Off shoring is cool but how about the local companies?

Filed in archive Point of view on May 11, 2007

More and more companies in countries in India (for U.S.) China (for Japanese companies) are involved in offshoring of IT services. Both countries , specially India, have benefited a lot from this increasing trend but it seems that there are also some drawbacks associated with rewards.

Vineeta Shetty of Financial Times talked to some local companies in India such as VST Industries, Indian Cigarette Maker, and apparently it turned out that the companies find it hard to get the attention of their IT service providers because they are simply too busy looking for global customers. Even when they get the service, the Indian managers find lower caliber IT staff assigned to their account.

Unfortunately no other choice comes to the mind rather than increase the value of the contracts at least to the foreign countries which may lead to relative disadvantage because it increases the IT overhead cost of the Indian firms up to level of the U.S. companies. So what should they do at the end of the day?