Offshoring in Rural Areas Catches On
Jacob Cherian
December 16, 2009
Xpanxion based in Atlanta has began operations in Nebraska as well. Why? To take advantage of the low cost of living and lower wages than other parts of the U.S.
Xpanxion was established about ten years ago as an offshore software development firm. And in 2006, the company began a facility in Kearney, Nebraska. In total, Xpanxion has a total of 300 staff with 180 employees working in Pune, India.
The Kearney facility now has 30 staff and is expanding its staff numbers to accommodate quality assurance to its clients in the U.S. This would mean these clients would not have to call abroad to obtain company services.
In addition, customer costs are decreased, since it operates further away from major cities. Looking at the figures, a quality assurance manager in Atlanta can cost as much as $95,000 - $115,000 per year, while the same position pays approximately $60,000 to $70,000 in Kearney.
Nonetheless, this kind of "rural offshoring" is not likely to make a major dent in the offshoring market, particularly outsourcing to India. Offshroring to India remains a cost effective option since the quality is driven by the availability of talent. Taking a looking at the salary figures, the payment for a quality assurance employee may be around $20,000 in India.
According to research director of Dallas-based Everest, Anand Ramesh commented that rural outsourcing is likely to obtain a small market share from the offshore market. It's primary objective will be to drive customer support where an understanding of the cultural context or insight into a specific product is required.
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Tags: Rural Outsourcing , Lt , Gt
