IT Brings Labor Back Home; Scraps Offshoring

Not long ago in the IT sector, it seemed outsourcing jobs overseas was the logical, better and cheaper thing to do. Now, as many have said all along, they are realizing that it wasn't the inexpensive answer to their prayers and problems after all. Language barriers, time zone differences and even unscheduled overtime are just some of the issues causing some U.S.-based enterprises increased frustration and pushing them to not just reconsider their offshoring policies but scrap them outright.

For example, Joe Baca, director of application development with a $400 million Midwestern manufacturer that he preferred not to name, was taken in by the promise of payroll savings by offshoring. After two and a half years, he claims enough is enough.

"The cost savings [of outsourcing] are not enough to outweigh some of the frustrations with the cultural differences of having outsourcers based in India," said Baca, director of application development with a $400 million Midwestern manufacturer that he preferred not to name. "We can't do anything in an emergency. Our hands are tied," Baca said. "We have to go back and say, 'Please translate this.' In a service-level environment, the overruns are what are killing you. Overtime is an hourly rate, and it's not built into the [outsourcing] budget."

A recent survey by Boston-based IT research company AMR Research Inc. reported that less than one-third of the 220 companies surveyed that currently outsource some IT work are satisfied with the cost savings enjoyed by the process. Still, AMR predicts that the number of companies that will use IT outsourcing in the next two years will grow significantly.

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