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|Dean Lane, IT Director, Symantec Corp.|
Let me answer this in the context of Symantec. Symantec produces Norton AntiVirus. This product has virus definitions and an engine that works with these definitions. These things work in conjunction with each other to prevent viruses. Symantec won't, and shouldn't, outsource the definitions and the engine because they are the crown jewel of the product's IP. If everything else was outsourced, and Symantec still wanted to outsource something more, they might send the GUI interface offshore, but never the product itself. Those are the kind of things that are defined as being high IP.
A little lower down on the IP scale -- but items that you still would not outsource -- are the strategic planning and the development of your architecture. In some cases, you don't want to outsource your system design. You should be looking to outsource the things that are less important from an IP perspective for two reasons: Most importantly, you don't want your code appearing on someone else's Web site. The other factor is risk. When Symantec outsourced, did you manage it in-house or did you get a third party involved? How did you manage your offshore presence?
This is my trade secret. I used to work for Gartner, who offers a service called independent validation and verification. I'll just say that we have a company that's offshore that we're doing work with and we've contracted with another set of individuals [to watch over our stuff]. They're independent consultants and they serve as our representative in India. We do something else, too. I have six direct reports here, so I set them up on a schedule to go to India twice a year. So, over and above the independent consultants that I have, I send people from our domestic office to India to monitor our progress every month.
The answer is yes. We have [outsourced] over a period of time, so the total number of employees who have been impacted out of 113, is less than 10. Those people have not yet been impacted, and we're looking to place them elsewhere within the company … within IT. We're growing and so it may be a little bit unfair to say that that can be done all the time, but certainly if it turns out we can't find a place for these people, there will be transitory programs to help them move from Symantec to other companies. Have you saved money?
Yes. So far, only about a million dollars -- but we've only been doing this for nine months. Everything is in the blueprint. I know more money will be saved because I negotiated the contract. We have a fixed rate and it's locked in for the next two years. In the third year, our offshore partner can only raise their rate by 5%. In the fourth year, other options exist. How have you reinvested the money you've saved?
For the most part, saved money has gone to other higher IP jobs. The money is always reinvested. The answer is actually two-fold. If we had 10 people whose positions have been eliminated -- either by moving them to another part of the company, or they've actually been abolished -- we can literally hire 30 or more people in India. In some cases, we've elected not to take the full savings, meaning, not to hire 30 people in India. Maybe we hire 15 and get a boost in our capability, because we have more people overall. The remainder of the money saved would be reinvested and/or saved. It's not a black and white answer. The nice thing about that is you can offer it up to senior management as discretionary dollars and at the same time say, 'If I get a vote, I'd like to have five more people so I can deliver even more capability.' If you are creating more positions, is it more for the higher level ones?
Yes, designers, architects, etc. -- representing higher IP activities. Do you think there's blame to lay for the outsourcing of American jobs?
I did outsourcing in the '80s, so I understand it backward and forward. Modern outsourcing is no different; it's just in a different area. Back in the '80s, it was manufacturing and now it's IT. You have to consider the results of offshoring in the '80s. Yes, some people were displaced and lost their jobs or positions, but in the long run, it created more jobs here. As the Japanese economy grew and people overseas became more affluent, they began to buy more American products. The demand increased and, as the same thing happens in India and other places, you will see the demand for American products go up again. There is short-term pain -- there's no doubt about that. But long term, outsourcing will make our economy grow.
Let's talk about 'blame.' I don't know if it is 'blame' per se, but I would say that there has been deterioration in this country for a long time. The management teams I worked with in the '80s were much more shrewd business people. They weren't 90-day wonders. They were the people with gray hair and experience. Today, offshoring is more political as opposed to 'how do we get the job done?' Some of that represents a problem -- it doesn't matter whether you're doing a good job or a bad job, it just matters whether or not you're liked, and whether or not you're the 'right type.' So that's one facet.
Another thing is education. Our educational system has become a social engineering experiment as opposed to 'let's teach these kids to read, write and do arithmetic.' We need to focus on what the children need to learn; otherwise, they won't ever be able to keep up.
Another 'blame' factor is the way society [has changed]. Today it's unusual to find a parent who stays home to provide direction for their children. Offshore, parents encourage their children to do well, and parents oversee the children's activities to ensure they're excelling at whatever subject is being studied. There's plenty of 'blame' to go around, and I don't think it's just one of these factors -- rather, they are all equal contributors.