Ignorance underpins Indian outsourcing fears

There has been a curious kerfuffle about "outsourcing" this year, as though it was something new.

There has been a curious kerfuffle about "outsourcing" this year, as though it was something new. You might even imagine that the economic arguments that saw the massive reduction in UK jobs in, for example, the textile and shipbuilding industries somehow did not apply to white-collar work.

But the exploitation of Indian programming talent certainly is not new to the UK computer industry. I first discussed it 20 years ago, in the context of Tata Burroughs, which was founded in 1977. This became Tata Unisys, and then Tata Infotech. The Tata Group is now India's biggest computer company, and Tata Consultancy Services (TCS) turns over $1bn a year.

I find it somewhat amusing to hear IT managers express reservations about dealing with companies like this. TCS has development centres in the US, Australia, China, Hungary, Japan and other places besides India. It is a useful reminder that an Indian IT company can be bigger, older, and more international than the one you happen to work for. Not to mention cheaper.

The Americans are also worried about losing IT jobs to India. Indeed, Ed Yourdon, developer of the Yourdon Method of structured system design, sounded a warning in 1992 in his book, The Decline & Fall of the American Programmer. (In retrospect, it is amusing to see Yourdon describe TCS as "only a $30m operation".)

Intel chairman Andy Grove took up the theme at the Business Software Alliance's Global Technology Summit in Washington DC this month. He warned that software would go the way of steel unless the government acted. If Indian government predictions were right, India would overtake the US in software and services in 2010, said Grove.

But Greg Bentley, from Bentley Systems, said, "Let's not think of it as outsourcing: globalisation is the only thing that works for us and our industry. The issue is protectionism."

Filemaker's president Dominique Goupil took a similar line. "It is not just a job issue, it is a free trade issue. We need to be free traders."

The fact is that many IT companies, including Intel, invest in India because they can get things done there that it would be unprofitable to do in the US or Europe. But US software companies also know that most of their revenues come from overseas and, in the long term, India will be a huge market.

As for call centres, I see them as a failure of innovation. Most could be replaced by intelligent voice-response software. Until they are, I would rather have the phone answered in Bangalore than navigate through 19 stupid menus with a touch-tone phone.

Jack Schofield is computer editor of the Guardian

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