Saturday, May 27, 2006

Cross-Sourcing - Start of Reverse Outsourcing ?

How does transferring part of the outsourced work back to homeland sound ? Intriguing ? Baffled ? Well, don't be...For that is exactly what a Nebraska based Information Technology company has decided to do. Xpanxion, an Atlanta-based provider of global software development services, has announced plans to relocate a segment of its software testing operations and quality assurance (QA) program from Pune, India to Kearney, Nebraska.


Dubbed by the company as Cross-Sourcing, the aim is to get the best of both lands. Extract high quality top-end work from Nebraska rural community, as claimed by the company...and at the same time take advantage of the cheap labour available in India. The company's statement goes like this

"Cross-Sourcing allows us to parlay the economic value of our programming team in India, the expertise of on-site project managers in Atlanta, and the high work ethic and quality standards of the Nebraska workforce," said Paul Eurek, Xpanxion's CEO, a Nebraska native who grew up not far from Kearney. "It also allows us to take advantage of several government incentive programs in Nebraska aimed at increasing the presence of IT industries in rural areas."


What is surprising though is that the American media has not evinced as much interest as the Indian media has done on this. When you have an American company that is fighting back total outsourcing and trying to win support of the people back at home, it is natural that it would be given a hero's welcome by the local and national press. However the way the American media choose to ignore this piece of news shows the pessimism wrought across the American media about this being just a flash in the pan and nothing more. Equally strange is the attention that the Indian media is showing it given that the coverage might just get other American companies to start thinking on the lines of cross-sourcing. Indian business leaders might already be on their toes to gag the Indian media and do some damage control.

Whether the company in question, Xpanxion, has opted for cross-sourcing as a means to get the best of both worlds as they claim to or is just a step taken under pressure from political circles in its home state back in US would remain a speculation. One look at the Xpanxion website will indicate the amount of caution the company is advocating when choosing a company to outsource to. What is more important from the Indian perspective is to do a thorough analysis of what factors in the BPO industry in India, if any prompted this backward step by the US company. It could be any of the following

  • Poor Quality processes being followed.
  • Under trained staff.
  • Less than adequate English communication skills.
  • Un tolerable English accent.
  • Poor infrastructure.
  • Lack of government response to industry problems.
  • Lack of domain specialists.
  • Breach of security with respect to data.
  • Poor work ethics.
  • Rising BPO costs due to inflated salary packages.

India Inc. cannot afford the stray incident to turn into a mass exodus. The only way to ensure that it does not happen is to do a thorough post-analysis of this incident and set right the short-comings.

Read more on Outsourcing here and here

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