Indian IT Firm Opens U.S. Consulting Arm

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Amid an offshoring backlash, Indian software giant Infosys Technologies said it would open a business consulting practice in the United States.

Infosys Consulting expects to hire approximately 75 people within the next year and 500 people within the next three years.

Stephen Pratt, a Deloitte & Touche veteran, will serve as CEO and work out of the unit's Fremont, Calif., headquarters. Additional offices are slated to open in Boston, Dallas and Orange County, Calif.

Pratt's managing directors have held senior positions at Deloitte & Touche, Cap Gemini Ernst & Young and EDS. And it's against large consulting outfits like this that Infosys Consulting will compete.

Chelsea Hardaway, an Infosys spokeswoman, said the firm will focus on making its clients more competitive by focusing on "operational strategy and technology enabled transformations."

But that doesn't necessarily mean shipping work to Infosys Technologies in India. Some may, but that's not the goal, Hardaway said.

InfoSys' foray into consulting comes after IBM bought Indian call center operator Daksh e-services, a deal that could help Big Blue's market position as a provider of outsourced IT services.

The purchase price of Daksh is estimated at between $150 million and $200 million. The deal will extend the company's position in the region, where it is leveraging a local presence in the business outsourcing arena.

At the same time, there is also growing debate about the impact of the trend of U.S. companies sending programming work to India, China, Russia and other countries where the cost of skilled labor is cheaper.

A recent research report said that six years from now, one quarter of traditional U.S. IT jobs will be done offshore.

A few days later, a technology industry group released a study that concluded that offshoring of U.S. technology jobs will actually increase the number of American information tech jobs over the next decade.