Indian IT companies have reacted sharply to the executive order issued from Ohio. While initially the IT companies have tried to play down the development but the later on the feeling has started sinking in. Ban by one state may not matter much but if other states takes cue from this development and start issuing similar notifications then only the real problem would arise. It’s election year in US and politicians do resort to such moves but what has made this move all the more important is that it has come after the sharp increase in H1-B and L1 categories.

Outsourcing helps in making the US companies competitive as it lowers the cost of operations. Governor of Ohio, Strickland’s executive order issued in this regard is not India-specific butthe development is expected to hurt Indian companies such as Infosys, Wipro, and Patni, who routinely win multi-million dollar state-level government contracts in US. In addition to cost dynamics, outsourcing helps in many ways. It brings about best practices in the operations and improves the productivity.

But at the same time outsourcing takes the jobs away from the country’s soil. While major IT companies have prospered and have grown on account of major outsourcing deals with states, the process has benefited both outsourcer and outsourcee.  Outsourcing is good as it helps in letting the organization focus on its core strength while delegating the sundry tasks to the others who can more efficiently handle it.

Ohio ironically is home to one of the biggest inshoring project taken by an Indian IT company TCS, where it runs 1000-seat deliver centre in Milford, outside Cincinnati.

Outsourcing would stay and people who are opposed to it will realize its importance. But important factor here is to evaluate and formulate the business model first and then actually go about delegating the work.

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