Large U.S. firms like IBM and Citigroup have begun to look at outsourcing in a new light. American businesses are starting to buy up Indian outsourcing operations, keeping the work performed by these outsourcers in countries like India and China, but placing an American name on the organization and reaping the benefits of cheaper labor while cutting out the middleman.
Citigroup and IBM may become models for other companies that have established relationships with Indian outsourcers. Direct ownership may be less costly and give management more control.
"When you have employees working for you, you have the ability as a senior manager to walk down the hall, and if there's a problem you grab a VP and say `fix it,'" says Kirkland partner, Gregg Kirchhoefer. "When you have to solve a problem with an outsourcer, you have to rely on your relationship with them, and the agreement that was signed."
This article appeared in its entirety on CBS MarketWatch on April 16, 2004.