November 11, 2004, 2:37 PM PST A new kid on the block promises to give offshore outsourcing a run for its money--by routing technology work to rural America.

Rural Sourcing is a start-up founded and largely funded by Kathy White, former chief information officer for health care giant Cardinal Health. White, also Rural Sourcing's president, has set up two facilities in Arkansas, has another center coming on line in New Mexico in January, and is in talks to open yet another facility in North Carolina.

The company can offer services such as application maintenance and Internet development for roughly 40 percent less than what other domestic tech outsourcers charge, White said. Rural Sourcing's fees are about the same as the overall cost of using an Indian outsourcer, she said--if you consider factors such as communication costs, travel expenses and inconvenience. "We think we're close to their total cost of ownership," White said in an interview Thursday.

The company has about 20 employees today. White hopes that number will grow to 50 to 75 by the middle of next year.

A key to Rural Sourcing's strategy is to work with universities, which can develop technology skills. For example, the company's facility in Magnolia, Ark., is located on the campus of Southern Arkansas University.

Rural Sourcing began pitching its services this summer and can boast of five major customers, including a large telecommunications company, White said. She said the companies haven't given their permission to be named publicly.

But that could change. After all, the concept of keeping technology jobs in the United States and helping often-depressed rural communities at the same time could amount to a public relations coup for a big U.S. corporation.

Rural Sourcing is a kind of crusade for White. She grew up in Oxford, Ark.--population 642.

"I believe in the people of rural America. I'm one of them," she said. "I think we'll shock a lot of people because we're going to be really good and low-cost. And we're going to be bigger than anyone imagines today."

If White is right, it will be good news for American techies–at least the ones in rural communities and those willing to move there.