseCoopers earlier this year, Canada could lose as many as 75,000 jobs to offshore outsourcing by 2010.

On the other hand, PwC said, Canada could also gain up to 165,000 jobs by attracting contracts from the U.S., becoming a “”nearshore”” destination. That could be a boon to service providers and application developers.

This was echoed by CGI chief executive Serge Godin, who told the Canadian Club of Canada in April that outsourcing fears were creating a panic not seen since the months before Y2K.

Industry organizations such as CIPS hosted several roundtables and keynote speakers on the subject, while ITAC recently established a “”wise persons”” committee to examine offshore outsourcing in more detail.

Resellers may not be in danger of losing their jobs, but offshore outsourcing will certainly affect their business relationships. More than ever before, 2004 reinforced the belief that the channel’s success may depend on its home court advantage.

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Jim Love, Chief Content Officer, IT World Canada

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