Thursday, December 5, 2013
By JOHN HELYAR Bloomberg News
ATLANTA — Janie James says she was cool at first when Indian outsourcing giant Infosys Ltd. approached her about a job near Atlanta, even though she was unemployed. She didn't know much about the company, and it seemed a step down from her old vice-president post at Primerica Inc.
Engineering recruits undergo training at the Tata Consultancy Services training center in Trivandrum, India. Tata Consultancy, the biggest Indian outsourcing concern with $10 billion in revenue, also is growing its U.S. presence, opening an outsourcing center outside Minneapolis in September to employ about 300 IT workers.
Namas Bhojani/Bloomberg News
Infosys Technologies Ltd., headquartered in Bangalore, India, had about 12,000 workers in the United States on H-1B and L-1 visas as of June 30, according to a Securities and Exchange Commission filing.
Namas Bhojani/Bloomberg News
In the end, she decided she could use experience gleaned from her work at life-insurer Primerica and another stint at a financial-investment company to help Infosys build its insurance outsourcing business. Now James is an operations manager at the Bangalore, India, company's first predominantly U.S.-staffed center, which opened in April.
"They saw this was a city with a lot of people who were out of work and had the skills they needed for this center," she said. "Anything that can be done to decrease unemployment is a great thing."
FORECAST: SLOWDOWN IN OFFSHORING
James is one of thousands of workers filling outsourced jobs that are coming back to the United States, or at least not going offshore. Indian and U.S. outsourcing companies, along with corporate icons like General Motors and General Electric, are reversing a 20-year outgoing tide.
These companies and others, including software developer GalaxE.Solutions Inc., say some complex functions, such as human-resources and software development, are better to have closer to their own operations and to respond to customers. Indian outsourcing companies are finding it tougher to get visas for workers brought from India, and some U.S. businesses want to outsource – yet keep jobs in the country. State tax breaks also provide incentives to hire locally.
"It used to be just about getting the job done at the lowest cost," said Madhusudan Menon, who heads Infosys's Atlanta center and delivery of U.S. business-process outsourcing. "Now companies are saying some jobs are best done closer to where they are, not cheap as possible somewhere else. They're rebalancing their onshore and offshore outsourcing."
U.S. companies with more than $1 billion of revenue sent 1.1 million technology and back-office jobs offshore during the past decade, according to the Hackett Group, a Miami-based consulting company. While it forecasts a slowing outflow beginning in 2013, it calculates another 400,000 positions will be lost offshore through 2016.
A survey of 617 outsourcing industry executives by Boston-based HfS Research in July and August found the United States is seen as the most desirable region in the world to expand IT and business-services delivery centers in the next two years. India was second.
Respondents have been largely satisfied with the offshoring of low-end jobs, such as call centers and routine IT maintenance, according to Phil Fersht, chief executive officer of the outsourcing-research company. With more complex tasks, the survey showed the headaches may have outweighed the savings.
"We're at an inflection point," Fersht said. "They have picked much of the low-hanging fruit offshore, but they're frequently not getting the quality they need with the more complex functions there." For example, 72 percent of companies said they were satisfied or very satisfied with domestic outsourcing of human-resource services compared with 41 percent who had those tasks done overseas.
The Indian offshore giants are establishing beachheads in the U.S. for political, as well as business, reasons, according to Fersht. President Obama and Republican presidential candidate Mitt Romney have traded charges of being "outsourcer in chief."
Menon sees opportunities for Infosys to capture business from companies that want to outsource some operations while not being accused of sending jobs overseas.
The principal customer at a Milwaukee center that Infosys announced in July is Harley-Davidson, which insisted that the 75 business-processing jobs it wanted to outsource at lower cost remain in the country, according to Maripat Blankenheim, a spokeswoman for the motorcycle company. Infosys said it plans to have a total of 125 employees at the center by attracting other clients.
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