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Obama wants less offshoring, as vendors see U.S. shift

Patrick Thibodeau | Jan. 20, 2012
President Barack Obama is trying to encourage U.S. companies not to send work overseas. This might not be as hard a job as it seems for some types of IT work.

Moore said additional data is needed to show that inshoring can be cost effective. If companies look at all the costs associated with offshoring, such as business analyst support, to ensure that offshore teams meet all the project requirements, "all of a sudden it looks like it could be quite a bit cheaper to code in the U.S."

Among the reasons for the increasing interest in doing work in the U.S. is the use of Agile development processes, which emphasize highly collaborative teams, said Debashish Sinha, chief marketing officer at Systems in Motion.

A lot of the productivity gains, Sinha said, come from the proximity, the ability to work with customers in the same time zone, as well as an improved understanding of how a process is implemented.

GalaxE.Solutions, a New Jersey-based IT services firm, opened an office in Detroit two years ago and launches a program called "Outsource to Detroit." The company employs 2,000 people globally, including in India and China, but sees the domestic IT services market expanding. It has 150 people working in its Detroit office, and expects to have 500 by 2015.

Ryan Hoyle, the director of global recruiting for the company, said the IT services market is shifting from finding the lowest price point offshore to the quality of product.

Hoyle said the domestic IT insourcing trend will pick up speed. "There is also the feel good aspect of being able to put fellow Americans back to work," he said.

But the Indian firms are still growing. Tata Consultancy Services reported this week that it added nearly 12,000 net new employees to payroll in its most recent quarter. The company employs 226,751 people.



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