More architecture firms are offshoring. One California firm found outsourcing helped it cut fees by 30%
Even in Las Vegas, a city not known for understatement, the overhaul of the Tropicana Casino & Resort is grandiose. When the $2 billion face-lift is completed in 2010, the hotel will have more than 10,200 rooms, a new convention center and shopping mall, parking for 6,200 cars, and multiple pools. That's great for gamblers, but it's a big challenge for the architects putting all the pieces together. "It's like building three mega-resorts at once," says Jim Stapleton, vice-president of Cincinnati-based FRCH Design Worldwide, the lead architect on the project. Adding to the complexity, gaming tables and sections of the hotel will remain open through the renovation. Worse, it's happening at a time when U.S. architects are in short supply.
Time to call India. In a cramped office in Kolkata, some 8,000 miles from the Strip, dozens of Indian architects spend their days and often nights generating plans for the Tropicana. They work for Cadforce Inc., a Marina del Rey (Calif.) startup that is helping bring offshore outsourcing to yet another U.S. sector. All told, Cadforce has some 150 designers and computer technicians in India and 41 in the U.S. working on a new hospital in San Diego, private homes, fast-food joints, and more. "The tidal wave of interest has just begun in the last year," says Cadforce CEO Robert W. Vanech, a venture capitalist who founded the company in 2001.
Cadforce is one of a growing number of companies jumping into the business. The $29 billion U.S. architecture industry ships about $100 million in work abroad each year, Cadforce estimates. Some 20% of U.S. firms say they are offshoring, according to a survey by Harvard University and the American Institute of Architects (AIA), while an additional 30% are considering doing so. "Clients are demanding shorter and shorter turnarounds, smaller fees, and better details," says Harvard doctoral student David del Villar, who helped lead the study.
While the work isn't glamorous, many Indian architects say it's a great opportunity. Rather than developing complete designs, architects in these outsourcing shops tend to handle tasks such as turning schematic drawings into blueprints or making sure doors and pipes are aligned. These are essential jobs, but they're tedious and can take up 60% of the time spent designing a building. Nonetheless, 25-year-old Aditi Sengupta jumped at the opportunity to join Cadforce. "It's a chance to work with more space and nicer materials," she says.
Digitization is one big force driving the trend. More architectural firms are adopting sophisticated computer tools that allow them to render entire buildings in 3D, simulate stress tests, and track all construction materials. That makes it easier to work remotely—and requires tech skills that can be hard to find in the U.S. "The challenge isn't cost. It's understanding the processes and systems," says Michael Jansen, CEO of Satellier, a New Delhi-based group with 300 staffers doing work for half of the top 30 U.S. architecture firms.
JUST FOR NOW?
Not everyone is convinced the future of architecture lies offshore. AIA Chief Economist Kermit Baker thinks the outsourcing surge is largely the result of a cyclical talent crunch. He notes that the pay gap between U.S. and Indian architects isn't nearly as wide as in, say, software programming. Many American architects with 10 or 15 years of experience earn up to $60,000 annually—about four times what Indians take home. That compares with salary differentials of 8 to 10 times in software. "If the job market softens, there will be a lot less incentive to outsource," Baker predicts.
Still, many firms say outsourcing pays. Acres Group Inc., a firm in Pasadena, Calif., that specializes in fast-food restaurants, has been able to take on 75% more work by outsourcing some tasks to Cadforce. While Acres is saving money—President Robert Liu says he has been able to lower his fees by 30%—other factors are more important. "They do the most time-consuming, technical work," Liu says. "It allows me to do other things, like get more clients and concentrate on design."