Ohio Gov. Ted Strickland is delivering one of the strongest attacks yet on offshore outsourcing, calling it not only a threat to jobs but an IT security risk.
Strickland's criticism of offshore outsourcing was part of a recent order to state agencies prohibiting them from hiring any firm that sends work offshore. The agencies were ordered to be in compliance by last week.
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In his order, Strickland said that the purchase of offshore services "has unacceptable business consequences," and among them were "unacceptable data security, and thus privacy and identity theft risks."
But Strickland has also wooed offshore companies to his state. In 2007, Indian IT services giant Tata Consultancy Services said it would build its North American Delivery Center in Milford, Ohio, after the state offered about $19 million in tax credits and other incentives.
TCS said Friday that it has 400 people working at its Ohio delivery center, an increase of a 100 workers from about a year ago.
TCS employs more than 141,000 people worldwide, but more than 90 percent of its work force is Indian. U.S. workers account for only a tiny fraction of its workforce. Earlier this year, TCS reported that it has 10,700 employees who are nationals of other countries and of that number, fewer than 7 percent were Americans.
Despite the effort to win Tata, Strickland's views on offshore vendors are particularly harsh.
"There are pervasive service delivery problems with offshore providers, including dissatisfaction with the quality of their services and with the fact that services are being provided offshore," Strickland wrote in his order, which also pointed out: "It is difficult and expensive to detect illegal activity and contract violations and to pursue legal recourse for poor performance or data security violations."
Strickland's deal with TCS has drawn White House attention. Last November, Strickland was among 16 people seated at the head table for a State Department luncheon for Indian Prime Minister Manmohan Singh. Others with Strickland included House Speaker Nancy Pelosi and Secretary of State Hillary Clinton.
Stickland's executive order stems from a decision by the Ohio Department of Development to hire a Texas-based company, Parago Inc., to administer a rebate program for new energy-efficient appliances. But the company apparently used call center works in El Salvador, prompting Strickland to ask for a review and the subsequent order last month "to ensure that public funds are not expended for offshore services."
Amanda Wurst, a spokeswoman for Strickland, said Friday that it has been Ohio's policy all along that public funds should not be spent on services provided offshore.