Insourcing? Now There’s a Concept!

Here’s something interesting.  I was just reading a blog article written by a guy named Munjal Shah, the CEO of a company called Riya.  In this article he describes setting up an office in Bangalore, India, in 2002 for a company called Andale, “because,” as Shah explains, “India provided us with a less expensive pool of talent than Silicon Valley did.”

This is the same, very familiar reason given in recent years by countless companies for their need to control costs by outsourcing their IT work to overseas markets.  But guess what.  If Riya serves as any sort of useful barometer of the outsourcing situation, then that tide may be turning.

Here are a few excerpts from Mr. Shah’s article:

Bangalore wages have just been growing like crazy.  To give you an example, there is an employee of ours who took the first 5 years of his career to get from 1% to 10% of his equivalent US counterpart.  He then jumped from 10% to 20% of his US counterpart in the next 1 year.  During his time with us (less than 2 years) he jumped to 55% of the US wage.  In the next few months we would have had to move him to 75% just to “keep him at market.”

[. . .]

However, this huge run up in the wages has destroyed the ROI I referred to earlier.  So today we decided to consolidate all of our engineering and research efforts back to our HQ in California.  We are relocating many of our key folks back to the US, but there are some that we are not bringing back.  Our goal was to keep the payroll costs the same before and after the move. Because wages are still higher in the US we couldn’t bring everyone.

Interesting turn of events, is it not?  It brings to mind the efficient market theories and visions of the ol’ inverse supply and demand curves, establishing market equilibrium, that I had to burn into the grey matter in Economics classes.

Articles such as this one are quite welcome and encouraging to out-of-work IT people in the States, among whom I am one (although I did have what I thought to be a productive interview today; we shall see where it leads).

Still Seeking Employment

If you read my profile then you already know I'm a summa cum laude graduate of a two-year I.T. program at Virginia Western Community College. I'm proud of that 4.0 GPA I earned, because some of those courses were quite challenging, and I worked hard to maintain that rating.

Nevertheless, I'm now in my third month of seeking employment in the Roanoke/Salem/Vinton area in Virginia. I'm finding that I.T. is a tough field to break into. The problem is, I think, that there are only so many companies large enough to even have an I.T. department, and of those, practically all of them have a small, core group of individuals that fulfill the company's needs. And when the rare opening does materialize, likely it goes to someone with some sort of connection; at least it surely seems that way.

Anyway, an old workmate of mine called me today and asked if I would be interested in a small job, replacing a kitchen counter top in a rental house that he owns. I told him I am.

Isn't that rather ironic? After all the expense and effort I put into my college-level I.T. studies, and graduating with a flawless academic record, here I am going back to my old carpentry bailiwick. So tomorrow I will go with him to look at the job and give him a price I hope he can live with.

Here I am, Carilion! Here I am, Norfolk Southern! Here I am, State Farm! Here I am, G.E.! Here I am, Appalachian Power! Here I am, Roanoke City and Roanoke County! Here I am, all you other concerns in the valley who need I.T. people! My resume is out there, and many of you have already been given one directly by me! I can do what you need done, yet here I am pricing counter top replacements and steel-wooling the rust off my saw blades! I'm just waiting for one of you to give me the opportunity to put my computer skills to work! Let's go!