Outsourcing IT work to India: A U.S. debate rages

Tuesday, 29 April 2003, 07:00 Hrs
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Even as a media and government outcry against shipping jobs overseas continues in the U.S., big industry names still seem keen to outsource IT work to India.

WASHINGTON: U.S. telecommunications 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 said 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 percent to 50 percent 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 U.S. manufacturing jobs overseas in the 1970s and 1980s.

Forrester Research Inc. of Cambridge, Massachusetts, projects that 3.3 million IT jobs in the United States will go overseas by 2015, translating to $136 billion in lost wages.

It is not necessarily a great trend for the U.S. 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 U.S. 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 that 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.

Source: IANS

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