Galmont Spotlight

Going Rural for IT & Technology Job Creation
Why Galmont Is Trailblazing the Road Less Traveled

Last January, Duke University’s Center for International Business Education and Research (CIBER), in partnership with The Conference Board, published several noteworthy findings in its annual study on IT services offshoring. One of the most interesting points was an examination of offshoring’s cost-savings capabilities. According to the research, the cost savings businesses achieve by offshoring IT services has been falling steadily over the last five years. Hidden expenses—from up-front investments and vendor selection to legal fees, skills training, travel and more—along with rising labor costs in emerging markets continue to eat away at the cost advantages of offshore outsourcing. IT offshoring, as many businesses have learned over the past decade, is not the guaranteed bargain many businesses bank on when choosing to send IT work overseas.

As the cost-savings advantages of IT offshoring have diminished, the need for jobs in the U.S. has simultaneously escalated. High unemployment and continued economic turmoil underscore the urgency for technology, jobs and innovation to fuel our growth here in the U.S. At Galmont, we have long been advocating the idea that businesses need to keep more of their innovation work—and jobs—domestic. Nevertheless, cost is a factor that cannot be ignored as today’s IT leaders are tasked with finding more economical ways to operate while increasing innovation and business contributions.

It was a dual commitment to keeping more IT work in the U.S. while helping IT organizations strategically reduce their costs that led Galmont to pioneer rural outsourcing. If businesses are willing to send work and jobs to unfamiliar countries and distant lands where risks are higher and control and oversight are diminished, would it be so strange to send those same opportunities to low-cost Middle America? Galmont didn’t think so. If the hidden expenses that come with foreign offshoring can be eliminated and lower labor and operating costs achieved by moving IT work to rural locations, would businesses reconsider offshoring? Galmont was determined to find out.

In 2010, we established our first rural outsourcing center in Lexington, Kentucky, which has grown quickly in just 18 months. Though Lexington is a bustling Midwestern city, the cost of living and the cost of doing business are far below that of large U.S. cities and major IT corridors like Silicon Valley, New York City and Chicago. Galmont partnered with the University of Kentucky to build a feeder system for training, cultivating and hiring IT graduates. The goal is to create an enduring talent development program that will fill the local market with smart, well-educated computer science grads who have real-world IT skills that will help them compete in today’s knowledge economy. By 2015, Galmont’s rural outsourcing center will create 90-plus local IT jobs and infuse Kentucky’s economy with a $1.3 million investment.

Galmont’s rural outsourcing center already counts several leading businesses as clients, including Bally Total Fitness, NYSE Euronext, Chicago Mercantile Exchange and U.S. Cellular. For these businesses, Galmont rural outsourcing offers world-class testing and quality assurance (QA) teams and skills at costs that are competitive with today’s most reasonably priced offshore solutions. The location eliminates time zone issues that can plague blended model offshoring solutions and makes travel for training and on-site work easy and cost effective. Businesses across a wide-range of industries that have previously offshored, have now turned to Galmont’s rural outsourcing center to take advantage of the quick turnaround, superior technical training and easy and open communication that come with our Lexington-based testing and QA teams.

“Galmont’s talent and the testing processes in Lexington are very impressive,” said Guy Thier, CIO of Bally Total Fitness. “We felt the company’s rural outsourcing model not only presented an excellent price point with greater return, but also enabled us to keep jobs in the U.S.”

Two decades ago, the U.S. began losing manufacturing jobs in dramatic numbers and today our manufacturing strength is greatly diminished in the world market. Neither our economy nor our young people can afford a repeat of those losses in the knowledge and information technology sectors. The U.S. remains a powerhouse in IT leadership and innovation but we can only hold that position by ensuring good IT work, learning opportunities and affordable IT solutions remain here. At Galmont, we are determined to invest in U.S. innovation and talent, and we are proudly going rural to make it happen.

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Sincerely,

Jeri Smith
President & Founder, Galmont Consulting
jerig@galmont.com
ph: 312-214-3261

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