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Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta (Part 2)

Posted on Saturday, Apr 2nd 2011

Sramana: Where in the Midwest did you establish operations, and how did you know Colin Chapman?

Neeraj Gupta: When we decided to explore the low-cost domestic sourcing model, we spent three months looking at different locations in the U.S. We talked with various state governments. In 2009 there was a lot of debate about job creation. We talked with folks in Austin, Texas, and in Columbus, Ohio before we ended up in Michigan. When we were in Michigan, we were introduced to the local economic development team called SPARK.

We did not originally think that Michigan would be an ideal location as the impression we obtained while we were in Silicon Valley was that of a manufacturing center. Once we got there and talked with people in economic teams and some of the universities, we became convinced that Michigan was the right place to establish a center. We got our state grants in place. In the process of doing so, we had to find a leadership team there.

Within 10 days of making the decision to establish a center in Michigan, we attended a CIO conference in Detroit. We met with Colin at that meeting who was in the process of leaving a company. I had previously done some brief work with Colin prior where he was the VP of IT. This was an opportunity because of the location and our business strategy. He was in the process of accepting a different job, but we were in the process of convincing him that this was a better play for us. He recognized this as a transcendental opportunity to create a competitive advantage for the U.S. workforce.

Sramana: What drew you to Ann Arbor?

Neeraj Gupta: It is 20 minutes from the Detroit airport, but it has the cachet of the University of Michigan. The education and healthcare there is a significant advantage.

Sramana: It is a very, very good university.

Neeraj Gupta: That was a critical factor for our decision, and we do have a very good relationship with that university. As we build our centers we wanted to do scalable centers. We did not want to be in a location where we could not have at least 1,000 people. We are in the process of building that business, and we have a seven-year tax incentive there. They rebate 4.35% of our total wage and health bill back to us. The supply is good and we have workforce development advantages. We expect the supply and demand in the local market to be healthy into the future.

Sramana: Are you hiring primarily local people?

Neeraj Gupta: That is the case. Our strategy is to hire from the local workforce. People are graduating from master’s or bachelor’s programs from local universities. We also do some lateral hires and have brought in people from other parts of the country with specialized skill sets.

Employees in today’s IT industry face a large amount of globalization. There is a lot of flux in determining what exactly should be handled by internal IT and what should be outsourced. Most IT workers who are not working for a core R&D effort are basically leading a nomadic lifestyle, especially in junior and mid-level staff. Our delivery model allows them to work for different accounts, but they have a career growth plan from a single location.

This segment is part 2 in the series : Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta
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