“For years there was pretty much one choice for US firms seeking to move jobs offshore: India,” writes Businessweek (March 19-26, 2012). Outsourcing grew to a $69 billion business there that transformed backwaters such as Chennai and 
This change comes as American corporations increasingly ship higher-level jobs (such as skilled positions in research, accounting, procurement, and financial analysis) offshore. Because these jobs are not the mass-processing functions that are India’s forte, there are greater opportunities for countries such as Argentina, Poland, Brazil, and Guatemala. An Argentinian accountant costs 13% less than one in the US (while an Indian is 51% less), but there are other considerations. “If you’re working with a hedge fund manager where you interact 10-15 times a day, the same time zone is important,” says one CEO.
Brazil now has the most Java programmers in the world and the second most COBOL programmers. Poland’s Gen Y population is highly educated (50% of its 20-24 year olds are in college)–and prolifically multilingual. There are 26 languages spoken at H-P’s Polish center that serves its European, African, and Middle Eastern operations. They perform high-level services including finance, accounting, marketing, and supply chain analysis. Coca-Cola moved its finance and accounting centers in Paris, Brussels, and London to Poland as well. Other centers have been opened there by IBM, Microsoft, and Ernst & Young.
Even Tata Consultancy Services –India’s outsourcing leader (with 2011 sales of $9.8 billion)–has 8,500 employees in South America in an effort to “nearshore” to clients.
Discussion questions:
1. What are some advantages in moving higher-level functions to Eastern Europe and South America?
2. What are India’s outsourcing strengths and weaknesses?