Offshoring: Why India's outsourcers are setting up shop in the West

Recession and changing political climate are boosting nearshoring... keen as ever. Offshore outsourcing is thriving, as evident from companies' hiring patterns in India.

"While the long-term outlook is very strong, there is a clear emergence that clients need options," says Vashishtha.

Indian companies are finding the need to offer choices of operations in low-cost American cities. Tata Consultancy has set up an operation in Cincinnati, Ohio, while US cities such as San Antonio, Texas, Montgomery, Alabama, and Raleigh, North Carolina - where unemployment rates are rising and costs falling - beckon.

"Indian outsourcing companies represent a prime opportunity," says Hamilton of Invest Northern Ireland, who along with Lalani met companies in three Indian cities on this particular trip. Under the circumstances, Indian outsourcers are receptive to the idea of a half-way location.

Bridging distances between operations
For them, it is a way to bridge the distance between the client and the outsourced operation. For the client, it is a way to demonstrate that they are saving jobs.

Already Northern Ireland has attracted marquee outsourcing firms such as HCL Technologies and Firstsource Solutions.

Firstsource's onshore operations in the US employ 3,500 local Americans and are spread over a dozen locations including Louisville, Amherst, Colorado springs, Miami, Rockford, Fort Scott and Belville. The company's onshore operations in the UK employ about 2,000 staff in Belfast and Londonderry with a third centre coming up soon in Middlesbrough.

"We view outsourcing as a global business and our strategy is to offer 'rightsourcing', a combination of onshore, nearshore and offshore," says Matthew Vallance, managing director and CEO of Firstsource.

It is a tricky balancing act for Indian companies, as they recast their model to throw in a mix of offshore, nearshore and onshore.