Outsourcing rhetoric has a limit, says Infosys

India's second largest information technology services provider, Infosys, believes businesses in the US, including the government, will continue to favour global sourcing. This despite the increase in anti-outsourcing voices and a ban on it by the Ohio state government.

Infosys, which recently set up a US subsidiary focused on  public services, also said it was too early to talk of the Ohio ban on outsourcing impacting its business. However, it does feel that onsite efforts will go up.

"To cater to the public service, one requires a local subsidiary, which we have set up. But that does not mean offshoring will stop. The percentage of effort in onsite and offshore will be a function of business. The fact remains that global delivery has come to be mainstream for consulting and IT implementation," said B G Srinivas, VP and executive council member, Infosys.

In case of consulting and packaged implementation, Infosys mostly has around 30-35 per cent of people onsite, while business process outsourcing operates with almost 95 per cent offshore.

"Private business houses and the government both favour global sourcing. Simply because they have seen the advantages in terms of scale, quality of talent and what India can offer. More important, it is also at the end of the day about the cost proposition, which they cannot ignore," said Srinivas.

He added that Western multinational firms have leveraged India to be globally competitive. If that is the case, it hardly makes any sense to buck the trend. Infosys, which has about 12,000 people in the US, is also increasing its local hiring. Of this, about 1,300 are locals. "The composition of locals in the US centres for us will go up in the next three to four years. But the solution to this is to build a business model that embraces local hiring at both onsite and near-shore locations," said Srinivas.

The company is also not ruling out training graduates in the US and make them capable of being software engineers. "Infosys has been doing this in India and we have made investment in our Mysore campus. Even India does not have enough engineers, but having a training facility makes us have eligible engineers," he added.

When asked if the anti-outsourcing sentiment in the US will impact its operations in Europe, Srinivas said this will have little to no impact, "European clients have always been more cautious. Besides, when the British Prime Minister had visited the Infosys campus recently, he did say that they will look at outsourcing and he will not overturn the process."

Increasing local hiring has been a focus in the European region, too. The company has 1,000 employees in the Czech Republic and Poland. "These are all local employees and expansion of the Europe centre will depend on how the business grows. We have hired local heads to lead the France and German units and will continue to get locals for the front office role," said Srinivas.