Monday,
May 5, 2003
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Feature |
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US IT titans back
outsourcing to India
Vasantha Arora
Even
as a media and government outcry against shipping jobs overseas
continues in the USA, big industry names still seem keen to outsource IT
work to India. US telecom giant, Sprint Corporation, is wondering
whether to send IT work to India in a bid to save hundreds of millions
of dollars.
Steve Klika, president of
the International Motor Coach Group Inc. (IMG), wonders why there is any
debate at all on this. He says he couldn’t be happier with the IT work
he sent to India to build his company’s Website.
"They’ve got a
bunch of techies over there," Klika says of India. "They
kicked butt and got it done so fast," according to bizjournal.com,
a Website that covers business news from Kansas state.
Depending on the job,
shipping work offshore typically saves 20 per cent to 50 per cent of a
project’s cost. Increasingly, firms such as IMG are realising what
Fortune 500 firms realised long ago: an economic shift will send IT work
oversees, particularly to India, because of low costs.
Experts compare the trend
to the loss of US manufacturing jobs overseas in the seventies and
eighties.
Forrester Research Inc. of
Cambridge, Massachusetts, projects that 3.3 million IT jobs in the USA
will go overseas by 2015, translating to $136 billion in lost wages.
It is not necessarily a
great trend for the US worker, says Paul Peterson, a local IT
consultant. But you can’t bury your head in the sand and say it’s
not going to happen, he remarked. He has thus opened an office to help
companies ship work overseas.
With a team of
consultants, Peterson has become the broker between Kansas City IT staff
and large outsourcing companies in India.
Companies like MBS charge
an hourly rate for each project, blending the rate of US consultants and
offshore workers. Data is held domestically, and the work is done
overseas, mitigating security risks, Peterson said.
PenDragon Consulting Inc.
is another offshore IT broker who is using its relationship with Object
Technology Solutions Inc. (OTSI) to ship IT jobs overseas.
OTSI is run by Narasimha
Gondi, an Indian entrepreneur, who takes orders in Kansas City and sends
them to his two facilities in India. The company has done work for
Sprint, the Kansas Department of Transportation and the National
Football League. It also designed IMG’s Web page.
Despite that enthusiasm,
the shipping of IT work overseas has many detractors, fearful that the
quality of
projects is being sacrificed for cost
savings.
The costs are always going
to be cheaper but the primary concern is quality, said Neal Sharma, CEO
of Digital Evolution Group LLC. Sharma’s firm designs Web pages and
Internet-based software solutions. He has considered sending work on
certain projects offshore, but Sharma said he still isn’t sure that
quality hasn’t been sacrificed.
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