Outsourcing for the Small Fry

Everyone's going offshore ... except for smaller-sized companies, entrepreneur Rajesh Shah observed a few years ago.

So in 2003, his information-technology firm abandoned India's domestic market to earn dollars, albeit from smaller fish than household names like IBM, Dell and Hewlett Packard.

"For small- and medium-sized businesses to look at offshoring is not easy," Shah said this morning. "For them to be competitive in the U.S. market, though, they have to go offshore."

Strategic Sourcing India Pvt. Ltd.'s office sits above a crowded and dusty shopping center in a bustling part of Pune, just steps from the brand-name shops and franchises on Mahatma Gandhi Road. It is an example of traditional offshoring, and one that many companies utilized before opening their own offices in India.

Amid rising salaries throughout the country, though, companies like Strategic Sourcing must limit their overhead to stay competitive. Unlike the sleek IT parks and office complexes I have seen this week (more on that in an upcoming story profiling Pune and the Northern Virginia firms it has lured), this software developer's digs are simpler. Workers share phones and cram six or seven work stations into a single conference room.

There are 32 employees. Then there's Shah and an administrative assistant. That's it.

"That's how we are surviving," he said. "When I am in India, I spend each dollar like an Indian rupee."

[Audio clip: Shah talks about one of the ways Western business practices have influenced his company.]

He currently has two clients: Clear Nova in Atlanta and Speak Tech in Los Angeles. He tries to tell them that his employees are theirs.

"You can see them as a virtual extension of your enterprise," Shah said.

Because some work just can't be done remotely, employees visit client sites -- usually after they have been at the company at least a year.

Java programmer Yogesh Patil plans to leave for Atlanta on Thursday. To hear why he's excited, click here. Besides observing how an American company works, he really wants to experience Niagara Falls and go shopping.

By S. Mitra Kalita |  October 19, 2005; 5:44 PM ET  | Category:  In Pune
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