At the height of the American presidential campaign dominated among other things by offshoring and a jobless recovery in 2004. The HCL’s Vineet Nayar set off a forestorm with a comment that American graduates were not employable. Two men looked at the reaction the comments had caused and wondered if there was a business opportunity as a trade unions seethed and politician fumed. To the process in the years ahead, since offshoring was considered a purely Indian phenomenon and sensing a backlash. In the US the two Debashish and Neeraj Gupta two IT industry executive began quietly working on an alternative that would appeal to many companies and the political establishment.
With a concrete plan and get investor funding it took them five years. The system in motion, a Michigan-based start up, it launched few months ago plans to challenge the traditional offshore outsourcing market leaders, by a delivering low cost services from locations such as Ann Arbor. It is still being viewed with the Indian outsourcing industry in the US as one of the reasons for the country’s jobless recovery.. The start up is promising to create more than 1,100 jobs over the next five years.
The company is backed by the several angel investors including Preetish Nijhawan, the Akamai founder has Michael G. Parks, the former CIO of Virgin Mobile and wells Fargo on the board too. With the nearly 30 percent unemployment rate in the region, for every Java programmer advertisement, they are around 100 applicants with many of them having a decades experience. Stan Lepeak, the managing director of Equa Terra’s global research practice said that there will be more start-ups providing onshore services but it will remain a niche business and represents the ongoing evolution of outsourcing rather than the indictment against offshore outsourcing. The bulk of new jobs in the US have a long been created by the small businesses and that is another example of that.
To the job creation, the Michigan government has already assured tax rebates worth around $7.4 linked. The local outsourcing to low cost American locations is not entirely a new trend. The smaller US firms such as Rural America Onshore Sourcing and Xpansion have been attempting to builds a sustainable rural outsourcing model in the US at a time when offshore locations such as India are facing a backflash and unemployment rates that have touched an all-time high.
An Atlanta-headquartered software firm is Xpansion in which shifted its software testing work from Pune to Nebraska a few years ago is among a handful of such firms seeking to create a more comfortable and cost-effective alternative to offshore outsourcing. Coca Cola and Goldleaf Financial Solutions are among the customers outsourcing software projects to Xpansion. The cost advantage of delivering a project from a location such as Corsicana or the Kearney could be almost 20-40 percent cheaper when compared to Los Angeles.
In some ways Vineet’s comments were among trigger. The market begins to see offshoring as a pure Indian phenomenon, however we launched System In Motion to leverage the American workforce. The employability crisis was a global problem that needed to be solved together by schools, students and governments. For the large outsourcing customers, India would continue to remain attractive.
REFERENCE;
http://www.globalservicesmedia.com/Destinations/India/SIM:-Indian-Outsourcing-Companies-Get-a-New-Competitor/25/18/9323/GS100211888058
http://articles.economictimes.indiatimes.com/2010-02-08/news/27576520_1_offshoring-indian-outsourcing-equa-terra
http://m.economictimes.com/PDAET/articleshow/msid-5546713,curpg-3.cms
