The residents of the thriving metropolis of Mumbai are pushing on in the wake of the eight explosions that rocked its transportation lifeline, killing some 200 people and maiming hundreds more.

From an Associated Press story:

“Life must go on,” 32-year-old commuter Sachin Kotian said as he resolutely prepared to board a train at the Matunga station, one of the worst-hit sites.

Mumbai, formerly known as Bombay, is the commercial and entertainment capitol of India, and is the country’s most populous city. It used to be the home of textile mills, but its economy has since grown to include a vibrant services industry rich in engineering, and it is a major outsourcing hub and corporate destination.

Despite the ongoing controversy over outsourcing, the trend is growing. eWeek published a bunch of numbers recently. Of note, 59% of respondents are outsourcing application and web development, the highest on the list. Only 26% of those are very satisfied, suggesting there is plenty room for ways to improve outsourced relationships. India was by far the country most outsourced to, with 75% outsourcing their IT activities there.

Research and development is increasingly becoming a global commodity, according to eWeek (June 26, July 3 2006). Typically, research and design has been held close, with engineering outsourced and following explicit directives. However, companies large and small are finding that there’s plenty of talent to be found and they can bring products to market faster by tapping skilled researchers from around the globe. “It’s not body shopping, but brain shopping.”, said an analyst. It’s important to look at outsourcing as an extension of what you’re doing, not as turning over responsibility completely, said a CEO that was quoted.

A CIO Insight (March) supplemental called Innovations surveyed 1,440 information technology managers, nearly half of whom worked for companies with greater than 1,000 people, about the top ten projects in 2006.

Outsourcing was number 2 on the list, with an average of $8.22 million being spent on services for managing the company’s information technology or business process functions. In a similar vein, collaboration was number 5, with an average of $4.26 million spent on software to let people share files and other information. See the article for the full results.

Offshore strategy is not just about near-term operating savings. The truth is there are a number of factors at play, and these must be considered when crafting a successful offshoring strategy.

Wage arbitrage

The wage for a specialized web developer in India is a fraction of what it would cost to acquire those same skills in the U.S. The ratio of wage rates between the United States and mainland China for product engineers is about ten to one, while for software engineers in India it’s about twelve to one. Labor is less expensive in developing economies, including in skilled job categories. Yet stopping there is severely limiting.

I was forwarded this “joke” today, and thought I’d share it.

Question: What is the truest definition of Globalization?
Answer: Princess Diana’s death.

Question: How come?
Answer: An English princess with an Egyptian boyfriend crashes in a French tunnel, driving a German car with a Dutch engine, driven by a Belgian who was drunk on Scottish whisky (check the bottle before you change the spelling), followed closely by Italian Paparazzi, on Japanese motorcycles; treated by an American doctor, using Brazilian medicines.

This is sent to you by an Englishman, using Bill Gates’s technology, and you’re probably reading this on your computer, that use Taiwanese chips, and a Korean monitor, assembled by Bangladeshi workers in a Singapore plant, transported by Indian lorry-drivers, hijacked by Indonesians, unloaded by Sicilian longshoremen, and trucked to you by Mexican illegals.

I noticed an interesting advertisement in my e-mail inbox the other day, coming via the Jerusalem Post. The advertiser was the Israel Export and International Cooperation Institute, in cooperation with the Israeli government.

“Come and support the Israeli business arena”, it was titled. Israel is gaining a reputation as a center for world-class professional services, it claimed, and it wanted me to consider outsourcing to Israel. It offered this information:

10 Reasons to Outsource to Israel

1. A critical mass of fluent English speakers. Multilingual capabilities include Arabic, Russian, French and German.

I just had to use that heading. It was taken from inside the current eWeek, which is featuring news and analysis on offshoring to Russia. We hear so much about sending our technology work to India and we perhaps never really take a good look at Russia.

When looking to offshore, especially technology, it really comes down to India and Russia. India’s technology industry dwarfs Russia’s, with $24 billion for the former and a mere $1 billion for the latter. The economics are similar, but aside from the size of their industries, what really sets them apart? For one, India has a vast English speaking workforce and they are relatively well versed in Western business. And the sheer number of skilled people makes it easy to have a flexible and changing staff on a project.

Jagdish Bhagwati is the author of In Defense of Globalization, a book that, as its title suggests, takes on globalization’s critics and aims to show that globalization is in fact the most powerful force for social good in the world today. He’s surely qualified, as Columbia University’s Professor of Economics, Senior Fellow in International Economics at the Council of Foreign Relations, and a former Special Adviser to the United Nations on Globalization.

I only recently purchased the book and will share more as I read it, but I’ve been meaning to share a bit from a recent CIO Insight (March) interview with the author.

The May issue of CIO Insight had some interesting information related to team collaboration tools.

When asked where their companies stood with regard to web and collaboration applications, team collaboration tools where on all but 9% of respondents radars — with 47% having already deployed and 45% testing or evaluating a solution.

From the magazine:

What’s driving new-technology adoption? Improving business processes and making better use of information.

…

[The] strong interest in team collaboration tools suggests these applications lie at the sweet spot where these two business goals converge.