7 Reasons The Bloom Is Off Asian Outsourcing

Once the rage among U.S. companies and the bane of domestic consulting and outsourcing firms, Asian outsourcing, notably in India, is falling on hard times, solution providers say. Language barriers, hidden costs and solution providers half a world away from the customer all spells the rebirth of outsourcing for outsourcing firms in the Americas. 1. Have you checked airfares to Mumbai? Solution providers say forget about e-mails, phone calls and Skype, there are times in the course of a project when the integrator must meet face to face with the client. The distance and expense to India means the low-cost outsourcing option might not be so low-cost after all. By the way, the cheapest flight we found on Orbitz from JFK to Mumbai was about $2,000 for a 15-hour non-stop flight. And forget about sitting in business class at that price. 2. What time is it in India? A better question is: What day is it in India? The time difference between Eastern Standard Time and Mumbai is 10.5 hours. Even with the phone and electronic means of communications getting people's minds and bodies in sync half way around the world is a challenge that can put significant wrinkles in any IT project. 3. The language barrier. They speak English. We speak English. Tell that to Dell and others who have shifted call centers back to the United States at the insistence of some of their biggest customers. When working on IT projects, precise communications are vital to success. We're not being xenophobic here. Our accents are as difficult for the Asians to sometimes understand as theirs are for us. 4. Nearshoring is gaining traction. Dallas-based solution provider CompuCom, for one, is leveraging its Canadian operations as outsourcing centers for the U.S. Canada is next door. Time zones align. And our English is close enough to each other's to avoid most miscommunication, unless you like cookies with your coffee instead of biscuits. With the Loonie now worth more than the U.S. dollar, however, that could throw a wrench in the Canadian outsourcing cost advantage. 5. Latin America. Okay, so the dollar is heading south in Latin America as well. Still, Mexico, Argentina, Chile and Brazil all have growing pools of IT talent. Neoris, the Miami-based IT consulting firm, is taking advantage of Latin America, noting the quality of talent is high, turn over is far less than in India, and Monterrey, Mexico, for example, is only an hour's flight from Dallas. Another company looking south for talent, Phoenix-based solution provider Camisa, has a deal with the Sonora state government in Mexico to hire Mexican software engineering graduates from local universities in Hermosillo to do CRM and ERP development work for U.S. customers. And many Latin American engineers speak better English than we do. 6. You get what you pay for. American companies want ROI, not simply low price. There is no substitute for a local solution provider that understands your business and can design services that match your needs. That's one reason Waltham, Mass.-based NWN wrestled away a managed services deal at Welch's in nearby Concord from an Indian outsourcer. The toughest language to learn is the language of business. Face to face contact on a regular basis is the best way to pick up the lingo. 7. Cultural barriers. And we're talking about American idiosyncrasies here. American companies are very hands-on in managing and working with their outsourcing partners. That's a polite way of saying we are compulsive. Keep your friends close, your enemies closer and your outsourcing partner closest.