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by Vault Consulting Editors | March 21, 2008

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Earlier this week, tech consulting and offshoring giant Tata Consultancy Services opened a new facility in Milford, Ohio, just outside of Cincinnati. The 220-acre facility, which will be one of the firm's largest delivery centers, will create 1,000 jobs in the area, and will be a strong boon to economic growth in the area. Needless to say, local authorities could hardly contain their excitement, especially in light of a looming recession and rising unemployment rates. "We are excited that TCS has decided to make this significant long-term investment, making Ohio home to the newest and fastest-growing sectors of the economy," said Governor Ted Strickland. "This is a great day for Ohio." Greg Asher, a computer science graduate from the University of Cincinnati, and TCS' first local hire, exclaimed, "I'm just thrilled ... this means a lot to the local community."

The move is good news for TCS, as well. Having been the subject of much criticism from individuals concerned about protecting jobs in America, the move to Clermont County shows that the firm is doing something to combat job flight from the U.S. (The company also received a nudge in that direction due to rising salaries in India and increasing difficulty in obtaining visas for workers in that country.)

But it's more than that. The move is also part of a new global sourcing strategy among Indian IT giants (TCS' competitors Wipro, Infosys and Satyam are showing similar growth patterns). According to an April 2007 article in Financial Executive magazine, those companies are seeking to gain a sustainable competitive advantage by utilizing global resources to create new revenue channels and find new ways to reduce costs. They're doing this by entering new markets, accelerating time-to-market, increasing product development and expanding their global infrastructure/geographic presence. Companies following this trajectory are now being referred to as global service providers, which emphasizes the distinction between those companies and those that are solely focused on low-cost staff augmentation.

The new TCS facility in Ohio will serve as a delivery center for the firm's North American clients, and will hire mostly local employees over the next three years. Sounds like a pretty good deal all around.

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