Global CIO: New Tech Firm Hiring Hundreds In U.S. To Take On The World - InformationWeek

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IT Leadership // CIO Insights & Innovation
Commentary
10/22/2009
06:38 AM
Bob Evans
Bob Evans
Commentary
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Global CIO: New Tech Firm Hiring Hundreds In U.S. To Take On The World

Two offshore-services execs and a prominent American CIO plan to open IT-services centers across the U.S. as low-risk and and price-competitive alternatives to offshore providers.

Can a U.S.-based IT-services firm staffed with hundreds of American employees working in this country compete on a global scale with offshore providers, global-services firms, and boutique consultancies? A startup founded by two offshore-services executives and a prominent American CIO are betting millions of dollars that their company can do exactly that with a new approach called "inshoring."

Called Systems In Motion, the company's plan is to create a handful of U.S.-based centers offering world-class IT services at competitive prices and with less risk, fewer regulatory obstacles, and a level of flexibility and nimbleness that today's high-change global business environment requires.

The startup company expects to get up to speed quickly by utilizing leading-edge technologies and infrastrucuture such as Salesforce.com's Force.com, Amazon's Web Services, and Zephyr Cloud Platform to keep costs low and project cycles short, and to position itself on the front edge of transformative approaches that many enterprises are just beginning to fully comprehend.

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For years, we've all been told—or have allowed ourselves to believe—that the U.S. just can't compete at that level in the IT-services industry, that U.S. workers aren't willing to work hard enough to make such a model succeed, that their skills are inadequate for such demanding and sophisticated projects, and that their salary demands are too high to allow such a model to be vialbe in this country.

Well, the founders of Systems in Motion would beg to differ. They've begun hiring key high-level personnel at their first development center in Michigan and expect to have about 150 people on board by the end of next year and, if all goes well, more than 1,000 employees at the Ann Arbor center within four years. During that time, they're prepared to invest $15 million in capital expenditures, with initial funding coming from an angel investment group that includes the company's CEO and also Preetish Nijhawan, who was a founder of Akamai.

On top of that funding, the three principals are banking that their deep experiences in running and buying from IT-services companies, combined with what they see as significant demand for their U.S-based model, will enable them to hit those targets.

Systems In Motion CEO Neeraj Gupta was an executive with Patni, a $700 million Indian IT-services company; chief delivery officer Michael G. Parks, who runs delivery, solutions and practice development, was CIO at Virgin Mobile USA and NorthPoint Communications, executive VP of IT at Wells Fargo, and a senior VP at American Airlines; and chief marketing officer Debashish Sinha previously headed up marketing at HCL America, a $3 billion Indian IT-serives company.

I had met Sinha during his time at HCL America and last week we spoke a couple of times about Systems In Motion's strategy.

"About a year ago, Neeraj and I started a discussion on whether the current structure of global services was living up to its promise of creating value for US businesses and the economy as a whole," said Sinha. "We sensed that while offshore outsourcing was growing, there was a strong pent-up demand for an alternative model for a large portion of the current and future demand for IT.

"The model is needed specially for those companies that don't have enough scale for leveraging offshore centers, that require tight integration between IT and business, that need to deal rapidly with a changing technology landscape, or that have regulatory considerations that make it difficult for them to create high offshore leverage."

In response to that need, Sinha said, he and Gupta and Parks designed an operating model that they called "inshore" that's predicated on delivering service that's cost-competitive with offshore suppliers while also offering a level of collaboration, innovation, and flexibility that non-U.S. companies would be challenged to match. And the worldwide IT business, he says, is still so large that inshoring will have a huge opportunity to pursue:

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