IT Outsourcing India

An improvement in the overall business climate has prompted Indian outsourcer Infosys to raise its revenue and earnings forecasts despite posting a slight drop in quarterly profit today.

Revenue at the IT services firm reached US$1.15bn (AU$1.27bn), a 5.1 percent decline on the same quarter a year ago but a 2.9 percent increase on the previous quarter.

Infosys expects revenue to reach approximately $4.6bn (AU$5.09bn) for the full fiscal year, which signifies a one per ent drop on last year’s numbers.

While the results have surpassed Infosys’ own expectations, the company’s predictions for the future are rather conservative.

Reasons for this approach include the absence of significant market growth, high unemployment and currency volatility, said Infosys head of Europe BG Srinivas.

“The worse is likely to be over, but I will still view the future conservatively while being cautiously optimistic,” he said.

Infosys was reported to be chasing some 12 to 15 outsourcing deals worldwide. But Srinvas said the sales processes are taking longer than usual as clients focus on supplier consolidation and strategy reviews.

Infosys is still hiring 2,000 staff globally with a view to expanding its sales capability. The firm reported that it is hiring senior technology architects and business consultants.

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Indian outsourcing companies figure among the top ten worldwide in IT infrastructure services, reflecting the growing appeal of offshore delivery of these services, according to outsourcing consultancy Technology Partners International (TPI).

Indian outsourcers figured in the top ten by value of contracts closed in the first half of this year, not only in their traditionally strong area of application development and maintenance (ADM), but also in infrastructure services, Siddharth Pai, a partner at TPI, said on Thursday.

That Indian companies such as HCL Technologies and Wipro have made it to the top ten in infrastructure services, a relatively new area in IT services for Indian outsourcers, suggests that customers are now considering seriously the option of remote delivery of these services from offshore locations like India, Pai said.

Indian companies figured in the top ten last year in ADM but not in infrastructure services, according to TPI data.

TPI released its index this week covering the global commercial outsourcing market in the second quarter and the first half of this year.

The market for outsourcing has shrunk to US$40.2 billion in contracts in the first half of this year from $51.5 billion in the first half of last year. TPI monitors contracts of a value of $25 million and above.

It is unlikely that the outsourcing market this year will grow to last year’s level of $93.1 billion, and is more likely to end this year with total contracts of less than $80 billion, Pai said.

Top Indian outsourcers have reported flat or declining revenue in the quarter ended June 30. Infosys, India’s second largest outsourcer, has forecast that revenue for its fiscal year ending March 31, 2010 will decline by 3.1 to 4.6 percent over revenue in the previous year.

Source: http://www.pcworld.com/

MADURAI: The Indian IT industry, which has grown rapidly due to innovation and low cost products, has not reduced strategic investment despite Outsourcing cutting costs, Infosys Technologies Chief Executive and Managing Director S Gopalakrishnan said here today.

Addressing a session on ‘Role of Innovation in an Economic Downturn’, organised by CII, he said that IT industry was still on a strong footing and bound to grow with more investment in research and development.

"We invest more in new services, value additions, new solutions and products, so that even if they don’t pay now, they will pay later on. Though radical innovation is time consuming, it will definitely pay in the longer run," he said.

Though Indian Companies were focusing on process innovations, they should switch over to product innovations, he said, adding Universities should also focus on R and D.

Indian companies were also buying companies located in the developed countries. This also helped them market their products globally and would also help to accelerate growth. "They can be successful and make a significant impact if they focus on new products and innovations also," he said.

Gopalakrishnan said telecom and construction sectors, and the automotive industry are growing at a rapid pace in India despite the recession and were creating jobs and more business opportunities.

He suggested that the automotive industry should go in for next generation cars to protect the country’s ecosystem.

MADURAI: The Indian IT industry, which has grown rapidly due to innovation and low cost products, has not reduced strategic investment despite Outsourcing cutting costs, Infosys Technologies Chief Executive and Managing Director S Gopalakrishnan said here today.

Addressing a session on ‘Role of Innovation in an Economic Downturn’, organised by CII, he said that IT industry was still on a strong footing and bound to grow with more investment in research and development.

"We invest more in new services, value additions, new solutions and products, so that even if they don’t pay now, they will pay later on. Though radical innovation is time consuming, it will definitely pay in the longer run," he said.

Though Indian Companies were focusing on process innovations, they should switch over to product innovations, he said, adding Universities should also focus on R and D.

Indian companies were also buying companies located in the developed countries. This also helped them market their products globally and would also help to accelerate growth. "They can be successful and make a significant impact if they focus on new products and innovations also," he said.

Gopalakrishnan said telecom and construction sectors, and the automotive industry are growing at a rapid pace in India despite the recession and were creating jobs and more business opportunities.

He suggested that the automotive industry should go in for next generation cars to protect the country’s ecosystem.

On the telecom sector, he said there was scope to provide and improve telecom services.

Gopalakrishnan said India was in a better position so far in terms of economic growth as it was driven by people, unlike in China where it was government driven. Another advantage for India was its young population.

He also felt that the banking, insurance and the service sectors were under penetrated.

Source: http://economictimes.indiatimes.com/

The IT industry of West Bengal remains apprehensive about the impact of the Citu-sponsored industrial strike on August 20.

Most employees of IT companies operating from Sector V in Kolkata’s Salt Lake, the hub of BPO and IT companies in Kolkata, have been asked to come into office by 6am on August 20 and stay back overnight or till the strike is lifted.

BPOs and call centres, on the other hand, have made arrangements for employees to stay back after work tonight and leave only tomorrow after work.

Sector V houses some 300 IT companies. A few of the companies, which may not work or employees who may not turn up on Wedensday, will make up for it by working through Saturday and Sunday.

The state IT department, too, has not taken any measure to help employees reach their offices safely. Earlier, the department would issue stickers marked ‘essential services’ to the IT companies and vehicles that ferried employees.

But the department decided not to issue such stickers after some vehicles carrying the stickers were damaged by bandh mongers.

According to Debesh Das, IT minister of the state, people who do not wish to participate in the bandh will not be prevented. “Police and security arrangements of Sector V will be looked into by the administration and we are sure that no untoward incident will occur.”

It may be recalled that about a dozen party cadres heckled an IT employee, damaged the vehicle, which was ferrying the person home, and thrashed its driver for daring to venture out on a Left Front-sponsored bandh in June this year.

According to a spokesperson of Cognizant, "We have asked our employees who want to turn up on Wednesday to send request emails on Tuesday to the administration department. The department will organise cars to ferry employees before 6am on August 20. The employees will have to stay overnight or till the strike is lifted. The employees who will not make it on Wednesday will have to make up for it during the weekend."

Kalyan Kar, MD of Acclaris, said, "The state should not let bandhs affect the IT industry as we manage international clients who do not understand this concept of bandh."

According to Som Mittal, president of Nasscom, while the IT industry recognised the right of political parties to call bandhs or strikes, IT companies in turn expected politicians to understand the 24x7 nature of their business and compulsions of client deadlines.

Clearly, although the IT and ITeS sectors have been classified under ‘public utility services’ operating 24X7, the reality is far from this.

Source : http://www.business-standard.com/