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Is it better to work for an outsourcing provider than for corporate IT?

Consultant Tom Young has been mulling over the good, the bad and all the ugliness of outsourcing contracts for 13 years, eight of them with the IT advisory firm TPI, where he is managing director of the CIO services and infrastructure group. Before that, he was a financial director at AT&T Labs.

“The people side of [outsourcing] is a tough, tough business,” Young said. This was at the tail end of a long interview for a piece I was doing on the danger signs of outsourcing contracts. Young was a wealth of useful information on that subject, and now we were talking shop about cutting jobs.

Young has seen his share of hatchet jobs. “I’ve been through this many times,” he said. At one company, where he was dispatched to cut IT costs, the employees called him and his partner “the Bobs,” after the two consultants in the 1999 cult film “Office Space” who were brought in to fire employees. (He had the modesty not to compare himself with the George Clooney character in “Up in the Air.”)

But Young said he “sleeps at night” because he’s convinced that the corporate IT guy is better off working for the very outsourcing provider that displaced him. His argument is that the IT professional working in a corporate IT organization is judged by his ability, of course, but limited by the opportunities to move up the value chain. In Young’s view, those opportunities typically pale beside the potential for career advancement at the big provider firms.

And unlike a corporate environment where you might be locked into a salary, “the more valuable you are to the provider, the more you make,” Young said. And he knows, because he’s kept in touch with people who have made the transition. “Nobody likes to be told, you’re not working here anymore,” he said, “but most people, except the slackers, will be better off.”

This sounds plausible, but didn’t I read not that long ago about IBM shipping U.S. jobs off to India?

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