Keeping IT work close to home

Sending IT projects to another country isn't the only way CIOs can keep labor costs in check. They can send IT work to the country, says former health care CIO Dr. Kathy Britain White.

A longtime proponent of farming out IT work to rural U.S. areas, White is the founder of Rural Sourcing Inc. (RSI), a Jonesboro, Ark.-based nonprofit organization that enables CIOs to outsource work to underutilized, lower-cost IT workers in outlying areas of the U.S. just as they would send work to India or China.

The seeds of the idea date back 10 years to when White was CIO at Baxter Healthcare and had trouble finding and keeping IT talent. Born and raised in Oxford, Ark. (population 642), White knew there were qualified workers outside big-city limits. "We were having trouble finding people around Chicago," she recalls. "So I went on a recruiting trip to Arkansas to an area where there wasn't much industry and there were no companies in town, and we started a virtual internship program that allowed students to stay in Arkansas and work on our projects from there."

White continued the rural virtual internship program when she became CIO at Cardinal Health Inc. outside Cleveland. And when she left that post last year, she saw an opportunity to take her pet project to another level. The rise in popularity of offshore outsourcing had proved to CIOs that remote workers could produce high-quality work. So, White thought, why not apply that model stateside in areas of the country where the cost of living is lower?

White says she is able to offer IT workers salaries from $38,000 to $50,000 a year in rural markets, which is competitive with what CIOs will pay for offshore talent if you look at total cost of ownership. And the talent is as good as anywhere else in the country -- or the world -- White says. "I know firsthand the capabilities and work ethics of individuals from rural areas and how many are underemployed. But because of family and personal reasons, they have to stay in the area," says White, who hopes RSI can bring economic expansion and better employment opportunities to underdeveloped regions.

So far, partnerships play a big role at RSI, which is working with local universities and governments to attract employees and partnering with companies such as Optimal Solutions Integration Inc. (an enterprise technology consulting company) and Novell Inc. to jointly market its offerings.

RSI has one development center with 15 full-time employees and several part-time student workers in Arkansas doing work on two pilots (for Cardinal Health and Mattel Inc.). White also has plans to open centers in Oklahoma, North Carolina and New Mexico in 2005.

"I believe [this] can really be a viable alternative way to source IT intellect in the future," says Mattel CIO Joe Eckroth, who has three RSI employees working on Web development and support. "If done right, it can actually be more attractive than offshore for many time-sensitive or mission-critical initiatives." So far, the pilot is going well and Eckroth plans to look at expanding the RSI relationship in 2005 as a complement to the offshore outsourcing he does to India and China.

Currently, RSI's focus is on application maintenance, Web-based technologies, and "any project that [CIOs] don't want to do in-house but requires frequent contact between the outsourcer and the client," White says. But the plan is to add application development skills next. The ultimate goal, White says, is to create a full-blown rural sourcing company with 50 sites in 20 states, offering a far-reaching portfolio of IT capabilities.

"This is my passion," White says. "I believe in a global economy, but to let pieces of America be disadvantaged while building economies offshore is a shame. I believe we can be part of a global solution. And this is a great opportunity to do something while there's still time to do it."

This story, "Keeping IT work close to home" was originally published by CIO.

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Copyright © 2004 IDG Communications, Inc.

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