The NY Times got the headline right, “Outsourcing Works, So India Is Exporting Jobs” (registration may be required), unfortunately, they seem to go off track later in the article when they state that, “India is outsourcing outsourcing.”  Statements like this get everyone excited, and feed lots of chatter on blogs, but the statement is not consistent with the information in the story.  Indian companies aren’t “outsourcing.”  They are continuing to expand as truly global multi-national organizations that have the need to locate resources where it makes the most sense.

As with all multi-nationals, there can be many factors that influence the location of staff members, including proximity (both geographical & cultural) to clients, availability of specialized talent and, of course, cost.  The employees of Infosys, Wipro & TCS in the U.S, Mexico, the Philippines, and China are still employees of each company.  To claim otherwise is to suggest that direct employees of GE, who happen to be located in France are somehow outsourced.

The article goes further off the rails when it suggests that something is askew in a situation where, “A company in the United States pays an Indian vendor 7,000 miles away to supply it with Mexican engineers working 150 miles south of the United States border.”  The American bank isn’t just getting the Spanish speaking engineers located in Mexico.  It’s leveraging the processes, global delivery capabilities and (probably) the existing vendor relationship of the Indian company.  If the bank thought that they would get the same level of service & discipline by working more directly with the resources in Mexico, they could have worked with a local vendor, like SoftTek, or any of the smaller outsourcing firms based exclusively in Latin America.

The point is, the Indian companies are executing well, and doing the right things for their businesses and their clients.  Their global expansion is neither ironic, nor unexpected. I don’t understand why this story got so much attention. The leading Chinese outsourcing companies are doing the same thing.  You have to be where your clients are and you have to leverage global resources to be competitive.

Technorati Tags:  China, China Outsourcing