It may just be a blip or it may be a larger indicator of the trend but whatever it is, the reshoring of IT jobs by both Nike and Target is a welcome sign to our economy.
Last month Target Corp. laid off nearly 300 IT staffers. Some wondered if that meant they would be relying more on outsourced talent to handle their IT solutions. But according to a recent article in the Wall Street Journal, those fears can be laid to rest. Target plans to reduce their reliance on offshoring talent and plans to hire 500 software engineers at it’s Minneapolis headquarters citing the desire to maintain a competitive edge by keeping intellectual property in house.
From the Wall Street Journal CIO Journal:
“Keeping the intellectual property created by in-house software engineers preserves competitive advantage”, Mike McNamara told CIO Journal Friday. “Historically, Target has outsourced significant portions of application development and backend systems to India and U.S. firms, such as Infosys Ltd. and IBM Corp. We’ve got to a stage where almost half the team is in third parties. It’s unhealthy”, he said.
Nike recently announced that it would be bringing part of their software development team back to the US because the offshore developers didn’t understand what they were trying to accomplish with wearable technology, there was no cultural alignment offshore.
From Computer World:
“(Wearable technology) didn’t make sense to the people doing the work,” said Christopher Davis, engineering director at Nike+ Running. “(The developers) didn’t fit into the Nike culture.”
There’s really only one reason to outsource talent, it’s to reduce the bottom line. You never hear of a company offshoring so they can increase customer satisfaction or make a better product. Offshoring may cause short-term gains in profit but there’s always a cost. Not having cultural and geographical alignment usually reduces customer satisfaction not to mention the idea that your developer may simply not “get” what the company is trying to achieve.
In addition to jeopardizing intellectual property, as Target recognizes, and the total cost, as Nike recognizes, it has long been the longtime thinking of this author that every dollar that finds its way offshore is many-times a dollar lost to the USA economy, that is if you buy into the general economic principle of the Multiplier Effect, which to me is also common sense. This is one author who thinks it’s been too long in coming that US corporations are recognizing the bloom is off the rose. It’s good to see the offshoring trend reversing!