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(May 20, 2004) - In its latest study, Forrester Research predicts that by the end of next year, U.S. firms will offshore more than 800,000 service jobs, 40 percent more than the firm estimated previously. Forrester's overall estimate remains the same: The firm predicts that about 3.3 million jobs will go overseas by 2015.

The San Diego Union Tribune interprets the material to mean offshoring is accelerating while the San Francisco Gate focuses on the fact that the estimate for 2006 was raised by 40%. Here is the detailed forecast:
  2003 2004 2005 2006 2007 2008 2010 2015
Management 3.5K 15K 34K 42K 48K 67K 106K 259K
Business 30K 55K 91K 105K 120K 136K 176K 356K
Computer 102K 143K 181K 203K 228K 247K 322K 542K
Architecture 14K 27K 46K 54K 61K 70K 93K 191K
Life sciences 3K 2K 4K 5.5K 6.5K 9K 16K 39K
Legal 6K 12K 20K 23K 26K 29K 39K 79K
Art design 2.5K 4.5K 8K 9K 10K 11K 15K 30K
Sales 11K 22K 38K 47K 55K 67K 97K 218K
Office 146K 256K 410K 475K 541K 616K 815K 1.600M
TOTAL 315.3K 536.5K 832K 963.5K 1.095M 1.252M 1.679M 3.314M

The coverage of the Forrester report is highly biased by political content. Offshoring and its second cousin outsourcing are notably tough subjects in the election focused swing states (or spots like Silicon Valley where unemployment is still high).

Put in a different perspective, the Forrester prediction is that by 2015 offshoring will be nearly as big a component of the economy as the temporary-help segment was five or six years ago. Roughly 2%. Not a big deal.

From here, the offshoring/outsourcing debate has more to do with timing and skills than it has to do with job loss and creation.

The most important element of any initiative to move work "out of the house" is the contractual and managerial skill set necessary to execute the process. "Outhousing" (sorry) requires that you understand the process far more clearly than when it was done in-house. Rates, output, input, quality definitions, need levels of specification and management that are usually not required when the work is done under the local umbrella.

The discipline is called Project Management. The number of schools offering project management degrees is still quite small. The very definition of Project Management is fairly fluid. The number of HR professionals with Project Management experience is minute.

We are firm believers in the importance of accelerating the movement of work from internal to external processes. Heightened process autonomy, flatter organizations, more rapid economic adjustment and the readiness to move to the next level are all obvious benefits of process outsourcing. The limiter, as we see it, is the availability of project management skills.

John Sumser

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