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Farmshore Future

By Frank Hayes
October 4, 2004 12:00 PM ET

Computerworld - Kathy Brittain White has a dream. She figures if U.S. CIOs will ship programming jobs to India to save money, maybe they'll ship them to rural Arkansas instead. So White's company, Rural Sourcing, is setting up outsourcing centers in places in the U.S. where the cost of living is low -- not as low as in Bangalore, but low enough to compete with the total cost of offshoring. White also plans to get her programmers up to a high process-maturity level like those offshore programming shops (see story).
Low costs, high quality -- and it's onshore. For CIOs thinking about offshoring, this really does sound like a dream. For programmers worrying about their jobs, welcome to your new nightmare.
By transplanting the offshoring model to the U.S. boonies, White is wiping out most of the emotional and political arguments against IT outsourcing -- the ones anti-offshoring groups have pinned their hopes on. These U.S. jobs aren't being shipped overseas -- they're being shipped to the U.S. The income tax revenue from these jobs doesn't disappear -- it just comes from a different state.
Meanwhile, on the business end, White's approach hits the competition where it ain't, resolving the thorniest offshoring troubles. And as a former corporate CIO herself, White knows where all the pain points are.
Cross-cultural confusion? Transnational legal questions? Lack of direct communication? Time-zone differences? Those issues are pretty much unavoidable when programming work goes out of the country. When the work goes out to the country, those issues are pretty much nonexistent.
These problems have spurred some CIOs to bring IT jobs back from overseas. They're not just annoyances; they jack up the cost of offshoring and reduce the chances of success for an offshored software project. So if White's plan works, it will be a real alternative to offshoring -- an alternative that actually gets rid of some of the grief offshoring generates.

Wait, it gets better, at least if you're a CIO. If White's Rural Sourcing is successful, it will expand and spawn imitators. This new "farmshoring" crowd will start to soak up the outsourcing business that companies in India, Russia, China and elsewhere were expecting to grab.
The offshore companies won't take that lying down. They'll beef up their offerings, improve their quality and expand their services, working to make offshoring worth the trouble.
That, in turn, will push the farmshorers to improve their offerings. And the cycle will continue, with the ante raised each time. That's exactly what competition is supposed to create: more choice, better deals, a buyer's market. And

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