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Outsourcing IT needs in the corporate world has become extremely popular because it is cost-efficient and it gives IT resources to companies that may not otherwise be able to afford them. Another positive side effect of IT outsourcing is that it has brought many technology jobs back to the United States.
As convenient and patriotic as IT outsourcing has become, it also have several limitations that have caused many companies to re-think the idea of funding their own internal IT group. It is important for a company to be completely familiar with these limitations before developing any kind of company policy in regards to IT.
The Customer Could Outgrow The Outsource Company
When an IT outsourcing company first takes on a new client, the relationship is beneficial to both sides. But things can start to get inconvenient for the client when the client's business starts to outgrow the capabilities of the IT outsource group.
An IT outsourcing company can become entrenched in the daily routine of its clients, which is great at first. But when the IT company can no longer keep pace with the growth of its clients, then the clients are stuck trying to find a new solution and keep track of its own IT assets at the same time.
The IT Outsourcing Company Lacks The Necessary Technical Expertise
IT outsourcing clients like to believe that their support company knows everything there is to know about computers and the Internet. But every IT support company has its areas of expertise and they have the technical areas where they are not quite as strong. If the client starts to experience needs from the areas where the IT outsourcing company is not so strong, then that can become a significant business issue.
This problem can be amplified if the client is a small business experiencing growth. An IT outsourcing company is not as likely to bring on new personnel for a smaller client, which leaves the client without a solution.
The Client Losses A Measure Of Control Over Its Data
No matter how large or successful an IT outsourcing company may be, there will always be the limitation of client security and the protection of critical customer data. All it takes is one rogue employee of the IT outsourcing company to compromise all of the client's critical data.
Some IT outsourcing companies have safeguards put in place to try and prevent client data compromise, but those safeguards are limited by how much access the IT company has to the client network. In most cases, that access has to be comprehensive for the IT outsourcing company to be able to do its job.
Outsourcing IT responsibilities can take a lot of stress off of a client and allow that client to operate his business by focusing on his core competencies. But there are limitations to IT outsourcing that could make it necessary for a client to do his own IT support and pay the extra costs.
Controversy was recently courted as Southern California Edison (SCE) prepares to cut their own staff while looking to meet their staffing needs with offshore employees skilled in the field of “IT” or Informational Technology. This has been the second major utility company in the United States to take this path towards providing services to its consumers while holding current rates at consistent levels. SCE does not disclose the exact numbers of expected lay-offs, but the LA Times reports that it is in the hundreds. Utility companies tell their consumers that these moves are necessary as a hedge against inflation and to keep their services at rates that their customers can easily afford. Critics claim that the use of foreign workers is the first step to using an entirely foreign workforce and promoting large scale unemployment amongst American citizens. Often this has been seen as a conflict between national and international workers for the same jobs, salaries and careers.
It has been noted that this State of California utility company, much like other corporations that hire foreign workers does so primarily when there is a shortage of national citizens that can perform these jobs well. IT workers that are brought in with H-1B Visa work permits usually are college educated and hold expertise in technical areas and studies that local employees may not be especially trained in. Once again, critics decry the fact that these employees are not hired directly. On shore contracting companies operating in the continental United States are directly hired by the utility companies. These contracted companies then serve as “middle-men” and hire a wide range of foreign workers with H-1B paperwork so that they can move to the United States. The workers then perform a variety of jobs instead of American workers who were either born in the country or have achieved American citizenship on their own.
Needless to say, the amount of visas issued in a given year is a concern for U.S workers in various fields but particularly in Information Technology. As large corporations stack the employment deck with foreign workers who put in the hours for a fraction of the pay-rate for local employees, local IT professionals are finding it more difficult to find work nationally. They encounter rejections, endless interview processes or low –ball offers from companies and recruiting agencies looking to fill positions at a bare minimum cost for coveted skill-sets.
Meanwhile, an H-1B worker is a worker brought in on a temporary basis with a visa allowing them to work freely in the United States. Much like a student or travel visa, it is issued for on a calendar oriented basis. Applicants who successfully renew the visa for an extended period of time can expect to work in the United States for up to ten years. Although U.S companies hiring these employees may pay them less than their local employees, the salaries earned by H-1B Visa workers are almost always higher than these workers would earn in their own country of origin.
Both sides can agree on several issues. When it comes to these H-1B Visa workers, their assignments are generally of a contractual nature and require them to reside in this country for a period of months to years. However it is also an accepted fact that while they are in this country, they are responsible for paying rent, utilities and all other living expenses. As residents of the United States on a permanent basis, they are also liable for taxes on any salary they have earned while living here.
Dr. Norman Matloff, a professor at the University of California, Davis and writer on political matters believes the shortage to be fiction. In his writing for the University of Michigan Journal of Law Reform, he claims that “there has been no shortage of qualified American citizens to fill American computer-related jobs, and that the data offered as evidence of American corporations needing H-1B visas to address labor shortages was erroneous. The American Immigration Lawyers Association (AILA) agrees with him and describes the situation as a crisis. Likewise, other studies from Duke, Alfred P. Sloan Foundation and Georgetown University have disputed that in some years, the number of foreign programmers and engineers imported outnumbered the number of jobs created by the industry
No industry is as global as software development. Pervasive networking means that software developers can, and do, work from anywhere. This has led many businesses to hiring development subcontractors in other countries, aiming to find good development talent at lower prices, or with fewer hassles on entry into the US.
While this is an ongoing and dynamic equilibrium, there are compelling reasons for doing software development in the United States, or using a hybrid model where some parts of the task are parceled out to foreign contractors and some are handled locally.
Development Methodologies
The primary reason for developing software overseas is cost reduction. The primary argument against overseas software development is slower development cycles. When software still used the "waterfall" industrial process for project management (where everything is budgeted in terms of time at the beginning of the project), offshoring was quite compelling. As more companies emulate Google and Facebook's process of "release early, update often, and refine from user feedback," an increasing premium has been put on software teams that are small enough to be agile (indeed, the development process is called Agile Development), and centralized enough, in terms of time zones, that collaborators can work together. This has made both Google and Facebook leaders in US-based software development, though they both still maintain teams of developers in other countries tasked with specific projects.
Localization For Americans
The United States is still one of the major markets for software development, and projects aimed at American customers needs to meet cultural norms. This applies to any country, not just the U.S. This puts a premium on software developers who aren't just fluent in English, but native speakers, and who understand American culture. While it's possible (and even likely) to make server-side software, and management utilities that can get by with terse, fractured English, anything that's enterprise-facing or consumer-facing requires more work on polish and presentation than is practical using outsourced developers. There is a reason why the leaders in software User Interface development are all US-based companies, and that's because consumer-focused design is still an overwhelming US advantage.
Ongoing Concerns
The primary concern for American software development is talent production. The US secondary education system produces a much smaller percentage of students with a solid math and engineering background, and while US universities lead the world in their computer science and engineering curricula, slightly under half of all of those graduates are from foreign countries, because American students don't take the course loads needed to succeed in them. Software development companies in the United States are deeply concerned about getting enough engineers and programmers out of the US university system. Some, such as Google, are trying to get programmers hooked on logical problem solving at a young age, with the Summer of Code programs. Others, like Microsoft, offer scholarships for computer science degrees.
Overall, the changes in project management methodologies mean that the US is the current leader in software development, and so long as the primary market for software remains English and American-centric, that's going to remain true. That trend is far from guaranteed, and in the world of software, things can change quickly.
Like me, I believe most people go about their business never to give a serious thought about their assumed private correspondence when using Gmail to email friends, colleagues and business associates. As it turns out, your daily banter may not be so private after all. A recent article in Fortune Magazine, “Judge Rejects Google Deal Over Email Scanning” caught my attention and an immediate thought dominated my curiosity…Google email and scanning scam.
In essence, the article describes Googles’ agreement to change the way it scans incoming messages so that it no longer reads emails while they are in transit, but only when they are in someone's inbox! So, what exactly does that mean? Judge Koh, a San Francisco federal judge, said she's not so sure about that. Her ruling claims the settlement does not provide an adequate technical explanation of Google's workaround, which involves scanning in-transit emails for security purposes, and then later parsing them for advertising data. The judge also proposed a legal settlement to pay $2.2 million to lawyers, but nothing to consumers.
My interest in this story is not so much about the proposed settlements or the specific details about how Google or any of the web giants settle claims based on vague legal language. It is however, more about the naiveté of myself and perhaps many others that never question how the email scanning process really works. I wonder, do most of us really care that Gmail uses contents of our mail to display targeted ads?
Tech Life in California
| Company Name | City | Industry | Secondary Industry |
|---|---|---|---|
| Mattel, Inc. | El Segundo | Retail | Sporting Goods, Hobby, Book, and Music Stores |
| Spectrum Group International, Inc. | Irvine | Retail | Retail Other |
| Chevron Corp | San Ramon | Energy and Utilities | Gasoline and Oil Refineries |
| Jacobs Engineering Group, Inc. | Pasadena | Real Estate and Construction | Construction and Remodeling |
| eBay Inc. | San Jose | Software and Internet | E-commerce and Internet Businesses |
| Broadcom Corporation | Irvine | Computers and Electronics | Semiconductor and Microchip Manufacturing |
| Franklin Templeton Investments | San Mateo | Financial Services | Investment Banking and Venture Capital |
| Pacific Life Insurance Company | Newport Beach | Financial Services | Insurance and Risk Management |
| Tutor Perini Corporation | Sylmar | Real Estate and Construction | Construction and Remodeling |
| SYNNEX Corporation | Fremont | Software and Internet | Data Analytics, Management and Storage |
| Core-Mark International Inc | South San Francisco | Manufacturing | Food and Dairy Product Manufacturing and Packaging |
| Occidental Petroleum Corporation | Los Angeles | Manufacturing | Chemicals and Petrochemicals |
| Yahoo!, Inc. | Sunnyvale | Software and Internet | Software and Internet Other |
| Edison International | Rosemead | Energy and Utilities | Gas and Electric Utilities |
| Ingram Micro, Inc. | Santa Ana | Computers and Electronics | Consumer Electronics, Parts and Repair |
| Safeway, Inc. | Pleasanton | Retail | Grocery and Specialty Food Stores |
| Gilead Sciences, Inc. | San Mateo | Healthcare, Pharmaceuticals and Biotech | Pharmaceuticals |
| AECOM Technology Corporation | Los Angeles | Real Estate and Construction | Architecture,Engineering and Design |
| Reliance Steel and Aluminum | Los Angeles | Manufacturing | Metals Manufacturing |
| Live Nation, Inc. | Beverly Hills | Media and Entertainment | Performing Arts |
| Advanced Micro Devices, Inc. | Sunnyvale | Computers and Electronics | Semiconductor and Microchip Manufacturing |
| Pacific Gas and Electric Corp | San Francisco | Energy and Utilities | Gas and Electric Utilities |
| Electronic Arts Inc. | Redwood City | Software and Internet | Games and Gaming |
| Oracle Corporation | Redwood City | Software and Internet | Software and Internet Other |
| Symantec Corporation | Mountain View | Software and Internet | Data Analytics, Management and Storage |
| Dole Food Company, Inc. | Thousand Oaks | Manufacturing | Food and Dairy Product Manufacturing and Packaging |
| CBRE Group, Inc. | Los Angeles | Real Estate and Construction | Real Estate Investment and Development |
| First American Financial Corporation | Santa Ana | Financial Services | Financial Services Other |
| The Gap, Inc. | San Francisco | Retail | Clothing and Shoes Stores |
| Ross Stores, Inc. | Pleasanton | Retail | Clothing and Shoes Stores |
| Qualcomm Incorporated | San Diego | Telecommunications | Wireless and Mobile |
| Charles Schwab Corporation | San Francisco | Financial Services | Securities Agents and Brokers |
| Sempra Energy | San Diego | Energy and Utilities | Gas and Electric Utilities |
| Western Digital Corporation | Irvine | Computers and Electronics | Consumer Electronics, Parts and Repair |
| Health Net, Inc. | Woodland Hills | Healthcare, Pharmaceuticals and Biotech | Healthcare, Pharmaceuticals, and Biotech Other |
| Allergan, Inc. | Irvine | Healthcare, Pharmaceuticals and Biotech | Biotechnology |
| The Walt Disney Company | Burbank | Media and Entertainment | Motion Picture and Recording Producers |
| Hewlett-Packard Company | Palo Alto | Computers and Electronics | Consumer Electronics, Parts and Repair |
| URS Corporation | San Francisco | Real Estate and Construction | Architecture,Engineering and Design |
| Cisco Systems, Inc. | San Jose | Computers and Electronics | Networking Equipment and Systems |
| Wells Fargo and Company | San Francisco | Financial Services | Banks |
| Intel Corporation | Santa Clara | Computers and Electronics | Semiconductor and Microchip Manufacturing |
| Applied Materials, Inc. | Santa Clara | Computers and Electronics | Semiconductor and Microchip Manufacturing |
| Sanmina Corporation | San Jose | Computers and Electronics | Semiconductor and Microchip Manufacturing |
| Agilent Technologies, Inc. | Santa Clara | Telecommunications | Telecommunications Equipment and Accessories |
| Avery Dennison Corporation | Pasadena | Manufacturing | Paper and Paper Products |
| The Clorox Company | Oakland | Manufacturing | Chemicals and Petrochemicals |
| Apple Inc. | Cupertino | Computers and Electronics | Consumer Electronics, Parts and Repair |
| Amgen Inc | Thousand Oaks | Healthcare, Pharmaceuticals and Biotech | Biotechnology |
| McKesson Corporation | San Francisco | Healthcare, Pharmaceuticals and Biotech | Pharmaceuticals |
| DIRECTV | El Segundo | Telecommunications | Cable Television Providers |
| Visa, Inc. | San Mateo | Financial Services | Credit Cards and Related Services |
| Google, Inc. | Mountain View | Software and Internet | E-commerce and Internet Businesses |
training details locations, tags and why hsg
The Hartmann Software Group understands these issues and addresses them and others during any training engagement. Although no IT educational institution can guarantee career or application development success, HSG can get you closer to your goals at a far faster rate than self paced learning and, arguably, than the competition. Here are the reasons why we are so successful at teaching:
- Learn from the experts.
- We have provided software development and other IT related training to many major corporations in California since 2002.
- Our educators have years of consulting and training experience; moreover, we require each trainer to have cross-discipline expertise i.e. be Java and .NET experts so that you get a broad understanding of how industry wide experts work and think.
- Discover tips and tricks about Oracle, MySQL, Cassandra, Hadoop Database programming
- Get your questions answered by easy to follow, organized Oracle, MySQL, Cassandra, Hadoop Database experts
- Get up to speed with vital Oracle, MySQL, Cassandra, Hadoop Database programming tools
- Save on travel expenses by learning right from your desk or home office. Enroll in an online instructor led class. Nearly all of our classes are offered in this way.
- Prepare to hit the ground running for a new job or a new position
- See the big picture and have the instructor fill in the gaps
- We teach with sophisticated learning tools and provide excellent supporting course material
- Books and course material are provided in advance
- Get a book of your choice from the HSG Store as a gift from us when you register for a class
- Gain a lot of practical skills in a short amount of time
- We teach what we know…software
- We care…
Interesting Reads Take a class with us and receive a book of your choosing for 50% off MSRP.
