Small Town America Is Offshore Alternative for Some Companies

Ann All

It remains to be seen how Indian outsourcing firms will deal with a convergence of market forces that experts say could make the country a less popular offshore destination. But folks appear to be keen to explore alternatives. (China, Romania, Mexico and Poland were among the candidates mentioned in comments to my previous post on India.)


Add to that list Corsicana, Texas, and Helena, Mont., two cities where Northrop Grumman is recruiting IT specialists and software engineers, reports the Los Angeles Times.


The company gets "very high quality and a dedicated workforce," says a Northrop Grumman executive -- and at costs 40 percent less than the going market rate in L.A., about the same amount it would expect to save if it shipped such work offshore. Northrop Grumman plans to establish 50 similar small-town software development facilities around the U.S.


Such facilities benefit not only Northrop Grumman, but the communities in which they are located. Like many small Texas towns, Corsicana enjoyed a boom until its oil supplies dried up -- after which a quarter of its population fell below the poverty line. But now, thanks to Northrop Grumman, developers are considering building 200 homes there and it has earned the attention of other high-tech firms. The story also mentions several natives of the area who were eager to move back after facing lengthy commutes and higher costs of living in Dallas.


Other U.S. companies that are establishing at least some IT operations in small American cities include Accenture, software developer Xpanxion and Dell. While Accenture is also adding employees in India, bringing its workforce there to 35,000, an executive quoted in the L.A. Times story says there is "tremendous demand among Accenture clients for outsourcing services performed by professionals within the U.S."


Indeed, Indian companies like Wipro and Tata Consultancy Services are finding the same thing -- and are boosting their hiring of Americans to help satisfy the demand. Wipro will employ some 1,000 U.S. workers at a software development center in metro Atlanta, which will likely serve big clients Delta Air Lines, BellSouth (recently acquired by AT&T) and the Coca-Cola Co.

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Add Comment      Leave a comment on this blog post
Oct 29, 2007 7:04 PM Jay Jay  says:
My company is considering some offshoring to India. The data here don't make it clear that small-town America is a cost-competitive option except when compared to L.A.. Accenture and Wipro are reportedly answering to customer demand, which may be driven as much by politics as by cost-consciousness.However, it's good both at the micro and the macro levels to see that a free market global economy behaves the same as a national free market economy -- leveling the playing field for all.Thanks for the post, Ann. Reply
Oct 30, 2007 8:04 AM Jazz Jazz  says:
I've always stated to my work colleagues that large companies were overlooking the opportunity for savings in small town America. It keeps the skilled jobs here at home and provides a good economic base for growing these small communities. When will our executive leaders all wake-up and see what their doing by sending work overseas instead of investing and growing American skills and economic stability and advancement. Reply

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