IT outsourcing companies started well in the 1980s following US trend, created tie-ups and helping the US companies and the US economy growth multifold world-wide. There is absolutely no doubt about it. I am not intent to question their values and business practices entirely. This article should be taken as a whistle blow for both US and International companies. Over the period of last 10 years, the quality of people, qualify of service and quality of output thereby deteriorated. This is a killer for both US and International economies. I read the recent article in Times of India quoting the statements from Nasscom as H1B visa program rules are unfair and is treating Indian companies unfairly. First of all why IT outsourcing companies are so much obsessed with H1B VISA? It is because instead of trading the software products they are trading people as products. That’s is the problem. US is trading $ as a product instead of it as a medium of the transaction, and offshore companies are trading people for the dollar. The free market system should be
Seller :   (human capital) People -> (make)product-> (trade for) $
Buyer:   (use revenue/profit) $–> (buy) Product-> (provide) Service to customer use the product
Instead,
The model has become:
Seller: (human as commodity) People-> (trade for) $-> (convert to) Rupee -> Make profit on currency
 
Buyer: (use capital market to get debt $) -> trade for human commodity -> build weak capabilities -> increase the debt-> borrow more from capital market
 
Finally, the output is nothing but unproductivity. It is all the socialistic model where $$ gets printed and distributed through Banks to large corporations who use the money to hire more people as commodities and finally turn back to government/banks / stock market for more money. The very fundamental spirit of Enterprise and businesses are killed in this people and $$ trading system.
If the offshore companies want to go for free trade, let them work on innovation to develop good products, and let them sell those to America and the world via fair trade system, similar to how American companies for example Coca Cola, Pepsi, Johnson & Johnson, Procter & Gamble, GE, etc conduct business worldwide. Take a guess, how many of these American companies send their staff to work abroad? To be very precise, the percentage is almost negligible when it comes to the executive, sales & marketing level. They either hire people locally in that country or tie-up with the local companies to do the business and provide service.
Whereas, on the other hand, what do IT outsourcing companies do? Besides grabbing the contracts by underbidding, they send human resources from offshore to work on the projects. The more appropriate approach could have been outsourcing the work to the companies operating in the US itself primarily for the reasons: direct availability of locally present employees in substantial numbers. But the crux of the problem is, these companies do need higher profit to rank themselves high in the International stock market. With the great backup & massive support from international bodies, these large IT services companies are not only giving damage to the US but also to International economy at the country they are operating. There are thousands of excellent innovative companies present capable of excelling in the world market if these large IT companies stop grabbing & labeling contracts as Services Contract and employ cheap labors in millions to get them completed.
Why has everything become services? The software can only be serviced to some extent, right? Well, the right approach is that the clients in the US and other countries should convert their requirement into an end product, like some commodity and ask both, the local and the foreign players, to provide only the finished goods. The payments for the end product should only be released when the final product is handed over to the clients with their complete satisfaction. Whereas, at present things are going the way around. The clients engage the services companies; pay them for utilizing their human resources (both in the US and offshore) based on the Time-Only model.
Why the Software or the Technology Engineers should get paid for their time only? They are not a blue collar labor where the work achieved is primarily measured by the physical labor exerted in a specific interval of time.  Where the industries employ intellectual minds, there pay should only be determined by the outcome of the end product/commodity which the client can use effectively. This services and time-based model are seriously killing the American dreams, American Job, Worldwide productivity, and rewards for innovation. This is the direct result of a political system that encourages Big Wall Street / Dalal Street businesses & employees and works in their favor straightforwardly. San doubts, the Democrats in the US and the Socialists around the world love this scenario completely. But this system needs to depart now in order to bring back productivity and prosperity to both, the US and the world. H1B visa should be made available only to the talented Engineers and they should get it directly from the US government by proving their talent. offshore companies should not be given access to H1b at all to hire human resources on commodity style.
No more sponsorship.
Just hire H1B workers along with other American workers based on sheer talent.
Not on price!
Time is not far away. We are definitely getting there. Offshore outsourcing companies must understand that they need to get into innovation and restrategize their work models as the time at present demands it.

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Want to talk to me more on the subject? Write to me at suresh.kannan@transformationguild.org

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