What the hell is extreme offshoring?

By | 31 August, 2010

Outsourcing, offshoring, near sourcing, rural outsourcing are the terms which we use when we talk about any IT services company. Now there is a new term to be added to the list – extreme offshoring. I am really not sure what it means, but I will make an attempt.

Infosys is planning to use ‘extreme offshoring’ to offset the hike in visa fees by the US government. The US government, in a bid keep Indian IT companies from taking American jobs, has hiked the visa fees to some ridiculous levels. Indian IT companies are taking it up with the trade bodies as this affects their business directly. To overcome this, Infosys has taken a few steps. It will be increasing its India capacity to a 95 percent level and reduce the number of L1 and H1-B visas. Infosys also plans to near-source some of the projects by sitting at remote locations, possibly in the same time zone and outsource it to India.

From what I see, extreme offshoring is outsourcing all the bits of a project. How is this different from any offshoring or outsourcing? It looks like the same thing, same term dubbed as a new business model. What might be different is the quantum of offshoring. Why bother with a new terminology.

Anyway, Infosys would increase its revenues and reduce the spending by reducing the number of L1s and H1-Bs. But wouldn’t that make Infosys and other IT services companies less appealing to the Indian job seekers?

Here’s what a Indian job seeker looks for in a new job :

  1. 30-40 percent hike? Check
  2. Big brand name, which can be easily recognized in my village? Check. (Infosys, TCS, Wipro and Satyam qualify. Accenture and Cognizant are gaining popularity in Indian villages)
  3. Automatic promotion or band change after three years? Check
  4. On-site opportunity? Ummm. (Infosys – No. Let’s see what TCS, Wipro and Accenture has to offer)

On-site opportunity has a huge mass appeal. People would leave a high-paying current job for just a promise of on-site opportunity. If Infosys goes for extreme offshoring and if other services companies follow, then the job seekers will look for companies which are not offshoring extremely. If they run out of companies then maybe they would change their checklist.

PS: The current job market in India is very exciting. People typically have more than four job offers and still attend interviews just to see how it goes. Needless to say they come with a lot of attitude.

PPS: For those of you who are still looking for an on-site job, I got a tip – India is the new onsite. Didn’t like it? Never mind.



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