Direct control of offshore IT can reduce risk

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Direct control of offshore IT can reduce risk

Nick Huber
Companies should consider bypassing outsourcing suppliers and setting up their own offshore IT subsidiary to reduce risks and widen commercial opportunities, according to the founder of internet travel company eBookers.

At the National Outsourcing Association conference this week, Dinesh Dhamija, chairman and founder of eBookers, will explain how the travel company moved more than half its IT and business functions to a subsidiary it set up in New Delhi.

Since its launch in 2001, the subsidiary has cut labour costs by 70% and has maintained service quality, said Dhamija. The centre handles web production and development for the company's 13 websites in nine languages, as well as technical helpdesk support.

Heads of departments and IT staff have been retained to control the company's strategy.

The performance of the Indian subsidiary is such that eBookers now uses it to offer IT and business outsourcing services to other companies.

"I originally come from India, and I said why would you want to give a middleman the profit?" said Dhamija.

The Indian centre, which is 97% owned by eBookers, was established to slash costs in response to the slump in the travel market following the World Trade Center terrorist attacks in 2001. "We had about 12 months to go before we went bankrupt," he said. "Essentially, after 11 September, travel bookings stopped."

On the lessons learned from eBookers' offshore venture, Dhamija said the cost savings took longer to emerge than first anticipated and advised directors to make sure they give staff overseas enough power to carry out their tasks.

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