Look Beyond Ban and Backlash

I am very proud of India’s achievements in technology, having been born and
raised in India. At the same time, I have worked in the American IT industry for
twenty-five years and many of my friends are now losing their jobs or taking
huge pay cuts. The upshot is that I have deeply mixed feelings about the current
state of global IT outsourcing.

To the Indian programmers who feel that it is their time to enjoy the fruits
of years of hard work, I say you are right. To my American friends who say that
their careers have been wrecked through no fault of their own, I completely
agree. But to the Americans who say "Ban outsourcing!" and to the
Indians who say, "The backlash is not our problem, just a passing
phase," I say you are both wrong.

Instead of fighting over whose share of the pie is bigger, let’s try to
make the proverbial pie bigger. What both sides need is a cooperative, proactive
strategy that can defuse the backlash and lay the basis for a long-term
strategic alliance between the US and Indian IT industries.

Given current economic and political realities, it is up to the Indian IT
industry to take the lead on this. The market realities are that you currently
have the advantage: the advantage over domestic software consulting firms and
other competitors overseas.

In fact you have most US consulting firms on the ropes. The first IT
recession, the jobless recovery, and outsourcing have just about knocked us off.
It is your choice whether you want to move in for the kill or decide on a
cooperative approach. My suggestion is that the Indian IT industry must look
beyond its current perceptions to understand a few realities about the US.

Here are a few things that Indian IT leaders would do well to consider:

n There is a rising tide of
populism. The argument that outsourcing is good for big business and therefore
good for America doesn’t carry much weight with US voters. While an unemployed
programmer in an American suburb may not be worthy of sympathy in India, he is
getting a lot of press here in the American heartland. Most Americans ignored
outsourcing when it hit blue-collar workers, but now that it’s starting to
threaten lawyers, engineers, and doctors, people are worried.

n IT security is a critical
issue. People who think a few firewalls will solve the problem don’t know what
PC security is about. And now there are a lot of disgruntled US programmers with
an axe to grind. As a result, both US clients and Indian vendors will have to
invest more in due diligence, auditing, and management of security issues.

n The backlash to knowledge
industry "off-shoring" isn’t going away: If price is the only
differential you will soon be undercut by China, then Indian programmers will be
the next ones protesting against outsourcing. Instead, good customer
relationships and advanced skills are essential.

This fact points out a way towards a real win-win solution instead of the
American and Indian IT industries cutting each other to shreds.

There are many skilled US programmer/analysts whose chief skill is not
coding. Instead, their understanding of a customer’s business and their
relationships within a client are invaluable to actually implementing a
successful project. It is true that US programmers can’t beat the Indians in
terms of price or productivity and I don’t think Nasscom, CII and their US
allies can beat the American middle-class politically. If they do, the victory
may not be worth the collateral damage. Instead, let’s find a solution that
addresses concerns of US IT workers and cements long-term alliances between
India and US.

Beyond the Backlash
Indian companies should utilize experienced US consultants for onsite work
as much as possible. This adds value to Indian companies who make use of the
American’s customer business and applications knowledge. Indian firms can hire
and integrate US employees into their firms.

By taking these issues into account, Indian IT leaders can make firm steps to
defuse the outsourcing backlash in the US. In return, it will require a genuine
response on the part of American politicians, companies, and IT workers
themselves. With some effort on both sides, we can make that a reality.

Rob Ramer The author is CEO of a
Minnesota-based outsourcing risk-management company

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