There has been a huge hue and cry about Obama's recent move to discourage outsourcing to India. Media has created a sensational buzz of fall of Indian IT industry and my mom is super happy, I moved out of IT world at the right time. However, I think that such a move could actually prove to be the much required impetus for Indian IT industry to leapfrog in the value chain !!
First, its not gonna happen that overnight whole outsourcing Industry is wiped off. There may be re-consideration when board room decision on outsourcing will happen. The cost benefit achieved may be reduced to certain extent. However, for a moment let us assume that US companies will have not strategic cost advantage to outsource low quality work to India.
The impact of such development will be that the deal flow from US will be trimmed to a large extent. This move will hurt both Indian and US based IT comapnies such as IBM, Accenture similarly. Second, this move will be help Indian IT companies to leapfrog from a service provider to a strategic partner level who will fill in the space for companies rather than just sustain on cost arbitrage. Lastly, this will also help Indian IT companies become aggresive on domestic / non-US markets.
All these moves in my opinion will be beneficial for Indian companies. Given the current experience curve, it isn't wrong to conclude that Indian IT companies growth story will continue. It's just the means that will change and perhaps, it will be for good. Further, if such change occurs with Indian IT companies, we will be in much better position to command higher billing rates and better contracts when the curtains of protectionism are pulled down with the inevitable economic surge in world economy. Hence, my 2 cents on Obama. Go for it Barack !!
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