From the clients perspective, theyre telling us there are going to be strong budgets for next year, Taylor says. This prognosis is backed up by IDCs projections for 2007.
Yet theres a caveat. Todays CEOs understand IT much better than in years past. Theyre less likely to simply accept CIO or CTO requests for tech budget increases at face value. This means that CIOs and CTOs, are having to justify that budget in terms of return on investment, Taylor says. Gone are the days where they just let the techies get on with it.
But this need to justify increases is, paradoxically, increasing the level of confidence among IT departments, Taylor opines. They know that any budget boosts make it clear to IT departments that theyre being embraced."
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The U.S. has struggled with its conscience over the issue of outsourcing, yet Taylor feels it will continue to grow.
This, unfortunately, is particularly true of tech workers on the lower rungs. I think the lower end of the market still continues to be outsourced, not just overseas but to big outsourcing giants, he says.
Managers and those with specialized skills are less vulnerable. Companies are certainly retaining the areas [workers] that they see as the differentiators.
However strong the movement to outsource, those companies that use overseas workers may find a lack of real skills. Recent reports indicate that, due to shortcomings in the school systems in emerging markets, these poorer countries arent fielding as many fully skilled tech workers as some had hoped.
Consequently, experts question to what extent India and China will be able to satisfy the worldwide need for tech talent in the years ahead.
I was talking to a big investment bank that we deal with, and theyve actually pulled the plug to their outsourcing to China," Taylor says. They just dont see that the educational system there is going to be able to meet their demands.
Instead of send all their jobs offshore, some firms are now middle shoring. That is, theyre splitting their labor force between the U.S. and abroad, to avoid relying too heavily on outsourced labor. Furthermore, Taylor notes, some firms are touting to customers that all their work is done domestically, hoping to gain a marketing advantage by stressing their U.S. labor force.