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Manage, Manage, Manage
Meanwhile, behind the political hue and cry, CIOs must struggle daily with global outsourcing's unique management issues. While the business decision itself seems simplewhy pay $85 an hour to a U.S. software developer to do what an Indian developer can do equally well for $40 an hour?managing IT processes over thousands of miles can be daunting. That's why most businesses experimenting with offshoring for the first time don't head overseas themselves to recruit a workforce. Instead, they turn to an outsourcing company with a proven track record that has experienced staff available to handle larger projects, and can scale back just as fast when their client's needs are fewer. These outsourcing suppliers, particularly the half-dozen largest firms in India, are becoming increasingly sophisticated in the ways they help their U.S. clients manage the relationship. Worried about mitigating risk?
Many offshore outsourcing firms are expanding beyond their home countries to provide global alternatives in the event of political unrest or localized economic problems. Concerned about clear communication across thousands of miles and multiple time zones? Larger outsourcing contracts usually include provisions for the offshore partner to provide an on-site liaison in the U.S. to help coordinate projects and specifications. "It's our intention to insulate our customers from the complexities of managing global deployment," says Samuel Goldman, chief technology officer of Intra-sphere Technologies Inc., a New York-based life-sciences IT consulting firm with international operations in London and, come the middle of this year, India. "We can contribute to job creation by balancing the workforce, and the cost, between U.S. resources and offshore resources. That way a client company may go ahead with a project they might not otherwise have been able to afford."
Insulated or not, there are strategic issues that even the largest companies must resolve on their own. Figuring out how to mitigate the political, social and security risks can trip up even the most seasoned IT professional. While the existing political structure of an offshore partner's home country might be conducive to consulting, a new government could come to power that may seek to nationalize the industry. An emerging country might offer a low-cost, nonunion workforce today, but burgeoning affluence could change the economic picture tomorrow. And, as with any outsourcing relationship, it's difficult to control proprietary code or private records once they've left the relative security of a domestic network.