Computerworld - Ford Motor Co.'s accounts payable processing unit in India typically loses power three or four times each day. On top of that, it's difficult to establish a telephone connection there. Meanwhile, employee turnover for IT staff in this region is an eye-popping 30% per year.
But these daunting challenges won't stop the world's second-largest automaker from opening a major IT hub in India later this month.
Dearborn, Mich.-based Ford disclosed plans
|Shift in Gears|
Ford plans to open a major IT hub in Chennai, India on March 29:
Eventually, Ford hopes to make the site a mainstay of its global technology operations, said John Larson, director of Ford Asia Pacific - Information Technology.
"Nobody is doing exactly what we're doing," said Larson. "If it is successful, we want to see [the Indian facility] take on more responsibilities, as long as it's cost effective."
"There are advantages to having IT systems in India, in terms of the costs, time difference and other features," said Gerard O'Shea, an analyst at The Yankee Group in Boston.
For instance, according to Yankee Group research, it costs $12 for a U.S. company to field a 30-minute customer support call in the U.S. and about $3 to $5 for an e-mail response. By contrast, those costs may be significantly lower in India, O'Shea said.
Ford plans to spend $10 million on the first phase of getting the subsidiary, Ford Information Technology Services of India, up and running.
That investment will cover the equipment and technology needed to operate the IT hub but not the costs for personnel. To handle its labor, Ford will outsource all of its software development, e-mail processing and other IT management services - a staff of about 700 to 1,000 workers - to Indian contractors, Larson said.
Numerous U.S. firms, such as New York-based American Express Co. and Benton Harbor, Mich.-based Whirlpool Corp., have also outsourced call center support
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