Automation, not cheap labor, is reshaping outsourcing
The offshore outsourcing of IT grew because of the cost of offshore labor. A software engineer in India is paid but a fraction of what a U.S. worker earns. Payscale puts the median salary for a senior software engineer in India at $10,000.
When IT services firms bring in H-1B visa workers, these workers earn substantially more than their overseas counterparts, but often significantly less than American IT employees.
This labor cost advantage has been a powerful lure for U.S. customers, but analysts see labor costs diminishing in importance. Customers want more automation, whether it's infrastructure management or business process outsourcing. IT services firms can no longer complete exclusively on lower cost labor.
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