India Inc. Sees Outsourcing Surging to Nearly 20% Annual Growth
February 9th, 2010Source: HinduBusinessLine
With anticipated recovery in IT spends and a positive outlook putting the sector on a high, Indian IT honchos said that achieving growth rates of 18-20 per cent in the coming years would be “quite possible”.
“It is possible for the Indian industry to move to a 20 per cent growth rate if we are able to overcome some constraints. In fact as the industry has set itself a target of $175 billion (in exports) by 2020, we will have to look at such growth rates,” Mr Ashank Desai, Founder of Mastek said.
However, India would have to move quickly on issues such as infrastructure, education, power among others, he added. Mr Desai also did not want to comment on the timeframe for the industry to go back to the 20 per cent growth numbers.
Most of the top industry representatives attending the summit seemed upbeat about industry growth trajectory.
Mr …
The Nearshore Shift Picks Up Speed: Major Outsourcers Pursue Advantages
February 9th, 2010By Jacob Cherian
News reports say that Indian outsourcing giants, Infosys, TCS and Wipro are likely to fall prey to nearshore rivals, like Israel-based Ness Technologies, Softtek of Mexico, and CPM Braxis of Brazil.
Major outsourcers like Citibank and GEO are now leaning toward nearshore, specialized vendors instead of offshoring work to distant locations like India. These clients are now looking at emerging outsourcing centers like Latin America that is closer to home as favored destinations for outsourcing, reports the Times of India.
Jimit Arora, Research director at Everest Group was quoted as saying, “Some customers having 70-80 per cent of their offshore resources in India are realizing that they need to look at the third category of suppliers that are local and niche,” in an online report by SourcingFocus.com.
New Study Says Demand for Outsourced Services will Accelerate, Driven in Part by Nearshoring
February 5th, 2010Outsourcing providers around the world predict that demand for their services is expanding rapidly, and they are adding staff and investing in new services to meet expected growth, according to a new survey from Duke University’s Offshoring Research Network and PricewaterhouseCoopers (PwC).
- Overall, 62% of service providers said they plan to expand the scale
of their existing offerings.
- 70% of outsourcing deals in 2008 were renewed at the expiration of
the first contract, down from 72% in 2007.
- Unrealistic client expectations and the lack of a client outsourcing
strategy were the top reasons for contract terminations.
- “Near-shoring” has gained momentum among companies using or
considering outsourcing services.
- Legal services outsourcing is growing at a rate of 40% annually in
India, with about 110 legal services providers in the country. The
Philippines and Sri Lanka provide 20% of legal outsourcing.
- Only 16% of …
Get Ready for BPO 2.0: A Revolution that will Lead to Lower Outsourcing Costs says Forrester
February 3rd, 2010The outsourcing vendors make another run at the BPO market by adding a standard software “platform” underpinning the BPO offering. By adding such software platform to their people and process expertise will cut costs for clients by an additional 20 to 30 percent on top of the 15 percent to 20 percent savings of a traditional BPO solution, said Forrester.
The report, ‘Platform BPO: Process Outsourcers Take A New Approach To Traditional BPO’ by Forrester VP and Principal Analyst, John McCarthy, states that over the next 24 to 36 months, the emergence of a range of platform BPO offerings gives BPO clients a more compelling savings and innovation option in the space. McCarthy, a veteran outsourcing-offshoring analyst who first predicted that 3.3 million white-collar American jobs would shift offshore to countries such as India by 2015, terms it as the BPO 2.0 arrival.
“Over the past two years, the seeds have been …
Outsourcing Providers Often Lack Strong Middle Management
January 29th, 2010Middle management just isn’t what it used to be.
The old definition of a middle manager—those senior staff in charge of overseeing the details of day-to-day management and reporting to top management—is too narrow, says Leslie Willcocks, Professor of Technology Work and Globalization at the London School of Economics (LSE) and head of its Outsourcing Unit. In today’s complex and global business environment, middle management is the “glue that holds organizations together,” Willcocks says.
At outsourcing companies, middle managers are even more important, responsible as they are for working externally with customers and suppliers and internally with senior management. At offshore outsourcing firms, they require an ever greater mix of skills, including the ability to build virtual teams across organizational boundaries, countries and cultures. Indeed, effective middle managers at IT service providers must be simultaneously coordinators, knowledge repositories, social capitalists, and change agents, say Willcocks and Catherine Griffiths, co-founder …
Obama Talks Tough on Outsourcing US Jobs, But the Real Target is US Corporate Subsidiaries
January 28th, 2010SOURCE: NEWS.OUTLOOKINDIA.COM
In a move that could shake the foundations of India’s IT services industry, US President Barack Obama today said he will end tax breaks to American firms that ship out jobs abroad.
“To encourage… Businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America,” he said in his first State of Union address.
A report by IT consultancy firm Forrester Research estimates that 3.3 million American jobs will be lost to outsourcing in 15 years ending 2015. Already, half of the Indian IT-BPO industry’s USD 71.7 billion revenue comes from the US.
According to Gartner, Indian BPO vendors will command 10 per cent of the total global market share by this year end.
Obama said: “Now, the House has passed a jobs bill …
Backed by Big Indian Firms, Lobbyists Fight Anti-Outsourcing Attacks
January 25th, 2010Melanie Carter-Maguire and Robert Hoffman are regulars at Capitol Hill, rubbing shoulders with lawmakers to try and influence events at the centre of US power. But the two lobbyists have perhaps their toughest assignments yet, as they brace to drum up support for their companies on immigration and outsourcing, high-strung issues in the US after the Great Recession.
Ms Maguire, who was hired by India’s third-largest software exporter Wipro last week, and Mr Hoffman, who joined as first vice-president of global public policy last year at Cognizant, another top IT company, have been entrusted with pushing their companies’ cases in a key market where the public outcry against outsourcing is getting shriller by the day.
India’s $60-billion technology services industry, which has had a largely uninterrupted run in its key market, has recognised that political lobbying is the need of the hour to educate local lawmakers about the economic benefits of outsourcing, …
Wipro Posts Strong Quartely Numbers, Lifted by Global Outsourcing Recovery
January 20th, 2010Indian outsourcing firm Wipro Ltd underscored the sector’s recovery with an upbeat outlook and forecast-beating quarterly profit, as a global recovery boosts demand from key financial clients.
India’s No. 3 software services exporter followed bigger rivals Tata Consultancy Services and Infosys Technologies in reporting a pick up, boosting investor confidence of a solid recovery from the global financial crisis.
Wipro added 4,855 employees, or about 5 percent, during the December quarter, its biggest pace of staff addition in more than two years.
“IT results have been good…and the commentary from the managements suggest that it is going to continue at least for the next 2-3 quarters,” said Jayesh Shroff, a fund manager at SBI Funds Management, which has more than $8 billion in assets.
The rebound in the export-driven sector’s growth, however, face risks from a firmer rupee, increasing staff wages, and growing competition from global rivals such as IBM (…
More US Small Businesses Join Outsourcing Ranks
January 15th, 2010Despite Barack Obama’s efforts to discourage offshoring by US companies, there is some evidence to suggest that now even smaller companies in the country are increasingly looking at outsourcing to regions like India to cut costs. And given that smaller companies would prefer to deal with smaller vendors to get the attention they seek, the beneficiaries are expected to be mid-size IT companies in India.
Aditi Technologies, which focuses on providing software services to companies with revenues of between $50 million and $2 billion, has seen a 300% increase in its sales pipeline in last two months, compared to the four months prior to that. The company said it had closed “multiple high potential deals” in these months.
Sonata Software recently won an order from a $50 million , 400-people company in Muncie in Indiana, the first time that this 25-year-old company has offshored work. B Ramaswamy, MD of …
TCS Reports Healthy Numbers, Indicating Rebound in Global Sourcing
January 15th, 2010India’s largest outsourcer, Tata Consultancy Services (TCS), reported Friday an increase in revenue and profit in U.S. dollar terms for the quarter ended Dec. 31, reflecting a turnaround in the offshore outsourcing market.
TCS said that its revenue had grown by 10.3 percent to US$1.64 billion in the quarter from the same quarter in the previous year. Its profit grew by 39 percent to $384 million.
The company’s results are in compliance with U.S. GAAP (Generally Accepted Accounting Principles).
The company’s revenue was down by 2.3 percent in the previous quarter ended Sept. 30, but profit was up 8 percent.
“Growth has come across the board, across geographies, and industries,” said N. Chandrasekaran, the company’s CEO and managing director at a press briefing that was also webcast.
TCS added 32 clients in the quarter, taking the total to 917. The company is also pursuing at least 20 large deals in the current quarter, …
