Categorized | Companies, India

The Dilbert Moment: India outsources to US

A website with a hifalutin sounding name called Intelligententerprise has published an article titled, India outsources to US tech workers. The author has basically gone ga-ga over a spate of recent business deals won by American companies in India and how this is “supposedly” going to benefit the US tech workers. And to totally rub it in, he is wondering if the American workers are up for this “cultural” and “geographical” challenge.

What a hoot.

To give meat to his argument, author cites the example of a multi-year outsourcing deal snagged by IBM for providing IT services to Vodafone in India. Also, HP India won a competitive bid from Brittania, India’s Nabisco, for a comprehensive IT outsourcing and transformation project”.

The buzz in the local Indian trade magazines is about IBM recently grabbing a multi-year outsourcing deal from the Indian operations of Vodaphone, the global communications giant. Deals like these demonstrate that countries like India and China are more than merely the source of competition for US-based IT firms (and US-based consultants), they offer a solid opportunity for those willing to brave the geographical and culture gap.

HP wins three-year, value-unspecified “comprehensive IT outsourcing and transformation project” with Brittania Industries, a leading Indian consumer foods company. According to the HP India managing director, the Britannia contract would enable HP India to “leverage its worldwide expertise to make the differentiation.”

All well and good but the basic question is, does it necessarily benefit the US tech workers? The article is not very forthcoming here. Since an American company won the contract, add two plus two and obviously American workers will get to execute it. But apparently its not all so cut and dried.

Companies primarily outsource to cut costs. To remain competitive on the basis of price, the likes of IBM will have to get this work done in countries like India and at prices like India. Otherwise in all likelihood, IBM would have been out bidden by local players like TCS, Infosys etc. who are sometimes equally good if not better in terms of quality.

(Point to ponder – American HP asking its IT personnel to assist in comprehensive IT outsourcing? Son of a gun, last I heard HP was the leading laptop maker in US. Lets not even go down that path).

Besides benefiting the stock holders and corporate fat cats, how this deal presents a win-win situation to the American tech worker, as the author would like us to believe, remains to be seen.

American companies will continue to lead the pack with /in original research and innovation but assembly-line like software grunt work is something which other countries, especially India would continue to improvise and deliver at a cheaper price.

Read the original article from here.

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