Moving IT work overseas can have unexpected costs

[RamboLiberal]

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/11/16/BUGTR32G6L1.DTL

U.S. companies sending information technology work overseas merely to cut salary costs may find their savings are either disappointing or short- lived.

The reason is that the unexpected costs of moving IT jobs to India and China, including skyrocketing salaries, are changing the financial equation of offshoring just as U.S. executives are rushing to adopt the practice.

Interviews with business consultants, corporate executives, market analysts, venture capitalists and others who have looked closely at the trend revealed that much of the conventional wisdom about moving IT work offshore is, well, off base.

"Too many companies are viewing offshoring as a tactical decision," said Gregg Rock, president and founder of BrainStorm Group Inc., an offshore consulting firm in Boston.

[glasalle]

1. I'm waiting for my company to wake up..

and realize that offshoring is not as cheap as they think it is. If they talked to the people who work with offshore, they'd realize that the quality and value are also not what they think it is. Unfortunately, there is a corporate directive that states we should use offshore resources as much as possible. When onshore is needed, they ask the offshore firm to bring in offshore workers under B-1, L-1 and H1-B visas. I think of all the unemployed American IT workers who could be filling these jobs and it makes me mad as hell. This has got to be contributing to the jobless recovery.

[Code_Name_D]

2. Its not a mater of cost.

Corperations are ran on fads as much as any thing. Any compnay that dosn't keep up, risks a hostile take over.

Banks also tend not to loan any money unless certian "buisnss standards" are met. And this is dubly so should the compnay already be in debt as the banks reserve the right to "insure the equidy ot the loan." And banks love fads even more than investors do.

Dilbert said it best. "We're doomed!" Embrace your distruction, and you shall be free. Free to fail.

[ramapo]

3. Not as true as it once was

Many offshore IT workers have great experience thanks to their employment as H1B visa holders.

Offshoring started quite a few years ago. The proper project management and planning must be in place to make these projects a success. But for most large organizations (and global companies especially) offshoring is cheap labor.

From my experience in this business...Indian IT workers have excellent education and skills.

[Flightful]

4. You got that right

Smartest thing the Indians did after independence was keep the education standards and institutions created by the Raj. Most of the Indians I know are doctors, engineers and programmers. I am on a project with an Indian-owned firm in Dallas and they do superb work- anyone who thinks offshoring to India is about cheap labour should read "The Decline and Fall of the American Programmer".