Outsourcing Reaches Its Tipping Point - InformationWeek
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IT Leadership // IT Strategy
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1/30/2007
03:50 PM
Paul McDougall
Paul McDougall
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Outsourcing Reaches Its Tipping Point

Author Malcolm Gladwell says a tipping point occurs when a phenomenon starts to multiply exponentially, as though it were an infectious virus. Outsourcing's tipping point occurred this week when Accenture announced it would have more workers in India than in the United States by August.

Author Malcolm Gladwell says a tipping point occurs when a phenomenon starts to multiply exponentially, as though it were an infectious virus. Outsourcing's tipping point occurred this week when Accenture announced it would have more workers in India than in the United States by August.Speaking Monday to reporters in Bangalore, Accenture CEO William Green said the consulting and outsourcing company will add 8,000 workers in India this year, bringing its total head count in the country to 35,000. That will surpass the 30,000 workers employed in Accenture's U.S. operations.

"Though we continue to hire in other locations, too, the recruitment will be the highest in the subcontinent, as India has become a critical part of the Accenture world and integral to our growth strategy," said Green, according to text of his remarks released by Accenture India.

With those words, Green opened the floodgates. The steady stream that has been carrying some U.S. tech jobs to India is poised to become a torrent. Why? Because until now no CEO of a major American company has gone on the record to say that he plans to make India his main base of operations.

But that psychological barrier has been breached.

And anyone who has followed business for any length of time knows that CEOs have a stronger herd mentality than elephants. Sometimes they get the urge to merge and there's a huge wave of M&As. At other times, it's all about disaggregation. The point is, it often takes just one bold move by a CEO at a major company to have all of his or her peers rushing to follow suit.

Now that Accenture's Green has said that India will be the company's largest geographical unit, it's just a matter of time before the following thought starts germinating in executive suites at IBM, Microsoft, Hewlett-Packard, and other tech companies anxious to capitalize on the country's low-cost workforce: "It it's good enough for Accenture…"

And so the tipping point is reached.

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