Squeeze Play - Page 3 of 5

Squeeze Play

are simple: first, Washington fears potential political fallout if it begins offshoring. And second, Uncle Sam needs to use domestic companies to keep sensitive defense and security information within U.S. borders.

Washington’s determination to keep security information stateside means high-level contracts with agencies such as the Department of Defense will likely keep companies like Axiom Resource Management Inc. unscathed in the current offshoring rumble. The management consulting firm, based in Falls Church, Virginia, has developed solid footing with contract defense work in areas such as homeland security. “It’s simple,” says Renard Johnson, CEO of METI, a BE 100s computer support and engineering outfit based in El Paso, Texas. “In my opinion, there is no way the U.S. will ship out work with top-secret clearances.” As a result of contracts with military and government agencies, including the U. S. Air Force, the Department of Agriculture, and the Federal Aviation Administration, METI’s $55 million in annual revenues look to be relatively safe in the face of the offshoring onslaught.

Offshoring’s effect on the U.S. job market gets plenty of ink here at home. But often ignored is a growing countertrend: a rising backlash against offshoring is influencing companies to steer a large number of jobs back to domestic shores. And many black business owners are seizing upon this change.

Wilson caught wind of the backdraft with call-center contracts from major corporate clients. “We’re finding that some companies are realizing that U.S. customers can get frustrated with overseas h
elp or are conscious of job losses here when they call a help desk. As a result, many companies are starting to couple overseas operations with centers based here at home,” says Wilson. The end result of corporate adjustments to offshoring is a boost in Ryla’s revenues, which are expected to hit $7 million in fiscal 2004.

Wilson and others say that some firms that were once eager to ship large amounts of work outside the U.S. are now more selective. Last year, Dell Computers reversed its offshoring plans after funneling much of its customer-service work to India. The company brought much of that work back to the U.S. after sensing a backlash from American consumers that threatened to put a dent in its bottom line.

Interpersonal connections can also safeguard businesses from the offshoring vacuum, according to Wilson and other African American corporate executives. CEO Daniel Perkins of MTS Technologies, a BE 100S industrial/service company, says his firm’s emphasis on personalized support and face-to-face contact is key in the current offshoring climate. His company, with $200 million in annual sales, focuses on software development and desktop support, two lines of work that require face-to-face interaction. Perkins has a generalized concern about offshoring, but close contact with customers keeps his clients happy. “Our clients need for us to be nearby,” says Perkins. “Whatever applications and troubleshooting we do, we make sure there is a presence so our clients can see someone is reacting or concerned.”

David Steward, the chairman of top-ranked BE 100S service company World