I am sorry to say, that this is common in large outfits. My company, based out of San José, Costa Rica, although small, tries it´s best to make good on promises to shareholders, partners and customers out there.

No, they can't be trusted. In fact, I'm hoping this is the beginning of the end for such offshoring madness. It's stupid to give our jobs and money away like this.
And when Pakistan and India start bombing each other, I guess our greedy companies will rethink their decision to risk our security and jobs by going offshore to "cheap" locations. There's always a cost, nothing is cheap.

...is this the whole article?

thank you,
Maxwell Mattison
Global Performance Accont Manager
TCS Global Services

The secret is not to stop outsourcing, but to look at the Governance framework behind outsourcing. Most decisions are made with only cost in sight. Smart sourcing is valuable, and one important tenet of smart-sourcing is to develop contingency plans if things do not work out. The second important tenet is Sourcing Out projects as needed, (not carte-blanche outsourcing everything). This of course requires a network of credentialed providers and an agile procurement system. The Satyam tragedy should help us better develop Governance frameworks for managing outsourcing, and more important, contingency planning is things do not work out.

Of course no North American or European company has ever done anything of this sort. There's never been a hi-tech company in those places that has scammed anyone or failed to deliver the highest of quality and integrity...

I am with Maxwell Mattison: Is this the whole article? Why bother with the "Read More" option for two sentances? Does CIOInsight have an editor?

Just wait...

Tata Consultancy Services (TCS) and other offshore outsourcing companies are about to get slammed with additional legal problems.

The financial fraud by Satyam is only the tip of the iceberg. The situation looks grim for the future of offshore outsourcing due to:
- lack of company management control
- misrepresented financial statements
- declining revenues due to market exchange
rates and reduced client sales
- client disatisfaction
- stolen trade secrets

Offshore outsourcing is not the panacea that it was once heralded to be. I am reminded of a statement [sic] by the Gartner Group several years ago the has proved to be an albatross around their neck, that companies need to "outsource overseas or they will wither on the vine".

By losing control of IT operations and offshore outsourcing overseas, US companies risk losing their intellectual property and fiscal capital when they are tied to unstable companies such as Satyam.

Honesty? Trust? You will not find these needed business traits among offshore contracting companies.

I've had mixed results with outsourcing both application development and business processes. One was to support an anesthesia medical billing customer service operation. The paperwork and processing was done well by an India based company, but the phone support was not received by the patients/customers who were trying to resolve their anesthesia bills.
The other situation was website development and changes that were being done on a daily basis. This worked out well, another India based group as the time difference allowed the off-shore dev. team to code changes from that day into the next days release.
Unfortunately, fraud is always a possibility and temptation to those with low ethical and moral standards. Let's not forget CA and out good buddy Sanjay Kumar-who's now hopefully someones girlfriend in the prison he's vacationing in for a couple of years.

Dan M.

Of course you can't trust an off-shore company as well as you can trust a local one. Companies were short-sighted and naive to think so. Like your Indian partner? How do you like having all your sensitive data and intellectual property stolen? As a bonus, you have NO RECOURSE. What are you going to do, fly to India and pursue the thief through a decades-long court procedure?

What about Enron? Shall India stop allowing US companies to enter into its markets?

Greed unfortunately has no geographical boundaries as Siemens in Germany (involved in a bribery scandal), Bernie Maddoff/Lehman/Merrill and a slew of others in the US, Satyam in India etc so clearly show us. Regulators and government as also rating agencies /auditors all seem to look the other way when it comes to doing their job

What do you expect, they learned from the best, us... The goal there has always been to upstage the USA business model by doing it bigger, better and cheaper, impasses on cheaper. When I first rolled into India Satyam was the only private ISP in the land, and they sucked at it. Think of them as the AOL of India. But they were fast learners, talking big and looking big is part of the India business model. That's how they get the money flowing in to bankroll all the expansion.

Ten years later Satyam is one of the largest multinational companies in the land. Now they get caught cooking the books. Wow, imagine that, Enron was how many years ago?? I was in India when it happened and heard the laughter. It's something you just had to experience to understand the way business is done. The thousands of lost jobs from Enron was looked at like a write off for the cash the higher ups walked out with. The difference is they would still be living the good life in India..

Before any U.S. company outsources business to or invests in a foreign country the board of directors needs to spend a year living in that country. Six months to get settled in and another six months to figure out how your getting taken.

Cheers

Maxwell., U can use the link 'Latest Sign' for actual article.

I agree that, Auditors, Promoters, Regulators have defaulted in misleading the investors for so many years.

Back in India, actions are taken including responsible Board consisting of Who's Who in Industry...

There are measures taken to Black listing some of audit firms by the way above forum talking about outsourcing forgetting about Lehman Brothers and Bear Sterns and Merrill Lynch...so and so forth .. all this were audited by same guys...

Guys chill we are all global citizens thanks to technology filling up the gaps...

Our problems might be different but, underlying social and econmical parameters are same which are influencing and creating different symptoms.. like Virus of Fever ..

there is no ethnic or national monopoly on greed. and no system of regulations and statutes can prevent someone clever from taking advantage.

india has grown quickly. the world is watching how india handles this home-grown problem just as the world watched the US and germany, and ountless other coutries handle their home-grown problems.

i do, however, have a problem with the emotions and nationalistic blindness demonstrated by ASSOCHAM and others. let's get real: there is no such thing as an SEC programme that allows a company to provide stock at IPO prices to potential customers!in fact, if you look at wipro's f-1 from 2000, it clearly states that the programme is for employees and their families ONLY. it seems patently stupid to admit and use prevailing customs as an excuse. (but the US' SEC will have to figure that one out.)

defence of wipro, satyam (prior to the "confession"), and others withou8t proper fact-checking is not going to help india inc. in fact, it will serve it badly. the politics of outsourcing are not nor ever have been favourable. let us not give anyone an excuse.

as for the world bank? its ponderous lethargy is legend. but methinks there's more cover-up than laziness involved here.

I was a fairly senior US based manager with an India based outsourcing company.

I soon found that I could never trust the company I worked for. Not only in client relationships but as a member of the same "team?". I am hopeful that we will become more intelligent and bring our business applications and jobs back to the US.