Back in the early days of offshore outsourcing -- which is to say, less than 10 years ago -- Atul Vashistha had a problem. "We had these technology products, and we could not do development fast enough because we were having challenges in hiring workers in the U.S. -- engineers, particularly software engineers," recalls Vashistha, who at the time was senior vice president at healthcare giant Cardinal Health.
Around the same time, his travels around the world revealed a unique opportunity. "What had happened in manufacturing 10, 20 years ago -- I started to see the seeds of that in services," he says. "Those two things came together for me in 1998, and I realized that something big was happening. I would never say that I was the first to think about it, of course, but I definitely started to see that this was something that was complex and that companies were going to need help to address it."
A year later, Vashistha founded services globalization advisory firm neoIT. "I'm a big believer that whenever you do something, you have to have a passion for it," he says. And this has meant defending the idea of global free markets against some tough opposition. In 2004, he went up against CNN heavyweight Lou Dobbs -- live.
Still, Vashistha feels that he got his points across. "This country has benefited from free trade, and Lou's stance is anti-free trade. It's wrong. Basically it means going back on the capitalistic principles that we teach around the world," he says. "History has shown us that our success comes from innovation; the United States has been a great economy because we innovate," explains Vashistha, who last year coauthored The Offshore Nation: Strategies for Success in Global Outsourcing and Offshoring (McGraw-Hill, 2006).
The latest challenge to advocates of offshore outsourcing comes from the widely reported views of Princeton University professor of economics Alan S. Blinder, who estimates that 30 million to 40 million U.S. jobs are potentially offshorable and that a large percentage of them will migrate overseas in the next decade or two.
Scary numbers? "Actually, it's not scary," says Vashistha. "Take a look at the statistics on the other side. We have an aging population in our country. In that same period of time, I've seen statistics that say that 15 million jobs won't be able to be filled because of our retiring population." He adds that "everybody is assuming that we won't innovate as a country at all. But we're going to do what we've done historically -- be flexible and create new jobs, new opportunities."
There's no question that the transition will be challenging, though. "I absolutely believe that there are a large number of jobs --whether 10 million or 15 million or 20 million -- that are going to be outsourced by the year 2015. By 2010, we'll start to see greater scale than we see today, and by 2015 it becomes fully integrated within companies."
For CFOs, the next stage in the evolution of offshoring opens huge opportunities. "The perfect example would be accounts receivable. The data entry was the first thing that got done overseas. The next stage was: 'Why don't we actually process it -- make the billing happen, take care of the approvals?' Doing analytics to understand where the risk lies takes it to the next level," Vashistha notes. "What finance leaders will start to look at is to find not just CPAs, but MBAs in finance and masters in statistics. The focus is going to be more and more on analytics and trend analysis."
For U.S.-based workers, the keys to prosperity in the new global landscape are education and specialization. "Try to understand how to work with people from around the world, because your teams are going to be distributed now," says Vashistha.