The December 2006 issue of CBR titled "Mass Exodus: Can the Next Generation Maintain the Mainframe? "¹ focused on the topic of staffing in IT departments and the waning mainframe skills in today's organizations and IT shops. Introducing the issue, I remarked:

This month's CBR is particularly important because what we have on our hands may be shaping up as a big crisis that, to be successfully addressed, requires joint efforts from different communities that seldom interact. I am not going to use cheesy terms such as "a perfect storm," but what we can see is, on the one hand, dropping enrollments in computer science degrees and increasingly limited number of mainframe skills being developed in universities; while on the other hand, mainframes continue to run many of the large mission-critical software applications of modern organizations. On the "third hand" (or the underhand as the famous blues song goes) is the lack of awareness and planning for the impending mass retirement of the baby boomers who hold the great majority of mainframe skills and knowledge today.

That issue offered the optimal blend of fresh data about an emerging concern and the knowledgeable yet approachable commentary of two experts on the topic: Kate Kaiser and Phil Zwieg. The survey we reported on in that installment clearly showed that outsourcing, and more specifically offshoring, was seen as a potential solution by over a third of the respondents who considered outsourcing. In her commentary, Kate wrote:

As when there has been a shortage of other needed skill sets, outsourcing is an answer.... Depending on security concerns, offshore outsourcing is an option. The major Indian vendors all offer mainframe services.... Only 26% of survey participants indicate that they would not use outsourcing; of those who would use outsourcing, 36% specified offshore outsourcing, and 15% are willing to partner with either domestic or offshore firms on a train-to-hire-basis.

Well, with so many of our respondents and readers thinking about offshoring as a viable safety valve for such a wide array of needs, an issue of CBR on this topic was clearly in order. Our academic contributor this month is Stephen Hawk, Professor of Information Systems at the University of Wisconsin-Parkside (USA). Steve's expertise, both on the academic and applied front, is on the future demand for IT skills and the impact of offshore outsourcing. Providing our view from the field once again is Phil Zwieg, currently a principal with Z-Sharp, LLC, and recently retired VP of the IS department at Northwestern Mutual, where he was responsible for all infrastructure and IT operations activities. Phil has a wealth of firsthand experience, having been deep in the trenches his whole career, as well as an ability to research and communicate knowledge stemming from his doctoral studies and his activity as a consultant and university professor.

Steve begins his article by framing the topic of offshoring. He starts with what may seem an obvious point, but one that is very important in its subtlety. The offshoring decision, for or against, will need to be justified -- are you ready to do so? In fact, come to think of it, this issue may be more valuable to the nonadopters who will have to justify why they are not joining the offshoring bandwagon than for the adopters. As he frames the decision, Steve points out that offshoring does not necessarily imply working with external providers but, rather, could be "captive." He then offers a two-stage analysis of the data. First, he uses the entire sample to comment on the reasons organizations offshore and how satisfied the respondents have been so far with the results. He then explores differences in the amount and types of offshoring, in the associated motivations and challenges, in the number and locations of providers, and in the quality of services received. Based on theory that predicts an evolution of the offshoring relationship based on experience, he splits the sample into "old pros" and "novices" and comments on the different experiences of each. I think you'll find this data, and his analysis, quite intriguing. Steve closes his contribution with some very useful recommendations.

Phil returns with his colloquial writing style and insight, of which I am a big fan. He dives directly into the data. After framing the survey and commenting on the makeup of the respondents' base, he then systematically analyzes the results, touching upon the reasons for offshoring, the type of work that is typically offshored, where the work is offshored to (some surprises here), and what portion/amount of IT work is generally offshored. Phil then fearlessly tackles the dark side of offshoring: What are the problems firms most often encounter? What have we learned about managing and mitigating them? With the major issues on the table, Phil delves into the issue of turnover in offshore providers (some revelations here), commenting on the implications and challenges associated with skills availability (or lack thereof) in offshore partners. As with any good CBR contribution, Phil concludes with tangible guidelines -- you don't want to miss those!

I hope you will find this issue useful in benchmarking and understanding your offshoring options. Where you stand come decision time will be largely a function of the characteristics and needs of your organization, but I am sure you will be more confident in your ability to make sound decisions after reading our contributors' commentaries.

-- Gabriele Piccoli, Editor,Cutter Benchmark Review

NOTES

¹ See "Mass Exodus: Can the Next Generation Maintain the Mainframe? " (Vol. 6, No. 12).