How about the scale issue. How can domestic sourcing providers compete with providers in India with its enormous labor pool?
Behrendt: There's been this belief over the last 15 years that India has an unlimited labor pool. If United Healthcare needs 1,000 people, the belief was they could only get that level of support in India.
But we have plenty of resources in the U.S. We can recruit 1,000 people. Supply is not the issue. The issue is the concentration of services. How do you put 1,000 or 2,000 or 5,000 professionals in one particular area and hold on to them?
To scale, you have to do that in smaller metropolitan areas where you can bring those bodies in, where you're not inhibited by issues like housing or infrastructure. That's why we're opening a center in Vermillion, South Dakota, in 2014, along the I-29 corridor between Fargo and Sioux Falls. A million people live there and we can build a 700-person center.
Your IT Consultant Academy at the University of South Dakota will accept its first full class this fall. How will partnering with the university help you to overcome staffing and scale issues?
Behrendt: It's all about the production of resources. We want to get potential employees as prepared as possible so we have to provide the least amount of post-graduate training we have to. The IT Consultant Academy gives a student a semester's worth of IT classes paid for by Eagle Creek. The state of South Dakota is working with us on this because they want these students to stay and become the next generation of taxpayers.
We expect university systems across the country to start building these kind of programs and we want to scale faster than them. We want to be a destination.
What impact do you think immigration reform, if it passes as written in the current Senate bill, will have on the IT outsourcing industry. Would such reform be beneficial to you?
Behrendt: I was president of an offshore company fifteen years ago. At that time, many companies broke every law under the sun to bring offshore resources to the U.S. Today, a majority of temporary visas go to offshore outsourcing providers but very few turn into green cards.
That tells me that Indian companies are bringing people over to solve their back-end problems, and the U.S. government is subsidizing that. If the intention of the visa program is to bring the smartest people over to become U.S. citizens, it's not working.
If the new visa rules say you can't bring those workers over at the same levels, that will certainly facilitate the success for those of us building an alternative to the traditional offshore model. But I think the back-end of the offshore model has enough problems with or without visa reform, to fuel the movement of some proportion of that work back to the U.S.
I'm not anti-offshore. I'm a believer in more balanced global deployments. There's a place for everything.
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