I saw this tongue-in-cheek quote on a venture capitalist’s blog some time ago:
“About a year ago I hired a developer in India to do my job. I pay him $12,000 to do the job I get paid $67,000 for. He’s happy to have the work. I’m happy that I only have to work 90 minutes a day, talking code. My employer thinks I’m telecommuting. Now I’m considering getting a second job and doing the same thing.”
The technology sector has been rocked with many jobs being moved overseas just like other industries such as textiles decades ago, basic goods manufacturing, etc., but the humorous statement also points out some key opportunities in the IT sector.
The key for IT workers is to constantly migrate to the higher-valued roles and away from the lower-valued roles.
In my opinion — as a software company CEO and board member for 15+ years — is that software coding is indeed a low-skilled job compared to other much more valuable roles that would be very difficult to “offshore.”
The value of roles in software development go something like this from the most important to least important:
- Business Process Redesign – the ability to take a business process, map it, measure it, analyze it, and develop a new, break-through process that completely changes the rules with fewer steps, faster throughput, etc. This is a very valuable role that would be extremely difficult to offshore because of the highly personal nature of the interaction that needs to happen in order to tease out the existing business process and the potential for a new, better process. Many offshore IT projects have failed miserably due to a lack of proper business process redesign that requires a great deal of subject matter expertise.
- Software Architectural Design – the ability to create an elegant, coherent, and comprehensive architectural framework for software that allows the application to function with a high degree of performance, while being highly scalable in terms of the ability to add both functionality and the number of users as seamlessly as possible. Much like a skilled architect of a complex construction project, good software architects are highly skilled, in high demand, and have deep subject matter expertise in specific industry verticals. This is very difficult to find in an offshore environment.
- Project Management – the ability to keep a team on task, on time, and on budget, while skillfully managing scope creep and the customer’s expectations is a skill that is in very short supply. Many offshore projects have transitioned to the concept of using two project managers: a U.S.-based manager and an offshore manager that are in continuous communication. A really good project manager can not only manage multiple projects at the same time, but can keep those multiple teams on track, all the while communicating clearly to customers. Similar to a construction manager, IT project managers insure the project is being built according to the architect’s specifications.
- Software Code Development and Software Testing – both of these skills continue to be “de-skilled” through better and better software toolkits that are more and more automated and of course can be easily offshored as long as the first three jobs are done well. To go back to the construction metaphor, think of these as the sub-contractors: the carpenters and plumbers that are doing the grunt work according to the architect’s specifications and the project manager’s constant guidance.
If you are an IT worker looking to create a business in the IT sector, look no further than the first three jobs listed above and align yourself with excellent offshore resources that you can employ better than they can on their own. Your best bet is to go very, very deep in a certain area of expertise. In other words, stay in specific industries so you can apply that industry expertise as you solve your clients’ issues. It’s also best to focus on specific types of IT solutions: right now analytics, mobile, social, and gamification are hot areas of demand. And, be sure to stay current with the latest tools. Given all of that, you should always be in high demand.
- Business Development Documents (includes various document and agreement templates for business planning and growth)
- Startup Financial Model (to help you plan and operate the financial aspect of your business or acquisition)
Ask an Expert:
- Venture Academy (includes nearly 200 videos of entrepreneurship training)