25th Feb 2008 by Mark Turansky
The Great Indian Outsourcing is over
Filed under The Great Indian Outsourcing movement will be over within two years.
That’s what an architect turned blogger who writes anonymously from Bangalore is predicting. The author is writing from the movement’s Ground Zero, so he may have better insight than the rest of us. But I’ve got good anecdotal evidence from a local outsourcing company that lends weight to his prediction.
I live and work in Charleston, S.C., an area known more for its beautiful beaches and gorgeous live oak trees than high technology (though we do have Robert X. Cringley). But Charleston’s location can attract businesses that don’t necessarily need high technology, just smart people. Outsourcing is one of those types of businesses.
I know personally a project manager at a local outsourcing company. Our daughters go to school together. We were talking at a recent birthday party about outsourcing, cost, and the availability of talent. Business is booming, but it has little to do with cost, she tells me. She says its the lack of local talent that drives most of their business. They deal largely with the marketing end of technology, making websites and fancy Flash applications. Madison Avenue marketing firms would rather hire local Flash experts, she says, but they’ve hired them all. They’d prefer the rapid turnaround that local talent can give them. There just aren’t enough talented people in NYC to fill the huge demand, so they outsource to Charleston, S.C. In turn, this local company sends the work to a development center they own in Costa Rica. Costa Rica is, I’m surprised to learn, a hot up-and-coming technology spot. And you don’t have to wait 12 hours for Costa Rican project managers and developers to reply to email or voice mail.
The Tired Architect - our Bangalorian blogger - talks about the availability of talent in Eastern Europe and China, and there’s obviously talent in Central America. Brazil is another up-and-coming technology hot spot.
I agree with The Tired Architect that India’s monopoly on the outsourcing market is over.
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Tech hiring is extremely difficult lately. Anyone with a decent resume can get programming work in the U.S. People with basic computer and office skills are the ones who are having a tough time getting work these days.
How do we know that US is entering a recession? The numbers and pattern tell us that. For instance house sale is down and spending is crunched.
How can we say outsourcing to India is over just because of this one SC incident
If you look at the figures, India’ share of outsourcing pie is increasing phenomenally every year. Perhaps the wages have risen and attrition rate is very high, but still nobody is applying the brakes yet.
-Tarun
http://www.techbanyan.com
[…] I thought this article would talk about my beliefs on why Indian outsourcing is ending, but it left out any reasons, so I’ll add my thoughts. » The Great Indian Outsourcing is over: […]
There never was an outsourcing monopoly to begin with. I’m based in Ireland and I have outsourced development work to the US, Ireland, India and Romania. Who I outsource to depends upon 1) time to market, 2) technology, 3) the technical risks 4) cost and most of all 5) the level of detail that I have been able to incorporate into my requirements.
India was never going to be ideal for Madison Avenue given the need for face time between “creatives” and rapid requirements churn. The loss of this kind of contact does not spell doom for the Indian outsourcing industry.
I have visited the headquarters of the Indian big guys (Wipro, Tata Elxsi, etc) and I can tell you they have the capacity to take a lot of knocks during this recession and to come out the other end stronger and more effective. My belief is that a recession will help the big Indian players as it will destoy a lot of their cheaper local competition that is currently competing for graduates. It will also help them weed out a lot of the poorer employees that were recruited during the boom times.
While it may be drawing an end in India, don’t expect it to go away completely. See here for more info on my take on the whole situation:
http://www.mcdonaldland.info/2007/10/21/outsourcing-and-the-economy/
Opiniones de gente de verdad sobre asuntos de verdad en Costa Rica: http://tiquiciadeverdad.blogspot.com/