Indian outsourcing firms lag in infrastructure
Research says that Indian outsourcing firms have not been progressing. Reasons: Infrastructure services fall short; firms desist from making large capital investments and distance between supplier and client is more disturbing for their operations..
INDIAN OUTSOURCING firms have not made much progress in signing significant infrastructure deals. Research indicates that there are three primary reasons for this lack of success. First and most importantly, infrastructure services (other than help desk and desk side support) are a set of integrated, highly automated processes. The high levels of automation greatly reduce labour, which in turn nullifies the labour arbitrage advantage the Indian firms look for and have created in their business models.
Second, the Indian firms have resisted making large capital investments. Many, if not most, infrastructure deals require that the provider buy and/or supply significant amounts of hardware as part of the client solution.
Domestic providers are comfortable making large capital investments in leveraged infrastructure while most of the Indian providers remain hesitant. None of these problems individually create a huge obstacle, however, collectively they are difficult to overcome and this has not gone unnoticed by the Indian providers.
Ramesh Manghirmalani said, "Conceptually we believe that Wipro’s recent acquisition of domestic infrastructure provider Infocrossing is an example of how the Indian firms can successfully deal with the above noted disadvantages. And we believe that other similar deals are in the works."Finally, the distance between supplier and client creates several issues for the Indian firms. The cost of telecommunications is higher at long distances and the chance of failure is greater, desk side support requires a local presence and distance increases the chance of a force majeure event such as political turmoil, civil unrest or a natural disaster interrupting service. Infrastructure, unlike application development services, cannot withstand even short outages without serious impact on the client’s business. Together these issues add up to a significant issue.
Source : http://www.merinews.com/
