Wednesday, April 28, 2004

Pendulum swinging back on offshoring?

The NY Times reports on the story of Storability Software, which tried for three years to contract out programming work to India before throwing in the towel and bringing back most of the work to the U.S. where it costs four times as much. It seems that the knowledge that Storability needed was simply stronger among U.S. programmers.

Interesting enough. But, here's the kicker:
If it sounds like "Made in the U.S.A." jingoism, consider this: The entrepreneur, Hemant Kurande, is Indian. He was born and raised near Bombay and received his master's degree from the Indian Institute of Technology in that city, now known as Mumbai. Mr. Kurande is not alone in his views on "outsourcing" technology work to India. As more companies in the United States rush to take advantage of India's ample supply of cheap yet highly trained workers, even some of the most motivated American companies — ones set up or run by executives born and trained in India — are concluding that the cost advantage does not always justify the effort.
Read the whole article, which points also mentions the case of Dev Ittycheria, Indian born CEO of Bladelogic, who found that although the monthly cost differential was three to one in favor of India, the difference in productivity was six to one in favor of the U.S.

Related posts
Productivity risks in offshore outsourcing
Risks of offshore outsourcing
Outsourcing: the next bubble?
Offshore labor drove firm to brink

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