Outsourcing brought in convenience and flexibility for the IT industry. But now, it could open doors for terrorists to carry out their diabolical designs.
The Andhra Pradesh police see outsourcing of various services such as catering, transportation and housekeeping by the IT companies as the most vulnerable point in their security system.
The police have become more vigilant after the Bangalore Indian Institute of Science incident in which a Delhi professor was gunned down recently.
While tightening the security in and around the Hitec City, the hub of IT operations in the state capital in the aftermath of the Bangalore incident, the police are now advising the representatives of IT companies on the steps they need to take from inside to avert any possible threat in view of outsourcing of non-core and peripheral requirements of day-to-day nature.
According to a senior police official, the outsourcing model adopted by these companies has become worrisome as they could provide easy access to miscreants to their offices and campuses through catering, housekeeping, transportation services, etc. T
The police are urging the companies to verify the antecedents of the companies providing support services and also of the personnel deputed for doing different work, including those of drivers of taxicabs before engaging them.
“They simply go by the ISO certification of a transport firm and engage it for daily transportation of their employees. They are not bothered about the background of the operator or the driver engaged by the firm. This exposes them to a great risk,” the police officer contended.
Without the internal safeguards, the outside security cover provided by the police may prove ineffective due to the sheer size of employees working in several IT firms and odd working hours, the police feel.
At present, the police have set up checkposts on all the access roads to the Hitec City, which houses who’s who of the global IT companies including Microsoft, Infosys, Wipro and TCS.
However, companies, which have offices in other places in the city, may not get the same level of security cover as the Hitec City.
Tuesday, January 17, 2006
Sunday, January 15, 2006
Outsourcing of call centers perturbs some
Pearl Haimowitz would like to boycott companies that outsource their customer service to India.
The Great Neck, N.Y., resident said the representatives are difficult to understand, don’t have the leeway to solve problems, and speak over poor telephone connections.
But Haimowitz, who has dealt with Indian customer service representatives working for Dell, AOL and American Express, said she thinks a boycott would be fruitless if not impossible because so many companies have sent their work abroad, where labor is cheap.
“A couple of years ago, if you talked to an American customer representative, you would find that American Express was always good at taking care of whatever it was you had a problem with,” Haimowitz said. But, she said, Indian customer service representatives “don’t have the latitude, and there is a language barrier, and they’re probably working in the middle of the night.”
While much of the criticism of outsourcing has focused on the loss of jobs in the United States, more people are complaining about poor customer service. A 2004 study of more than 600 customers by Managing Offshore-Call Center magazines found more than 60 percent had trouble understanding accents of service reps abroad, more than 40 percent said the reps couldn’t understand them, either, and half said their problem wasn’t resolved.
But some consumers say it’s possible to communicate, with a little patience. “You just have to keep asking them to repeat themselves as slowly as possible,” said Mark M. Ulrich, 21, a regional service representative at banks who deals with a call center in India to resolve problems with ATM machines. “I always end up getting it. It may take awhile. You just have to say, ‘What? Can you say that slowly?’ and have them spell it out.”
In fact, most customer service representatives abroad speak well enough to handle calls, said Chip Gliedman, who studies customer service as a vice president of Forrester Research in Cambridge, Mass. But some have strong accents that make communication difficult for customers, he said. “It’s a numbers game,” he said. “Just by the sheer number of calls that some of these companies get, there are going to be people that have bad experiences. And just by the sheer number of people who have bad experiences, there are going to be people who have multiple bad experiences.”
Molly Faust, a spokeswoman for American Express, said, “We have operations in dozens of countries and serve millions of customers worldwide. In addition, our customer service representatives have to meet our high customer service standards regardless of where they are located.”
According to an analysis by Giga Research, a subsidiary of Forrester Research, a foreign accent might be a problem in some cases during normal conversations and can become even worse as customers become angry.
Giga’s research also shows that Indian customer service representatives follow help-desk scripts to a fault. U.S. agents are trained to avoid repeating a customer’s questions because the practice annoys Americans, but repeating questions is natural for Indians, the Giga report says.
Gliedman said customer service abroad works well when merely conducting transactions, such as providing information to the consumer. But it doesn’t work well for building relationships.
So Dell returned its call centers for commercial business to the United States in 2003 to ensure it maintained important business relationships, Gliedman said. But the company still maintains call centers abroad, he said.
“There’s less at stake for Dell in the consumer space,” Gliedman said. “Between the buying decision, support and the next buying decision, I don’t think where a call center is located is high on the list of issues.”
The Great Neck, N.Y., resident said the representatives are difficult to understand, don’t have the leeway to solve problems, and speak over poor telephone connections.
But Haimowitz, who has dealt with Indian customer service representatives working for Dell, AOL and American Express, said she thinks a boycott would be fruitless if not impossible because so many companies have sent their work abroad, where labor is cheap.
“A couple of years ago, if you talked to an American customer representative, you would find that American Express was always good at taking care of whatever it was you had a problem with,” Haimowitz said. But, she said, Indian customer service representatives “don’t have the latitude, and there is a language barrier, and they’re probably working in the middle of the night.”
While much of the criticism of outsourcing has focused on the loss of jobs in the United States, more people are complaining about poor customer service. A 2004 study of more than 600 customers by Managing Offshore-Call Center magazines found more than 60 percent had trouble understanding accents of service reps abroad, more than 40 percent said the reps couldn’t understand them, either, and half said their problem wasn’t resolved.
But some consumers say it’s possible to communicate, with a little patience. “You just have to keep asking them to repeat themselves as slowly as possible,” said Mark M. Ulrich, 21, a regional service representative at banks who deals with a call center in India to resolve problems with ATM machines. “I always end up getting it. It may take awhile. You just have to say, ‘What? Can you say that slowly?’ and have them spell it out.”
In fact, most customer service representatives abroad speak well enough to handle calls, said Chip Gliedman, who studies customer service as a vice president of Forrester Research in Cambridge, Mass. But some have strong accents that make communication difficult for customers, he said. “It’s a numbers game,” he said. “Just by the sheer number of calls that some of these companies get, there are going to be people that have bad experiences. And just by the sheer number of people who have bad experiences, there are going to be people who have multiple bad experiences.”
Molly Faust, a spokeswoman for American Express, said, “We have operations in dozens of countries and serve millions of customers worldwide. In addition, our customer service representatives have to meet our high customer service standards regardless of where they are located.”
According to an analysis by Giga Research, a subsidiary of Forrester Research, a foreign accent might be a problem in some cases during normal conversations and can become even worse as customers become angry.
Giga’s research also shows that Indian customer service representatives follow help-desk scripts to a fault. U.S. agents are trained to avoid repeating a customer’s questions because the practice annoys Americans, but repeating questions is natural for Indians, the Giga report says.
Gliedman said customer service abroad works well when merely conducting transactions, such as providing information to the consumer. But it doesn’t work well for building relationships.
So Dell returned its call centers for commercial business to the United States in 2003 to ensure it maintained important business relationships, Gliedman said. But the company still maintains call centers abroad, he said.
“There’s less at stake for Dell in the consumer space,” Gliedman said. “Between the buying decision, support and the next buying decision, I don’t think where a call center is located is high on the list of issues.”
Senator calls outsourcing a fact of life
Sen. Max Baucus, the top Democrat on the U.S. Senate Finance Committee, said last week that outsourcing white-collar jobs to low-wage countries such as India has become a global fact of life -- and that the United States must learn to live with it.
The senator from Montana also called on India to further open its once-tightly closed economy, especially in the agricultural and retail industries, to competition from U.S. companies.
Baucus said a majority of fellow Senate Democrats agreed with him, despite the party's longtime opposition to American companies moving jobs overseas.
``Everybody is concerned about job losses and so am I,'' he told the Associated Press in an interview Friday in Bangalore, his first stop on a five-day tour of India.
``But the world is flat and we must work harder to better retrain our people,'' rather than resist outsourcing, he said. ``Offshoring is a fact of globalization. Opportunities for U.S. companies come from everywhere -- including India.''
In a written statement released later Friday, Baucus said the intent of his trip was to ``try to get at the problem of outsourcing'' and find ways to keep more of the jobs in the United States.
``Any job lost to outsourcing is too many,'' he said. ``But we can't kid ourselves or stick our heads in the sand. . . . Our challenge is to learn why these jobs are moving overseas and work to keep them at home by boosting America's competitiveness through such things as training, education and tax incentives.''
The senator from Montana also called on India to further open its once-tightly closed economy, especially in the agricultural and retail industries, to competition from U.S. companies.
Baucus said a majority of fellow Senate Democrats agreed with him, despite the party's longtime opposition to American companies moving jobs overseas.
``Everybody is concerned about job losses and so am I,'' he told the Associated Press in an interview Friday in Bangalore, his first stop on a five-day tour of India.
``But the world is flat and we must work harder to better retrain our people,'' rather than resist outsourcing, he said. ``Offshoring is a fact of globalization. Opportunities for U.S. companies come from everywhere -- including India.''
In a written statement released later Friday, Baucus said the intent of his trip was to ``try to get at the problem of outsourcing'' and find ways to keep more of the jobs in the United States.
``Any job lost to outsourcing is too many,'' he said. ``But we can't kid ourselves or stick our heads in the sand. . . . Our challenge is to learn why these jobs are moving overseas and work to keep them at home by boosting America's competitiveness through such things as training, education and tax incentives.''
Saturday, January 14, 2006
US outsourcing to touch $17 bn
nformation technology outsourcing by the US government will increase at an annual growth rate of nearly eight per cent and touch $17.6 billion by fiscal 2010, according to a market research firm.
This increase in federal IT outsourcing, from the $12.2 billion spent in fiscal 2005, will be registered with the help of specific drivers like the Office Of Management (OMB) and budget's "Lines Of Business" (LOB) initiatives for HR and finance management, Federal Health Architecture, IT security and other processes, says research firm, Input.
For agencies that are deemed unable to handle these process overhauls, there will be opportunities for shared services providers to step in and takeover certain duties, the Reston-based Input states.
"A number of factors have combined to make outsourcing one of the fastest growing federal market segments over the past several years," said Chris Campbell, an Input analyst.
"In a time of war, a deficit, and tightening federal budgets, Input expects the federal IT outsourcing to remain one of the healthiest federal markets.
The LOBs, which include HR management, financial management, grants management, case management, federal health architecture, and IT security, will require agencies to continue spending on outsourcing.
For each LOB, government agencies will submit their business cases to the centers of excellence - those agencies deemed specifically qualified to perform lob services.
"As a result, agencies will focus on transitioning major programmes out of their agency to a shared service provider," Campbell says
This increase in federal IT outsourcing, from the $12.2 billion spent in fiscal 2005, will be registered with the help of specific drivers like the Office Of Management (OMB) and budget's "Lines Of Business" (LOB) initiatives for HR and finance management, Federal Health Architecture, IT security and other processes, says research firm, Input.
For agencies that are deemed unable to handle these process overhauls, there will be opportunities for shared services providers to step in and takeover certain duties, the Reston-based Input states.
"A number of factors have combined to make outsourcing one of the fastest growing federal market segments over the past several years," said Chris Campbell, an Input analyst.
"In a time of war, a deficit, and tightening federal budgets, Input expects the federal IT outsourcing to remain one of the healthiest federal markets.
The LOBs, which include HR management, financial management, grants management, case management, federal health architecture, and IT security, will require agencies to continue spending on outsourcing.
For each LOB, government agencies will submit their business cases to the centers of excellence - those agencies deemed specifically qualified to perform lob services.
"As a result, agencies will focus on transitioning major programmes out of their agency to a shared service provider," Campbell says
Friday, January 13, 2006
Kerry says his views on outsourcing misinterpreted
Visiting US senator and Democratic candidate for the 2005 American Presidential elections, John Kerry, today said that his views on outsourcing were misinterpreted.
Stating that every company has a right to chose its own course, the senator, however, faulted those American companies that made decisions in favour of business process outsourcing purely on non-economic considerations.
“We had problem with some people who made their choices purely for the purpose of taking advantage of tax benefits,” Kerry told mediapersons here after his meeting with chief minister Y S Rajasekhara Reddy. He said that he had no problem with outsourcing based on economic considerations.
Referring to his campaign on the issue of outsourcing during the presidential elections, he said that it was an issue of loss of jobs, loss of healthcare, loss of pension benefits and about not providing alternatives to those who lost their jobs. Kerry said that he only wanted the companies to be better corporate citizens of his country.
Replying to a question on the significance of his visit to Hyderabad, he said the city was going through an economic transformation in terms of business, and outsourcing among other things.
“I thought it important to visit the place to know firsthand and understand what is happening and what the challenges are,” he said. He also said that both US and India came together to work for the mutual advantage and to the comfort of all of our workers.
The issues relating to transport, infrastructure, AIDS awareness, environment, and the outside challenges from China among others came up for discussion during his meeting with the chief minister, he said.
He complimented India for its contribution to globalisation on several fronts. Later, he also met the leader of the opposition and former chief minister N Chandrababu Naidu.
Stating that every company has a right to chose its own course, the senator, however, faulted those American companies that made decisions in favour of business process outsourcing purely on non-economic considerations.
“We had problem with some people who made their choices purely for the purpose of taking advantage of tax benefits,” Kerry told mediapersons here after his meeting with chief minister Y S Rajasekhara Reddy. He said that he had no problem with outsourcing based on economic considerations.
Referring to his campaign on the issue of outsourcing during the presidential elections, he said that it was an issue of loss of jobs, loss of healthcare, loss of pension benefits and about not providing alternatives to those who lost their jobs. Kerry said that he only wanted the companies to be better corporate citizens of his country.
Replying to a question on the significance of his visit to Hyderabad, he said the city was going through an economic transformation in terms of business, and outsourcing among other things.
“I thought it important to visit the place to know firsthand and understand what is happening and what the challenges are,” he said. He also said that both US and India came together to work for the mutual advantage and to the comfort of all of our workers.
The issues relating to transport, infrastructure, AIDS awareness, environment, and the outside challenges from China among others came up for discussion during his meeting with the chief minister, he said.
He complimented India for its contribution to globalisation on several fronts. Later, he also met the leader of the opposition and former chief minister N Chandrababu Naidu.
Wednesday, January 11, 2006
Report: 2005 A Record Year For Outsourcing
Workers loathe it, politicians rail against it, and one TV newsman vilifies it almost nightly. Despite it all, companies are outsourcing work at record levels, according to new data released Wednesday.
The number of outsourcing contracts--through which businesses hand off routine IT and back-office work to a third party, often operating from a low-wage foreign country--increased 9% in 2005 to 293. It's the most deals seen in a single year, according to consulting firm Technology Partners International, which published the data.
But while the number of deals is up, businesses are actually spending less on outsourcing. That's because an increasing amount of the work is performed in India or other places where labor is cheap. Indian service providers grabbed 6% of all outsourcing contracts worth more than $50 million in 2005, compared with 2% the previous year, TPI reports.
Meanwhile, big U.S. outsourcers like IBM and EDS are opening their own facilities offshore to stay competitive. Also driving down contract values is the growing tendency among businesses to parcel out work in smaller chunks and for a shorter duration. The total value of contracts let in 2005 dropped 5% to $75 billion, says TPI.
Outsourcing is controversial because critics say American workers pay the price for businesses' desire to use labor in countries with questionable employment practices. Democratic presidential challenger John Kerry famously called executives who outsource "Benedict Arnold CEOs." CNN anchor Lou Dobbs often devotes entire programs to the issue under the banner "Exporting America." To date, however, most legislative efforts aimed at curtailing offshore outsourcing have failed to pass Congress or state legislatures.
Not all work that's outsourced is bound for foreign shores. The vast majority is still performed domestically, despite popular perceptions. In fact, outsourcers are beefing up their workforces in the United States. According to the Labor Department, payrolls among IT services firms grew by nearly 32,000 workers in 2005, a 2.7% gain for the year.
The number of outsourcing contracts--through which businesses hand off routine IT and back-office work to a third party, often operating from a low-wage foreign country--increased 9% in 2005 to 293. It's the most deals seen in a single year, according to consulting firm Technology Partners International, which published the data.
But while the number of deals is up, businesses are actually spending less on outsourcing. That's because an increasing amount of the work is performed in India or other places where labor is cheap. Indian service providers grabbed 6% of all outsourcing contracts worth more than $50 million in 2005, compared with 2% the previous year, TPI reports.
Meanwhile, big U.S. outsourcers like IBM and EDS are opening their own facilities offshore to stay competitive. Also driving down contract values is the growing tendency among businesses to parcel out work in smaller chunks and for a shorter duration. The total value of contracts let in 2005 dropped 5% to $75 billion, says TPI.
Outsourcing is controversial because critics say American workers pay the price for businesses' desire to use labor in countries with questionable employment practices. Democratic presidential challenger John Kerry famously called executives who outsource "Benedict Arnold CEOs." CNN anchor Lou Dobbs often devotes entire programs to the issue under the banner "Exporting America." To date, however, most legislative efforts aimed at curtailing offshore outsourcing have failed to pass Congress or state legislatures.
Not all work that's outsourced is bound for foreign shores. The vast majority is still performed domestically, despite popular perceptions. In fact, outsourcers are beefing up their workforces in the United States. According to the Labor Department, payrolls among IT services firms grew by nearly 32,000 workers in 2005, a 2.7% gain for the year.
Tuesday, January 10, 2006
India's New Faces of Outsourcing
Before he supervised teams, wooed American clients over dinner or sat in a Northern Virginia boardroom alongside U.S. executives, Constancio Fernandes wrote computer code for a living.
That's how it started in the late 1990s -- American businesses ordered up software applications, and Indian programmers such as Fernandes dutifully delivered. But somewhere along the way, Fernandes became more confident and outspoken. He began questioning the Americans and suggesting cheaper, faster ways to run their businesses. They listened.
"Most of the companies in the U.S. used to see Indian companies as sweatshops," said Fernandes, 33, who began as a programmer but is now the director of engineering at Reston-based Approva Corp.'s offices here, supervising product-development teams, tracking projects and improving engineering techniques. "The changes have been phenomenal."
Fernandes represents a generation of Indian workers that is redefining outsourcing from call-center and back-office work into higher-level management and strategy jobs -- areas that Americans workers have often regarded as safe from overseas competition. As they climb higher in the corporate food chain in transnational firms, Indian workers and executives are pushing their U.S. counterparts to take them seriously, taking on greater responsibilities and subtly changing the corporate culture of both countries.
In Pune (pronounced POO-neh or POO-nah), a city on India's west coast, where several Northern Virginia technology firms have established offshore operations over the past decade, the shift has been a welcome one. The unlikely relationship between these two regions, about 8,000 miles apart, underscores how outsourcing has evolved in unexpected ways. In the past, U.S. companies gave the marching orders to workers in India. Now, young Indian developers such as Fernandes and expatriate Indian business leaders are helping India gain a more equal footing.
At least five companies from Northern Virginia -- all run by Indian emigres settled in the Washington area -- have opened offices in Pune, helping turn this once-sleepy holiday getaway into a thriving information-technology hub. Billboards implore residents to buy luxury flats; office space is rented before completion; and lines trail outside restaurants and nightclubs, even on weeknights.
Ironically, during the 1940s, Pune housed key members of India's independence movement, who shunned imports and preached self-sufficiency. Now, U.S. businesses flock to this globalizing city, citing cheaper rents and lower salaries compared with India's other urban centers, such as the tech industry's informal headquarters in Bangalore -- where costs are an estimated 15 percent higher. The city also boasts the University of Pune, which churns out qualified, English-speaking engineering graduates ready to work.
"Nobody wants arts or history anymore," said Gautam Sidharth Singh, 19, a first-year student majoring in electronic engineering. "All of my friends want IT."
Despite the controversy outsourcing has generated in the United States, the practice has boosted business in Northern Virginia, executives said. "I don't think Approva would exist without this model," said Tom Garrity, who is Fernandes's U.S. counterpart as the company's director of engineering in Reston. "We've created 100 jobs in America because of outsourcing."
The staff in Reston works mostly in sales, marketing and management. Meanwhile, Approva employs 120 people in India, a gamut of jobs ranging from software engineers and consultants to managers and technical writers. The company, founded by Indian-born Prashanth V. Boccasam, produces software that helps U.S. companies comply with the 2002 Sarbanes-Oxley Act, aimed at preventing accounting fraud and improving business governance. In this way, the recent spate of corporate scandals in the United States has provided a boost for Indian businesses.
In India, Boccasam found a large pool of employees who could understand both accounting and computer programming -- and for a fraction of the cost in the United States. Top-level software developers can be hired here for about $30,000 annually, a whopping income in India yet just a third of the salary their U.S. colleagues would command.
Beyond the cost advantage, Boccasam values a certain skepticism he finds inherent to Indians.
"It doesn't matter if you are buying vegetables or dining at a five-star hotel -- you will always count your change," said Boccasam, who attended the University of Pune and immigrated to the United States in 1988. "That's an auditing function. The guys in India know every scam there is out there."
Even Approva's office decor highlights this quality. A picture on the wall displayed an elderly businessman flanked by two scantily clad women in a casino. "Noticed the 'consulting' invoices Pete's been approving?" it asks. "We will."
Approva marks Boccasam's second U.S. company with an office in Pune. In 1995, he and a college friend, Amir Hudda, founded Arlington-based Entevo Corp. and opened a development center in Pune, relying on contacts made in their university days. The company was eventually sold off. Hudda's latest venture, Herndon-based Apptix Inc., opened its Pune office in September -- just two floors down from another Reston-based company, IMC Inc., which opened an office here in 1995.
Some residents fear that Pune's boom is undermining the city's charm and tourist appeal. They say traffic has worsened, prices are rising and infrastructure cannot keep pace with growth. Like so much of an India in transition, Pune is feeling the push and pull between tradition and modernity.
The struggle is familiar to business leaders who divide their time -- and identity -- in different places. The immigrants running these Northern Virginia tech firms serve a unique role as they straddle two lands and two cultures.
Prakash Gupta, president of IMC Global Services Ltd., the Indian subsidiary, travels frequently between Reston and Pune. On a recent morning, as he entered the area at the Pune facility where dozens of developers code and execute projects for U.S. customers, several employees tried to stand as a sign of respect -- as Indians reflexively do in the presence of bosses, teachers or the elderly. Gupta waved them down, reminding them to call him "Prakash," not "sir," as their British-inspired education might have taught.
IMC employees, mostly in their 20s, tend to socialize together outside work. The mix of university students and a young workforce -- and the malls, nightclubs and restaurants catering to them -- gives Pune the feel of Boston or Austin, cities also transformed by technology companies.
Tech firms here have created office parks that would not look out of place in Tysons Corner or Reston, but even in office decor, they strive to bridge the gap between the two cultures. Gupta recalls how the original color scheme for IMC's new offices in Pune was so loud -- even more than so than in the Silicon Valley dot-com boom of the late 1990s -- that he intervened to tone it down. "In the U.S., most of our offices are conservative: white walls, blue carpets," he said. "In India, offices have oranges and pinks and yellows. I was trying to balance the two cultures." Even with Gupta's modifications, IMC still bursts into bright blues and yellows and oranges, from ceiling to floor.
Not long ago, U.S. companies hesitated to allow their Indian computer programmers to deal directly with American customers, citing the need to retain control. Eventually, however, Indian workers convinced their bosses that it saved time and money if they worked directly with clients. IMC, for example, now relies on employees such as 32-year-old Manjiri Joshi to discuss projects with customers. She has traveled to the United Kingdom and United States several times and continues to deal with customers from her office in Pune.
And in years past, Approva's Boccasam noted, Indian workers used to be shy about requesting their holidays off, even while rushing to meet special deadlines for American supervisors before Christmas or Memorial Day. Now, he said, Indian developers are becoming more assertive, at times demanding that their U.S. colleagues meet their deadlines so the Indians can make it back home for Diwali, the Hindu festival of lights, or Eid, marking the end of Muslims' fast during Ramadan.
"I feel like the guys and gals out there have a new spring in their feet. They are very confident in their own skin and in how they deal with cross-cultural issues," Boccasam observed.
Such interactions have changed the Americans, too. Some U.S. executives say it took time to adjust to Indian accents and made-up Indian-English words such as "updation" (the noun form of "update").
And while in the past, Indians often worked overnight to accommodate the U.S. workday -- and that is still the norm in the burgeoning call-center industry -- several U.S. Approva executives now reach their Reston offices by 7 a.m. so they can catch the Indian employees at the end of their workday.
"Five years ago, I would have told you we're the head and they're the factory," said Silas Matteson, Approva's vice president for products in Reston. "That's changed."
Much of his day is spent fielding technical queries from clients and senior managers. And the technology experts are in India; not a single software developer works in Reston.
"You need to be able to manage teams in India or Chicago now," said Approva's Garrity. A foreign adapter rests on his shelf in Reston, needed to charge his laptop when he travels to India.
To be sure, this business model business poses challenges. "We're not together, obviously," Garrity said. "Sometimes, you just want to walk down the hall and talk to someone."
A team of Approva's Reston-based executives is in Pune now to implement the goals outlined recently at a brainstorming retreat at the Sheraton Reston Hotel. While the Reston meeting marked the first time Approva flew in Indian staff to Northern Virginia for the end-of-year retreat, the current gathering is the first time a planning session is being held in India.
"The center of gravity doesn't have to be the U.S.," Boccasam said.
That's how it started in the late 1990s -- American businesses ordered up software applications, and Indian programmers such as Fernandes dutifully delivered. But somewhere along the way, Fernandes became more confident and outspoken. He began questioning the Americans and suggesting cheaper, faster ways to run their businesses. They listened.
"Most of the companies in the U.S. used to see Indian companies as sweatshops," said Fernandes, 33, who began as a programmer but is now the director of engineering at Reston-based Approva Corp.'s offices here, supervising product-development teams, tracking projects and improving engineering techniques. "The changes have been phenomenal."
Fernandes represents a generation of Indian workers that is redefining outsourcing from call-center and back-office work into higher-level management and strategy jobs -- areas that Americans workers have often regarded as safe from overseas competition. As they climb higher in the corporate food chain in transnational firms, Indian workers and executives are pushing their U.S. counterparts to take them seriously, taking on greater responsibilities and subtly changing the corporate culture of both countries.
In Pune (pronounced POO-neh or POO-nah), a city on India's west coast, where several Northern Virginia technology firms have established offshore operations over the past decade, the shift has been a welcome one. The unlikely relationship between these two regions, about 8,000 miles apart, underscores how outsourcing has evolved in unexpected ways. In the past, U.S. companies gave the marching orders to workers in India. Now, young Indian developers such as Fernandes and expatriate Indian business leaders are helping India gain a more equal footing.
At least five companies from Northern Virginia -- all run by Indian emigres settled in the Washington area -- have opened offices in Pune, helping turn this once-sleepy holiday getaway into a thriving information-technology hub. Billboards implore residents to buy luxury flats; office space is rented before completion; and lines trail outside restaurants and nightclubs, even on weeknights.
Ironically, during the 1940s, Pune housed key members of India's independence movement, who shunned imports and preached self-sufficiency. Now, U.S. businesses flock to this globalizing city, citing cheaper rents and lower salaries compared with India's other urban centers, such as the tech industry's informal headquarters in Bangalore -- where costs are an estimated 15 percent higher. The city also boasts the University of Pune, which churns out qualified, English-speaking engineering graduates ready to work.
"Nobody wants arts or history anymore," said Gautam Sidharth Singh, 19, a first-year student majoring in electronic engineering. "All of my friends want IT."
Despite the controversy outsourcing has generated in the United States, the practice has boosted business in Northern Virginia, executives said. "I don't think Approva would exist without this model," said Tom Garrity, who is Fernandes's U.S. counterpart as the company's director of engineering in Reston. "We've created 100 jobs in America because of outsourcing."
The staff in Reston works mostly in sales, marketing and management. Meanwhile, Approva employs 120 people in India, a gamut of jobs ranging from software engineers and consultants to managers and technical writers. The company, founded by Indian-born Prashanth V. Boccasam, produces software that helps U.S. companies comply with the 2002 Sarbanes-Oxley Act, aimed at preventing accounting fraud and improving business governance. In this way, the recent spate of corporate scandals in the United States has provided a boost for Indian businesses.
In India, Boccasam found a large pool of employees who could understand both accounting and computer programming -- and for a fraction of the cost in the United States. Top-level software developers can be hired here for about $30,000 annually, a whopping income in India yet just a third of the salary their U.S. colleagues would command.
Beyond the cost advantage, Boccasam values a certain skepticism he finds inherent to Indians.
"It doesn't matter if you are buying vegetables or dining at a five-star hotel -- you will always count your change," said Boccasam, who attended the University of Pune and immigrated to the United States in 1988. "That's an auditing function. The guys in India know every scam there is out there."
Even Approva's office decor highlights this quality. A picture on the wall displayed an elderly businessman flanked by two scantily clad women in a casino. "Noticed the 'consulting' invoices Pete's been approving?" it asks. "We will."
Approva marks Boccasam's second U.S. company with an office in Pune. In 1995, he and a college friend, Amir Hudda, founded Arlington-based Entevo Corp. and opened a development center in Pune, relying on contacts made in their university days. The company was eventually sold off. Hudda's latest venture, Herndon-based Apptix Inc., opened its Pune office in September -- just two floors down from another Reston-based company, IMC Inc., which opened an office here in 1995.
Some residents fear that Pune's boom is undermining the city's charm and tourist appeal. They say traffic has worsened, prices are rising and infrastructure cannot keep pace with growth. Like so much of an India in transition, Pune is feeling the push and pull between tradition and modernity.
The struggle is familiar to business leaders who divide their time -- and identity -- in different places. The immigrants running these Northern Virginia tech firms serve a unique role as they straddle two lands and two cultures.
Prakash Gupta, president of IMC Global Services Ltd., the Indian subsidiary, travels frequently between Reston and Pune. On a recent morning, as he entered the area at the Pune facility where dozens of developers code and execute projects for U.S. customers, several employees tried to stand as a sign of respect -- as Indians reflexively do in the presence of bosses, teachers or the elderly. Gupta waved them down, reminding them to call him "Prakash," not "sir," as their British-inspired education might have taught.
IMC employees, mostly in their 20s, tend to socialize together outside work. The mix of university students and a young workforce -- and the malls, nightclubs and restaurants catering to them -- gives Pune the feel of Boston or Austin, cities also transformed by technology companies.
Tech firms here have created office parks that would not look out of place in Tysons Corner or Reston, but even in office decor, they strive to bridge the gap between the two cultures. Gupta recalls how the original color scheme for IMC's new offices in Pune was so loud -- even more than so than in the Silicon Valley dot-com boom of the late 1990s -- that he intervened to tone it down. "In the U.S., most of our offices are conservative: white walls, blue carpets," he said. "In India, offices have oranges and pinks and yellows. I was trying to balance the two cultures." Even with Gupta's modifications, IMC still bursts into bright blues and yellows and oranges, from ceiling to floor.
Not long ago, U.S. companies hesitated to allow their Indian computer programmers to deal directly with American customers, citing the need to retain control. Eventually, however, Indian workers convinced their bosses that it saved time and money if they worked directly with clients. IMC, for example, now relies on employees such as 32-year-old Manjiri Joshi to discuss projects with customers. She has traveled to the United Kingdom and United States several times and continues to deal with customers from her office in Pune.
And in years past, Approva's Boccasam noted, Indian workers used to be shy about requesting their holidays off, even while rushing to meet special deadlines for American supervisors before Christmas or Memorial Day. Now, he said, Indian developers are becoming more assertive, at times demanding that their U.S. colleagues meet their deadlines so the Indians can make it back home for Diwali, the Hindu festival of lights, or Eid, marking the end of Muslims' fast during Ramadan.
"I feel like the guys and gals out there have a new spring in their feet. They are very confident in their own skin and in how they deal with cross-cultural issues," Boccasam observed.
Such interactions have changed the Americans, too. Some U.S. executives say it took time to adjust to Indian accents and made-up Indian-English words such as "updation" (the noun form of "update").
And while in the past, Indians often worked overnight to accommodate the U.S. workday -- and that is still the norm in the burgeoning call-center industry -- several U.S. Approva executives now reach their Reston offices by 7 a.m. so they can catch the Indian employees at the end of their workday.
"Five years ago, I would have told you we're the head and they're the factory," said Silas Matteson, Approva's vice president for products in Reston. "That's changed."
Much of his day is spent fielding technical queries from clients and senior managers. And the technology experts are in India; not a single software developer works in Reston.
"You need to be able to manage teams in India or Chicago now," said Approva's Garrity. A foreign adapter rests on his shelf in Reston, needed to charge his laptop when he travels to India.
To be sure, this business model business poses challenges. "We're not together, obviously," Garrity said. "Sometimes, you just want to walk down the hall and talk to someone."
A team of Approva's Reston-based executives is in Pune now to implement the goals outlined recently at a brainstorming retreat at the Sheraton Reston Hotel. While the Reston meeting marked the first time Approva flew in Indian staff to Northern Virginia for the end-of-year retreat, the current gathering is the first time a planning session is being held in India.
"The center of gravity doesn't have to be the U.S.," Boccasam said.
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