The appearance of the Internet, and in particular the commercial prospects of the World Wide Web, was arguably the most significant technological development of the 1990’s. Its potential had far-reaching economic, political and business implications by virtue of its ability to allow people all over the world to communicate and transmit information instantaneously. In large measure, IT enabled many of the business developments that would eventually become known as “globalization”. Characterized by the worldwide integration of financial markets, the widespread availability of computer and telecommunications technologies and the commercial potential of the World Wide Web, globalization was fiercely competitive in nature.

Business had plenty of experience using information technology and companies were eager to exploit the strategic value of their knowledge and intellectual assets in the global marketplace. Technically, IT had evolved into a client/server network-based architecture. IT skills had become highly sophisticated and well paid and IT outsourcing opportunities continued to grow along with the technology that enabled them. Outsourcing offerings now included all of the basic services plus new ones like web hosting, help desks, call centers and desktop support. Value was delivered in the form of business process improvements and sophisticated technologies like the ENS and CRM technologies that enabled customers to build relationships and capabilities that would help them become more agile and competitive in the new information age.

Change continued within the structure of the IT industry at the dawn of the 21st-century. Margins were shrinking on services as certain skills were becoming commoditized – particularly, mature technologies such as mainframe legacy programmers. The heyday for the old legacy programmers was Y2K when there was enormous demand for their services which largely ended, as hoped, on Jan. 1, 2000. Meanwhile, the Internet, cheap and ubiquitous, was the perfect vehicle for enabling much of the new business process outsourcing work - help desks, call centers and desktop support - to move off-shore in search of cheaper and cheaper labor. 

The question of exactly how many U.S. IT jobs fall victim to off-shore outsourcing has become a polarizing election-year staple. For the enormous debate it has generated, quantifying trends in outsourcing – from the loss of high-paying jobs to the benefit to consumers in the form of lower prices - has proved to be much more difficult. In a recent example, Forrester Research Inc. published research in 2002 suggesting that “3.3 million jobs representing $136 billion in wages” would be shipped overseas by 2015”. Four years later, in the absence of more compelling data, the press, pundits and politicians alike still quote these numbers with frequency to the continued surprise of its author who refers to them as an “educated guess”. International Data Corp. another industry research firm published its own survey results suggesting that “23% of all spending on U.S. white-collar technology work will be offshore by 2007”. This information, as well, became widely quoted before a spokesman with the company called the results an “overestimate” and the methodology “a little wobbly”. If the loss of U.S. IT jobs remains difficult to quantify, however, one thing remains certain. Off-shore IT outsourcing will continue to accelerate and India – with its highly skilled workforce and low cost operating environment - will continue to be the dominant player, particularly in the area of business process outsourcing.

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