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Unisys ventures into Indian outsourcing

Dinesh C Sharma CNET News.com

Published: 28 Apr 2004 16:45 BST

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Information technology services company Unisys has announced it will set up a development centre in Bangalore, India.

The company will employ about 2,000 people and invest $180m (£101m) in the centre during the next five years, officials said on Wednesday. The facility will be operational within one year, and employees there will be working on software development and handling tasks such as maintenance and technical helpdesk services, Unisys said

A growing number of US technology companies are opting to open development and engineering centres in India, taking advantage of the cheap, skilled labour there -- and this trend is causing concern among technology professionals in the United States. Last month, the US wing of the Institute of Electrical and Electronics Engineers expressed fears that offshore outsourcing poses threats to the nation's technological leadership.

Unisys said it plans to hire software engineers and data-processing workers directly and also through its local partners. The company has been operating in India through its offices in Mumbai and New Delhi. It said it would continue to use third-party vendors in India for some software development and business process outsourcing work, even after the new centre is set up.

"For more than 20 years, our strategy has been to source globally in order to meet client demands. This new Indian operation will add capacity to Unisys global capabilities," Cal Killen, vice president of solution development, said in a statement. "This expansion of global sourcing options supports our commitment to meeting clients' needs while consistently managing costs."

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Software development for instance can be off shored with a perceived reduction in development costs but the resulting code is rarely of good quality and there is much greater expense in reworking and support over the life of software developed in this way. As a consultant who has to deal with off shoring on daily basis I very often see no savings at all over the lifetime of a software product, and in some cases actually see projects costing a fortune to rework.

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