A Modern Gordian Knot

A Modern Gordian Knot

by / March 29, 2004
Who knows how long Alexander the Great scrutinized the Gordian Knot to find a way to untie it. He was clearly motivated: An oracle prophesied that the person to loosen the intricate knot would rule Asia.

After some deliberating, Alexander solved the problem by unsheathing his sword and cutting through the knot -- fulfilling the spirit of the prophecy, if not the letter.

Did he cheat? Maybe.

Was it an elegant solution to a vexing problem? Certainly.

Offshore outsourcing has become a modern Gordian Knot. No one appears poised to deliver an elegant solution to this complex issue, but everybody's got an opinion on it, ranging from hatred to tolerance, acceptance to resignation.

Pick up a newspaper, and you'll find angry quotes from unemployed IT professionals vilifying U.S. businesses that send projects to programmers or application developers in China, India or the Philippines. Those same stories contain quotes from academics or economists explaining the ebb and flow of skilled jobs in a global economy, and carefully crafted sound bites from politicians stumping for a halt to offshore outsourcing.

Suddenly it's wrong to make a bottom-line decision and award a job to an India-based company that employs highly skilled programmers or developers fully capable of delivering the goods at a fraction of the labor cost.

Unfortunately this is capitalism. It doesn't care about feelings. It cares about profit. It cares about seeking out the lowest market price for commodities -- which programming and application development clearly have become. It cares about margins.

Capitalism, especially global capitalism, is about efficiency. American consumers are happy when we purchase efficiently made products that last. We know those products often come from abroad, but we don't care as long as they benefit. Turn the tables though, and we aren't happy when global capitalism sticks it to us by shifting high-overhead functions, like factories and jobs, to places where overhead isn't a problem.

It's not possible to have one without the other.

The same hue and cry was raised against foreign automakers like Toyota or Honda when they virtually wiped out U.S. juggernauts Ford and Chevrolet. As factory-line jobs drained from Detroit in the 1970s and 1980s, newspapers bemoaned overseas competition. "Buy American" bumper stickers appeared on U.S.-made cars.

The hard reality is that Toyota and Honda outperformed U.S. automakers, and consumers responded to the reliability and better gas mileage of those Japanese-made cars by buying them en masse. Is it any different now? We're talking about software code instead of cars, but the situation is the same.

The public sector is not exempt from the backlash against offshore outsourcing. Legislation in more than half the states seeks to restrict or ban outright use of offshore outsourcing in contracts with state government.

Even now, when the argument for offshore outsourcing in certain aspects of state and local government IT projects is very compelling, given the money problems everybody faces, agencies feel pressure to shun the option.

Perhaps after the November elections the clamor will die, but the knot will remain tied.
Shane Peterson Associate Editor