EDS's Jordan: We Need Offshore Labor - InformationWeek

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IT Leadership // IT Strategy

EDS's Jordan: We Need Offshore Labor

The services firm's chairman and CEO says U.S. vendors can't compete with lower-cost regions unless they enhance their own offshore presence.

Despite calls for limits on offshore outsourcing by IT worker groups, politicians, and even some of those protesting at the Republican National Convention in New York, most tech-industry CEOs appear committed to the strategy.

EDS chairman and CEO Michael Jordan told InformationWeek during an interview at the services firm's headquarters in Plano, Texas, on Monday that U.S IT vendors can't compete with rivals from India and other low-cost regions unless they enhance their own offshore presences. "We have to recast our economics to be competitive," Jordan said.

Other high-tech CEOs, including Intel's Craig Barrett, Hewlett-Packard's Carly Fiorina, and Dell founder Michael Dell have voiced similar sentiments on the topic of offshoring, which has become a hot-button electoral issue as more and more IT and other white-collar work heads overseas. In defending the practice, Jordan said globalization will result in a net gain in jobs for the United States. "Already, we're seeing foreign pharmaceutical firms moving R&D work here," he said.

Jordan said EDS will continue to move programming jobs offshore to tap low-cost expertise in countries such as India and China. "If we're going to be in the applications space, we have to do that," he said. He added that the IT services firm also plans to move some call-center workers from nearby countries such as Canada to offshore locations where costs are even lower.

Overall, Jordan said EDS, which has been hit with numerous setbacks lately--including the downgrading of its debt to junk status by Moody's Investors Service--needs to cut its service delivery costs by 20%. Said Jordan, "That is a big part of our plan to move ahead."

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