Offshoring No Panacea

By CIO Update Staff

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Even as the prospect of high-skilled American jobs moving to low-wage countries like India ignites hot political debate, some entrepreneurs are finding that India's vaunted high-technology work force is not always as effective as advertised.

"For three years we tried all kinds of models, but nothing has worked so far," said the co-founder and chief technology officer of Storability Software in Southborough, Mass.

After trying to reduce costs by contracting out software programming tasks to India, Storability brought back most of the work to the United States, where it costs four times as much, and hired more programmers here. The "depth of knowledge in the area we want to build software is not good enough" among Indian programmers, the executive said.

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.

For many of the most crucial technology tasks, they find that a work force operating within the American business environment better suits their needs.

"Only certain kinds of tasks can be outsourced -- what can be set down as a set of rules," said Nariman Behravesh, chief economist of Global Insight, a forecasting and consulting firm based in Waltham, Mass. "That which requires more creativity is more difficult to manage at a distance."

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This article was compiled and edited by CIO Update staff. Please direct any questions regarding its content to Allen Bernard, Managing Editor.