U.S. FIRMS FINDS FOREIGN SOFTWARE CHEAP 

Five years ago we wrote a column on a company based in Madras, India that would produce software programs to handle Canadian or American income tax accounting for a fraction of the cost here in North America. At the time the idea seemed preposterous. That threat has not gone away. Now hear this:

In Palo Alto a small two-year-old company operating out of a cottage attached to a garage is electronically importing software programmers from Moscow, Russia right in the heart of Silicon Valley. How does it happen?

Michael DeLyon, a San Francisco area financial analyst one day had a problem. He couldn't finished a computer program for a client. He knew he was in trouble as he was short of cash at the time and couldn't hire the high-priced local help. What to do? Call "program busters" in Moscow. In Moscow? Yes. DeLyon shipped his inoperative software to a friend in Moscow who returned it via fax. It worked. Problem solved. Client happy. Business born.

Today, DeLyon's company brings together American companies with software/cost problems and skilled eastern European software programmers who feel rich on a quarter of the going rate for such work in North America. Now InterContinental Software has 600 foreign workers on standby ready to work on a contract basis. In knowledge industries, brain-power is the only raw material needed. Eastern Europe, always strong in math and sciences have these resources by the town-full and a bargain by our standards.

Selling the idea does take time, according to DeLyon. U.S. companies aren't quick to take the bait, but when they see they can reduce costs by 75 percent they realize that if they don't and others do, they are out of business. Globalization equals equalization.

To get customers, InterContinental makes an offer few can refuse: a three-week free trial. To date no one has left who was satisfied with the free test run. According to Kevin Thompson, Director of Technical Support for software company Magus in Mountain View, "It would have cost us five times as much to do the work here."

Using electronic mail, fax and overnight delivery services, being 10,000 miles away isn't that far from being on the other side of town. Today, it doesn't matter where the body is as long as the brain is in cyberspace.

Even with such talent at low cost, DeLyon still has competition ... from India, Great Britain, Hungary and China. I have been approached by universities in Nigeria to do such programming at even lower cost. But according to InterContinental, what they have to offer is quality, the biggest selling feature in today's marketplace.

During the past two years Fireman's Fund Insurance Companies has been working with programmers in India and England. DeLyon mentions that Hewlett-Packard, a software developer from Cupertino, California called Inventa Corp. and giant retailer Mervyn's, among others, use overseas programmers. Inventa president Ashok Santhanam claims the resources he needs are in short supply in the U.S. and that he "can't find the skills you need to get the work done in a timely fashion without looking overseas."

New York Life has been processing insurance applications and claims for a couple of years now in Ireland because they say, they can't find sufficiently trained employees in New York. Credit card giants have been processing card accounting in Jamaica for several years as well.

As far as Michael DeLyon is concerned "We are the wave of the future" he says. "I'm now ready to tackle Canada".

* * *

< previous | chapter index | next >
back to Main Chapter Listing
back to Home Page