Source: Economic Times

While, most of India’s IT majors started-off and established themselves as services providers to Western firms, increasingly the appeal of lucrative deals the domestic market also offers has begun to attract.

And so, India’s domestic IT market is luring not only larger IT players, but multinationals, as well. Soon after, Infosys Technologies announced, it will be re-considering its strategy to remain focused on IT services and BPO exports, Mastek, another Indian software firm is considering doing the same. A mid-size IT solutions and services player, Mastek has set up a separate business unit alongside, which is intended for sole servicing of the domestic market. In addition, an experienced professional, with a career spanning 22-years has been recruited to head it and ensure a focus on domestic IT needs.

Entering the domestic market for a second time, the Rs. 700-crore Mastek started out as an IT products firm in the 1990s, when nearly 70% of its revenues came from the domestic market. Later on, however, it reduced its focus on the Indian domestic market IT needs and diversified into services and solutions. Currently, less than 1% of its revenues come from the Indian market.

Just as, Infosys has been selling its core-banking product Finnacle in India, Mastek too is marketing its insurance solution Elixir, country-wide. “We are the leaders in channel management in India – we have 7 of the 15-insurance firms in India as our customers,” says CMD Sudhakar Ram. However, now the focus will be on services and solution offers for the domestic market, including targeting a 10% increase in domestic revenues, over the next 3-years.

While, catering to domestic clients will de-risk its geography mix, as currently Mastek is highly dependent on UK, Ram says it is to be in direct touch with the end customer that is one of the drivers behind the move. “The Indian market will give us direct exposure to the customer which is not the case in the other markets, so the learning will be enormous,” he informs. As well, this will also allow Mastek to access the foreign parents of the some of the insurance companies functioning in India.

In keeping with this, Mastek’s domestic business unit will initially focus on the insurance and government verticals, later extending to other service lines. With the government vertical its key revenue area overseas, Mastek intends to focus on the domestic front, as well.

Though, margins from the domestic market are expected to be only half that of 6 – 7% of international business, however, learnings from domestic projects will add up, giving higher leverage at company level.

With the rupee strengthening against the dollar, this could be expected, as outsourcing firms make up the shortfall in revenue by picking up domestic clients, of which there will be many, as India works towards its goal of becoming a technologically advanced nation.

Outsourcing involves transfer or share in management or the decision making of a business through a management from outside, which would involve a two way exchange of information, trust and business co-ordination between the outsourcer and its client.

The choice to Outsource is generally taken to lower cost of production, transmitting, safeguarding and developing the resources towards particular section of business which require more competencies, to make better use of skilled or unskilled effort, capital technology and energy. Outsourcing is a term relative to the organization of labor within and between societies.

Outsourcing is spreading its wings in many spheres. Chiefly, IT outsourcing or software outsourcing has become rapid sources of business in the present era. India has been termed as possessing a lot of advantages for the overseas IT services as compared to the other outsourcing destinations. India has a lot of software outsourcing companies to offer low cost and competent quality.

The demands of the customers keep changing quite rapidly. In this rapidly changing scenario it becomes really difficult to cope up with the customers by onsite resources. The cost is also one of the most important factors at the time of dealing with the local developer. Along with the cost, fluency on English language is also the most important advantage that India has over other outsourcing countries.

In the field of software services, India has sufficient technical and talented man power to meet the changing needs of the globe. There are lots of Software Outsourcing companies in the country along with the domestic as well as International Brand Names.
Rapid growth is also noticed in Indian Revenue due to the highly successful IT overseas business. Many of the international brand names are establishing their presence in India to take the advantage of its expertise in software outsourcing.

In the summary of success of the country, the increasing demand of Software Outsourcing to India globally comes in mention.