Rural Sourcing?

A colleague pointed out to me a news item regarding a venture by Accenture and a rural Native American tribe in Oregon that is intended to set up a low-cost domestic service center for outsourced document processing, software development and call center operations.

This reminded me of several conversations with frustrated CIOs of large corporations that were anguishing over the need to rely on offshore service centers in order to achieve cost reductions. The CIO of one of the largest U.S.-based airlines was particularly anguished over this. "When," she asked, "will we put our own underutilized human resources to work?"

Well, it seems that wish is becoming a reality – at least on a small scale. Several companies have recently sprung up in rural areas of the U.S. offering a variety of onshore outsourcing services. One, Rural Sourcing, Incorporated of Jonesboro, Arkansas, enables CIOs to outsource IT work to currently underutilized and often underemployed, lower-cost IT workers living in outlying areas of the United States.

Personally, I don’t see much chance of this becoming a major part of corporate sourcing strategies. The reason is scale. Pockets of rural capability just can not offer the ability to scale to the degree that is possible through major "remote" destinations. Further, there would need to be some significant tax benefits made possible to offset the tax and wage differences of India, China, and Eastern Europe.

At the end of the day, though, it’s a matter of perspective. If all we do is look at "rural sourcing" as a last resort for those underemployed, where offshore destination countries view the work as a way up the economic development ladder. . . the attitude of the operation will have a very different tone. And, tone means service quality.

Do you think this alternative to going offshore has legs?