India's New Faces of Outsourcing
Wednesday, January 11, 2006
PUNE, India -- Before he supervised teams, wooed American clients over dinner or sat in a Northern Virginia boardroom alongside U.S. executives, Constancio Fernandes wrote computer code for a living.
That's how it started in the late 1990s -- American businesses ordered up software applications, and Indian programmers such as Fernandes dutifully delivered. But somewhere along the way, Fernandes became more confident and outspoken. He began questioning the Americans and suggesting cheaper, faster ways to run their businesses. They listened.
"Most of the companies in the U.S. used to see Indian companies as sweatshops," said Fernandes, 33, who began as a programmer but is now the director of engineering at Reston-based Approva Corp.'s offices here, supervising product-development teams, tracking projects and improving engineering techniques. "The changes have been phenomenal."
Fernandes represents a generation of Indian workers that is redefining outsourcing from call-center and back-office work into higher-level management and strategy jobs -- areas that Americans workers have often regarded as safe from overseas competition. As they climb higher in the corporate food chain in transnational firms, Indian workers and executives are pushing their U.S. counterparts to take them seriously, taking on greater responsibilities and subtly changing the corporate culture of both countries.
In Pune (pronounced POO-neh or POO-nah), a city on India's west coast, where several Northern Virginia technology firms have established offshore operations over the past decade, the shift has been a welcome one. The unlikely relationship between these two regions, about 8,000 miles apart, underscores how outsourcing has evolved in unexpected ways. In the past, U.S. companies gave the marching orders to workers in India. Now, young Indian developers such as Fernandes and expatriate Indian business leaders are helping India gain a more equal footing.
At least five companies from Northern Virginia -- all run by Indian emigres settled in the Washington area -- have opened offices in Pune, helping turn this once-sleepy holiday getaway into a thriving information-technology hub. Billboards implore residents to buy luxury flats; office space is rented before completion; and lines trail outside restaurants and nightclubs, even on weeknights.
Ironically, during the 1940s, Pune housed key members of India's independence movement, who shunned imports and preached self-sufficiency. Now, U.S. businesses flock to this globalizing city, citing cheaper rents and lower salaries compared with India's other urban centers, such as the tech industry's informal headquarters in Bangalore -- where costs are an estimated 15 percent higher. The city also boasts the University of Pune, which churns out qualified, English-speaking engineering graduates ready to work.
"Nobody wants arts or history anymore," said Gautam Sidharth Singh, 19, a first-year student majoring in electronic engineering. "All of my friends want IT."
Despite the controversy outsourcing has generated in the United States, the practice has boosted business in Northern Virginia, executives said. "I don't think Approva would exist without this model," said Tom Garrity, who is Fernandes's U.S. counterpart as the company's director of engineering in Reston. "We've created 100 jobs in America because of outsourcing."
The staff in Reston works mostly in sales, marketing and management. Meanwhile, Approva employs 120 people in India, a gamut of jobs ranging from software engineers and consultants to managers and technical writers. The company, founded by Indian-born Prashanth V. Boccasam, produces software that helps U.S. companies comply with the 2002 Sarbanes-Oxley Act, aimed at preventing accounting fraud and improving business governance. In this way, the recent spate of corporate scandals in the United States has provided a boost for Indian businesses.
In India, Boccasam found a large pool of employees who could understand both accounting and computer programming -- and for a fraction of the cost in the United States. Top-level software developers can be hired here for about $30,000 annually, a whopping income in India yet just a third of the salary their U.S. colleagues would command.
Beyond the cost advantage, Boccasam values a certain skepticism he finds inherent to Indians.