Ciber Tries New Twist To Blunt Outsourcing

International IT services giant Ciber (No. 71 on the 2004 VARBusiness 500) is battling back at outsourcing, coming up with a new way to keep computer jobs in the United States and make some money at it, to boot. The company plans to set up at least seven application-development centers in midsize metropolitan areas, staffing them with lower-cost IT workers drawn from what it calls underutilized pools of tech talent, such as military retirees and new university grads.

The first of the centers, which the company calls "CIBERsites," is being built in Oklahoma City. Four to six additional locations throughout the United States, starting with a center in Florida, will open during the next 18 months, says Mac Slingerlend, Ciber's president and CEO.

"We wanted to create an alternative so corporate America would not have to send work overseas," Slingerlend says. "I am trying to create something good for the country and good for our company."

The success of the centers will hinge on whether they can compete with outsourcing sites, such as those in Bangalore, India, where salaries are a fraction of those in the United States, enabling those operations to underbid domestic IT houses on development work.

For its part, Ciber thinks the numbers will work. The total annual salary and benefits packages for workers at the CIBERsites will range from $30,000 to $40,000, the company says.

"That allows us to charge approximately $35 per hour to our clients, which compares to about $25 per hour for similar work done in India, not counting the hidden costs of offshoring," Ciber notes in a fact sheet on its project.

"Though CIBERsite employees will be paid less than the national average, they will still earn more than their overseas counterparts," says Tim Boehm, who will run the CIBERsites operation. "Our clients will have another choice in avoiding the hidden costs of offshoring, such as language gaps, intellectual-property protection, travel, time schedules, infrastructure vulnerability, political risks and increasingly high employee turnover.

To get the ball rolling, Ciber says it has $30 million in prospective new contracts lined up. That will enable it to create approximately 200 new jobs in Oklahoma City and upward of 1,000 new jobs throughout the United States during the next 18 months.

Ciber also sees opportunities for public-sector contracts. Slingerlend points out the many government IT contracts mandate that development work be done in the United States, so centers such as his should be able to pick up work that can't, by law, go overseas.

VARs might see in Ciber's approach something worth considering, Slingerlend says.

"If you're a VAR, the question you might ask yourself is whether you could make or assembly in the United States something that's currently done overseas," he says.