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The new economics of outsourcing

April 23, 2008

Kimberly-Clark was drawn by the available talent and the fact that the company has Argentine operations but also because geographical proximity and similar time zones make collaboration easier.

"We picked Buenos Aires for a number of reasons, but we really felt from supporting SAP, it was the right place to be," says Kimberly-Clark Chief Information Officer Ramon Baez. The company also outsources application development and maintenance to Cognizant in Chennai, India.

How much longer the world's companies will have financial incentive to outsource to India is a matter of lively debate.

India's "advantage as an offshore location is fast eroding-its attractiveness takes a hit with each passing day," analysts at Forrester Research wrote in a January, 2008, report.

Forrester catalogued some of the well-known challenges, such as increasing staffing costs, turnover and strained infrastructure.

Image: Tutors work at TutorVista headquarters in Bangalore | Photograph: Uriel Sinai/Getty Images

Also read: IT offshoring south of the border
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