Saturday, August 21, 2010

Rhetoric vs reality: Global body shops, chop shops and sweat shops

A week after U.S. legislator Charles Schumer called Infosys a “chop shop,” setting off a wave of outrage in India, he clarified that he meant that firms like Infosys are “body shops.” Senator Schumer clarified In the tech industry, these firms are sometimes known as ‘body shops’ and that’s what I should have said.” Having spent much of my working life in the technology services industry across the globe, such statements by politicians don’t really surprise me, but the media in India and America seems to have had its share of fun ‘analyzing the stories. Another related story was that of the hike in fee for US Work Visa (H1 visas). This again lead to interviews with industry gurus who had views and counter views on the impact of the hike. Visas and travel are an integral cost of doing business for offshoring firms. Such cost do go up over a period of time. Again me thinks: So what's the big deal?

In all the rhetoric, the politicians and analysts quoted in the media seem to have forgotten a basic fact: While Indian service firms Infosys, TCS and Wipro pioneered Global Delivery model and offshoring, it is the western and American software service giants including IBM, Accenture, HP and others that have taken to it like ducks to water. I guess most poeple outside the software services industry didn’t realize IBM was among the top public sector employers in India, employing over a hundred thousand people (WSJ: Is Big Blue India’s New Big Boss?)

With Big Blue is getting bigger in India should Senator Schumer go after them too and include IBM in his next speech as a chop shop, body shop, or sweat shop?!

Fact is that the software Services industry, whether co-located in a geography continues to be labor intensive. Automation of software development continues to be the holy grail of Software Engineering though better tools and techniques continue to emerge. Software development and maintenance requires an army of programmers, developers, analysts and managers.

Politics and rhetoric aside, software services industry is more globalized than most analysts and journalists realize. For those of us in the industry however, this is not much of a surprise. Case in point, James McGovern, an Enterprise Architect with a Fortune 500 Insurance firm used to be a rabid outsourcing critic. In the past few blog posts, one can see a much more pragmatic voice on offshoring emerging. (Re: The Secret Relationship between Enterprise Architecture and Outsourcing)

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