By Andy McCue, 24 January 2006 12:35
NEWS
Indian IT companies will build on their offshore outsourcing base and go head-to-head with traditional western IT firms for more "onshore" contracts in Europe during 2006, according to the UK's National Outsourcing Association (NOA).
In its predictions for 2006, the NOA sees the emergence of a global delivery model where the offshore Indian suppliers either open up European centres or acquire European IT services companies.
That will allow the Indian companies to compete for onshore contracts in the UK and Europe by developing a model that will split the services they offer between 60 per cent offshore and 40 per cent onshore.
Martyn Hart, chairman of the NOA, said: "Indian outsourcing providers are starting to think about the UK market from a western perspective. Companies are no longer in the solely onshore or offshore mind-set - they are more open to using a blend of sourcing options to achieve the best result."Just last week Indian supplier HCL Technologies fended off stiff competition from two UK and international IT companies to win a £150m outsourcing deal with high-street electrical retailer Dixons Group International.
Businesses will also start to use offshore outsourcing in a more targeted way, moving away from a "whitewash" approach to choosing specific locations for specific functions, according to the NOA.
Africa is also predicted to emerge in 2006 as a viable offshore location for some services with fledgling industries in Ghana, Kenya and Nigeria joining the booming South African business process outsourcing market.
Hart said: "As people use outsourcing in a more targeted and bespoke way, so outsourcing programmes become more successful."
Comments
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1. Guy Kirkwood
Indian outsourcing companies could compete with the global technology firms. But, the key challenge that Indian firms will have to tackle will be to gain the ability to enter the doors of CEOs and CFOs as well as they now talk to CTOs. Outsourcing business is more brand name oriented than any other business and to build a brand that can operate on the business and IT side of the deal is going to take more than crowds of engineering graduates from Bangalore. It requires client facing groups able to tackle ambiguous, non-structured problems and though Genpact, Wipro and Infosys are beginning to hire European professionals, they have a long way to go. I predict that only through merger and acquisiton activity will this be achieved.
2. Chris Goodman
Apart from the moral outlook and the drain on the nation gdp, the outsourcing of jobs to India, etc, appears to make economic business sense.
The obstacle is, quite naturally, the accented and no English pronunciation of the language. The customer calling a Company expects to get nothing stronger than a Scots accent speaking "British English" rather than a strange accent speaking an even stranger and somewhat unintelligible English.
Companies that outsource should try harder to find countries with similar low labour costs where the primary language is British English or even American English. And these do exist!!!