IT Out Sourcing 2.0, for the Flat World

IT Outsourcing, a couple of years back, literally meant  shifting Product Development, Software Implementation and most of  back office management to India (from US and major European countries). But when Nandan Nilekani of Infosys said 'The World is Flat', he did not mean moving work to Bangalore alone or India in general.  In fact he was hinting about  the future of Outsourcing, the out sourcing 2.0.

"Any thing can be outsourced to anywhere in the world." (Following  the same tenets of outsourcing : price, time and knowledge)

Facing serious problems of attrition and salary increases and increasing competition all over, Indian IT companies are fast expanding to rest of the cheaper and better world: Mexico, China and a few other third world countries. Time is fast approaching for Indian IT engineers to start discussing about  loosing their jobs to their cheaper counterparts in the rest of the world. 

While expansion to Mexico, China and few other third world countries seems to be a rational choice, I am little confused with the rationale of American graduates in choosing outsourcing firms. Having spent most of my time in one of the top three IT firms in India, I have no clue why American College graduates turn down Google and join Infosys. The following story in NY Times says that it is happening.

Many of them are recent American college graduates, and some have even turned down job offers from coveted employers like Google. Instead, they accepted a novel assignment from Infosys, the Indian technology giant: fly here for six months of training, then return home to work in the company’s American back offices.

India is outsourcing outsourcing.

Outsourcing Works, So India Is Exporting Jobs - New York Times

Times are fast changing. Businesses and markets world wide have tasted outsourcing and its price advantage. It will never stop. Weak Dollar and alarming attrition rates have started forcing Indian IT firms to go for job cuts and expand further into new cheaper destinations. This, I believe,  will increase exponentially in the next few months.  The saga of outsourcing continues. For businesses, it doesn't matter. Infosys may not care whether they do it from India or any part of the world. They also need outsourcing to rest of the world for the same exact price advantage.

That would,  in general change a lots of things for the Indian economy, that has been riding on the high tides for a while. And  these are definitely quite an Interesting and very tough times for typical Indian IT engineer, who have already deeply in debt trying to reach out booming and mostly hyped up real estate and western lifestyles. Can they afford to loose their jobs at this juncture to rest of the world? 


Linderman said…
IT outsourcing is the main reason for the economy boom over the last few years in INDIA...Good article

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