By Dinesh C Sharma, 27 November 2003 08:30
NEWS Citing the need to protect local businesses, the US state of Indiana has terminated a software contract it had awarded to an Indian company - a move indicative of growing opposition to offshore outsourcing.
The cancellation is part of a new initiative, dubbed 'Opportunity Indiana', to review the state's procurement process. Governor Joseph Kernan announced the programme last week. Its objective is to offer greater opportunities to local companies.
TCS America, a subsidiary of India's top-ranking software and services company, Tata Consultancy Services, was selected to upgrade the unemployment insurance computer system of the Indiana Department of Workforce Development earlier this year. TCS has won several contracts in the US and Europe, with most of its annual revenue of $1bn coming from North America.
A TCS representative said calling off the deal "was a decision for the state of Indiana to make, and TCS plans to abide by it".
Outsourcing to offshore companies, particularly to Indian companies, has raised the hackles of local groups that fear job cuts. A number of US corporations have stationed their technical support facilities in Indian cities.
Earlier this week, Dell announced that it was diverting calls for tech support from its call centre in India to its centres in the United States, after customers complained.
"The difficulty we had with this contract was not with the company itself," Governor Kernan said in a statement. "After having a chance to discuss our vision of how the state should do business, and how we can provide better opportunities to Indiana companies and workers, we concluded that this contract did not fit in that framework. The procedures we had in place virtually knocked Indiana companies out of the running."
Dinesh C Sharma writes for CNET News.com.
Comments
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1. anonymous
Hi, It is interesting to see how management in private industry works.Industrial relations with their work force seems to disintigrate when it comes to profit making, especially in the short term.I praise the state of Indiana in the good old U.S.A. for it's courage to say no to farming out I.T.Jobs to India,just because it's cheaper.One of my questions is,and you must excuse my ignorance,but can someone tell me how successful it has been in farming out its' resources to India in this instance? Has anyone questioned whether this a long term strategy or in the not to distant future like korea and some of the other asian countries. It will become a failure as workers are now asking for as much in salaries as their American and European counter-parts.
2. anonymous
That's a bit much coming from the champion of free trade. Smacks of double standards.
Grrrrhhhh!!!!
3. anonymous
Write to the governor and thank him.
I just did via his website.