The India Connection: Five reasons why outsourcing outside of the U.S. is a bad idea

In the online world, there are very few words of advice that don't have a correlation in the offline world -- if things are too good to be true, they probably are, nothing is ever quite what it seems and let the buyer beware.

Roll all those homilies into a tight little ball and you've got a workable strategy for dealing with one of IT’s hottest issues – outsourcing.

Outsourcing involves services such as payroll management, accounting and claims processing from third parties using high-speed telecoms. Like most tech issues, both sophisticates and neophytes see this latest thing as a panacea that will flatten all their problems and free up more time to make money and grow business.

Proponents of outsourcing whisper the sweetest things -- great and small -- in the ears of harried businesspeople. To borrow a page from singer Chris Rea, it's almost like being in love. A sonnet by Shakespeare pales in comparison [suggestion: hyperlink to Shakespearean sonnet, url: http://www.cs.rice.edu/~ssiyer/minstrels/poems/44.html]. But, when it all shakes out, the decision to outsource comes down to some very simple advice. If you ever have to meet face-to-face with your provider, or perform some due diligence on his facilities, would you prefer to drive across town or take a plane ride?
Despite some robust code that's being written and the sturdier nature of today's programming, the businessperson who has never had to pick up a phone in a panic for a software fix is harder to find than Diogenes' honest man.

IT happens -- and when it does, it's nice to know that the people who can solve your torment are close at hand. And, if that sounds too warm and fuzzy for you, try this five-point business case for double-checking your need to outsource.

Reputation
[url:http://timesofindia.indiatimes.com/cms.dll/html/uncomp/articleshow?msid=241993]
Even Mom and Pop businesses care what their customers think of them. The fact of the matter is that in today's business climate, sending a job overseas is a less routine matter than it has been in the past. American workers are feeling the strain of a global market and it only takes a little bit of math to calculate that American workers are American consumers.

Start-up costs
What will your savings be if your set-up takes you three months longer than anticipated? Six months? What about language issues? Neither India, Russia, nor China are countries where English is a primary language. And, while code may be universal, culture is not. Could working with your product cause some cultural backlash? Taking calls for a beef-packing plant in India? Writing code for a bikini manufacturer in a Muslim nation? CIO's of major companies will tell you: even in India, which is ahead of the pack, outsourcing is difficult and time-consuming.

Supply and demand
Outsourcing is a nascent industry in India, but as large companies continue to use their services, the load factor will start to affect the number of qualified workers - English fluent, technologically savvy - available for your contract, just as it has in America. If IBM is employing 5,000 workers for a center, who do you think will receive preference for those premium workers?

Responsiveness
Business needs everything done yesterday. What time is it in Calcutta at this moment? Downtime is a fact of life and with it, there are customer response issues to consider. Repeated slowdowns or breakdowns mean either staying the course and hoping for better - a cost factor - or cutting your losses and bringing your business back to the U.S., another cost factor. And, in a worst-case scenario that requires legal action taken against your provider, which court systems will prevail?

Time and Fit
Any business that has successfully outsourced will tell you. It doesn't come easy. It requires a well-planned strategy, new processes put in place and information officers who are able to change themselves for their new roles and responsibilities. Depending on the magnitude of your projected savings and the type of business you are in, it might be better to keep your business in the U.S.

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