Manufacturing isn't the only U.S. sector bringing work home. The software development sector is making its way back to American shores and the reason has a lot to do with compliance.
"Already this year, we've signed on four new clients bringing their work back to the U.S. from India, and we're closing on four more," says Milwaukee-based SAP developer Chris Carter of CCI, ranked 174 on the Inc. 500. "The cost saving that companies thought they were going to receive by outsourcing to India is not there. Indian companies don't know how a U.S.-based business running on SAP operates."
One of CCI's new clients, a pharmaceutical company that wished to remain unnamed, found that its India vendor was not Sarbanes-Oxley compliant. "The U.S. has certain components for Sarbanes-Oxley, government mandates, and security guidelines. Every single change to the SAP environment has to be compliant with the FDA, mandated, and documented," explains Carter. The paperwork turned over to CCI by the Indian vendor for work performed consisted of three pages. "This company didn't enter who the last person to work on configuration was, time worked, who authorized the change, or who did the work. We're talking about accounts of up to hundreds of millions of dollars."
A shortage of skilled IT workers in India has resulted in staff turnover of 30 to 40 percent a year, with salary increases of 15 percent a year. Indian IT companies struggle to retain employees in this environment. "Our client had four new project managers in one year," Carter says. "In India's open economy, individuals are going somewhere else for $2 (U.S.) per hour more. Our client received a resume from an individual who had worked for eight companies in two years."
For U.S. companies weary of the language barrier, long learning curve, 12-hour time difference and additional procedural complexity in working with offshore vendors, Carter is here. "And we are beating [India's] price points," he says.