News that IBM is accelerating the exporting of IT jobs to India shouldn't be too much of a surprise. The Economist recently had a very good article about The new geography of the IT industry. The push to cut development costs is leading to this tremendous pressure to more offshore.
My own former employer, i2 Technologies, was founded by an Indian and had a great deal of Indian staff in the U.S. As a result, it felt it was a natual to "lead" the industry in having overseas developers. I wonder if the cost savings will really materialize for these firms.
In reality, software design is an iterative process, and the closer the designer is to the final customer the better. (An important part of extreme programming comes down to having a customer representative in the room to help with development.) Most of the customers for software are in the U.S. or Europe. It would be very difficult for an all Indian (or Chinese) development staff to design the software from that distance. This means you may have a split staff of designers in the U.S. and programmers overseas. Given the benefits from putting everyone in the same room to hash out problems, or being able to have a quick question answered by poking your head in the office down the hall, I think the communication overhead will eliminate any cost savings on labor costs. It is just too hard to do software via conference call.
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