Offshoring and Knowledge Depletion

I have recently watched a very interesting presentation by Gunter Dueck (former CTO of IBM in Germany), where he talks about the future of work. When looking at how many consulting organizations structure their business, you can see a trend that seemingly high-level parts, usually the interaction with the customer and where business domain knowledge is required, stay in your own country. And those aspects that can, allegedly, be performed by less qualified people are moved to countries with lower salaries.

This may seem attractive from a cost-management point of view for a while. And it certainly works right now – to the extent possible. Because the organizations still have people locally who had been “allowed” to start with relatively simple coding tasks and grow into the more complex areas of the business. But what if those folks retire or leave? How do you get people to the level of qualification that allows them to understand the customer’s business on the one hand, and at the same time be able to have an intelligent conversation with the offshore folks who do the coding? Because for the latter you must have done coding yourself extensively.

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