Indian Outsourcing Market to Face Challenge
posted in Outsourcing News and Top Outsourcing deals |India is fast becoming a global center for back-office services as U.S. and European companies increasingly are shifting their IT services, call-center operations and other business processes to the sub-continent. India is looked at as an outsourcing destination by other countries as the cost of labor and content development is low. India has a good talent pool in animation and content creation.
The Indian IT-outsourcing market is already changing, and market analysts point to some dark clouds on the sector’s horizon. Massive IT services firms and global IT-consulting firms that are based internationally are opening their own software-development centers in India. Similarly the large Western software-product companies such as Microsoft and Oracle are doing.
All these foreign branded companies will compete with Indian companies for local talent. Global IT services firms also compete for work against Indian companies that are trying to develop in Indian market. Eventually, the software-product companies may even encroach on some service areas. At the same time, customers are squeezing IT vendors–including Indian technology firms–for price cuts across the board.
India’s domination in the outsourcing market may be challenged as emerging destinations gain prominence with firms seeking access to skills, predominantly non-English languages, that are lacking in existing locations. Outsourcing is not only a matter of arbitraging low-cost labor. Providing low-cost, high-quality software-development service somewhat requires well-developed processes for managing large-scale projects in distributed locations.
Reorganization in the outsourcing industry benefits companies specialized in off-shoring, business processing and high-end consulting. Deflationary pressure continues to force the industry to restructure around low-cost delivery methods, improved automation and increased use of standardized elements according to America analysts.
Outsourcing in the current scenario includes work being done across a global network of multiple, offshore locations that deliver services at even lower cost. The move to a low-cost GDM is at the beginning of an evolution that is thought to take place during the next three to five years.
With suppliers shifting focus to expanding their talent pools in developing areas like China and Southeast Asia, Indian vendors need to improve account management, move away from technology-centric messages that often alienate business buyers and need to invest in vertical-specific skills.
