Outsourcing Companies Go Rural to Help with Costs

While the offshoring of technology labor is a trend not likely to go away any time soon, there are U.S. companies that are staying competitive by having parts of their operations at locations in more rural U.S. states.

Patrick Thibodeau at Computerworld has a good article on the trend and includes a profile of Atlanta-based software development company Xpanxion, which has new offices in Nebraska, but also in India. While this form of “rural offshoring” is not expected to make a big dent in the overall offshoring-to-other-countries model, it’s not without its support from employees, companies and customers.

Thibodeau writes:

Its Kearney [Nebraska] facility has about 30 workers and is expanding. Its employees provide quality assurance directly to U.S. customers, who don’t have to call overseas to collaborate. Working at a distance from major metro centers also helps reduce customer costs. Hiring a quality assurance leader in Atlanta could cost as much $95,000 to $115,000 a year; In Kearney, the pay would be closer to $60,000 or $70,000.

Eric Trettle, an Xpanxion vice president who heads the Kearney office, said Nebraska was picked because the state is “quietly tech savvy” and has good telecommunications infrastructure for businesses. Kearney was particular attractive because of the nearby branch of the University of Nebraska, which is working with the company on course development.

A company I spoke to earlier in 2009, DbaDirect, based in Florence, Ky., is an outsourcing company of database administration services and has a blend of U.S.-based and Asian workers to help meet the needs of clients. Some companies, namely banks and other heavily regulated industries, need to have workers onshore, and so they offer services for those requirements.

DbaDirect CEO John Bostick told eWEEK in the article “Sizing Up the Costs of Remote Database Administration Services” that “a global presence allows his company to compete on price with the companies that are totally offshore, as well as take on U.S.-based projects that need quick turnaround.” From the article:

“How do you drive rapid-required workloads like upgrades and migrations over a weekend?” he asked. “You use your global presence to make that happen while you compete on price and productivity … The good thing is that for those companies who don’t wish to or cannot, for regulatory reasons, do business abroad, we can customize our network to only work in the States. But, undoubtedly, having the flexibility for those clients who want and need price only, we offer that too.”

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