IT Outsourcing India

Most providers target the burgeoning domestic market, but a few offer a hybrid approach that appeals to the West.

About two years ago, Kevin Miller needed a little help supporting legacy applications and developing new software for large automotive manufacturers. He decided to conduct a Cobol pilot project with Information Technology United Corp., a Beijing-based outsourcer with U.S. offices in Redwood City, Calif.

“We’d seen their marketing and qualifications; we just wanted to do a proof of concept to make sure that everything worked,” says Miller, who is systems consulting manager for the automotive solutions group at Dallas-based Affiliated Computer Services Inc. (ACS).

Miller’s team had worked previously with vendors in India and Russia. China was new territory, but the Chinese company had the right skills at the right price. It offered Web development skills, .Net experience and CMMI Level 3 certification, indicating mature processes. “And their cost structure was very competitive,” he says.

Since that first pilot project, the relationship has expanded. Today, 15 IT United people are working on ACS projects, and ACS is in the process of bringing on 15 more, Miller says.

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In tough times, companies look to shift tech work to outsiders, whether offshore or down the street. Be careful: This "cure" could be deadly.

As companies look to economize in a weak economy worsened by rising energy costs, it may be more tempting than ever to consider outsourcing your IT — whether to a cloud-based provider, to a shop in your town, or to a provider in some far-off land. Certainly, outsourcing has worked well for many companies, but it can also lead to business-damaging nightmares, says Larry Harding, founder and president of High Street Partners, a global consultancy that advises company on how to expand overseas. After all, if outsourcers fail, you’re left holding the bag without the resources to fix the problem.

In his consulting, Harding has seen many outsourcing horror stories, from corrupt general managers "with all sorts of conflicts of interest" (such as service providers getting kickbacks from landlords on the leased space) to projects torn apart by huge turnover rates. "You end up with project teams that are hugely inconsistent.

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