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 outsourcers are starting to hire again on a major scale, in a sign that the IT downturn may have passed.

Tata Consultancy Services (TCS) said that it plans to hire 25,000 people this year, acknowledging the end of a slowdown for Indian outsourcers that started with the collapse of Lehman Brothers last September.

Indian outsourcers are starting to hire again on a major scale, in a sign that the IT downturn may have passed.

Tata Consultancy Services (TCS) said that it plans to hire 25,000 people this year, acknowledging the end of a slowdown for Indian outsourcers that started with the collapse of Lehman Brothers last September.

The firm posted total revenue of around $6 billion (£3.7 bn) and said it hopes to pass the $10 billion (£6.1 bn) mark in the next few years.

TCS vice president Tanmoy Chakrabarty explained that the company wanted to add 25,000 to its current 145,000 staff by the end of the year.

The hiring plans come after a long period of inactivity, and the announcement will boost the IT recruitment scene, according to analysts.

However, it is unlikely that TCS will hire the new staff if it does not see a huge expansion in projects in Europe and North America. So far, Indian outsourcing has not relied on its domestic customers that much.

If this is the case, IT workers in the US and UK might be a little more nervous about their jobs.

Source : http://www.v3.co.uk/

The recent economic turmoil has had a varied impact on various industry sectors in India. Even within a particular sector, there has been little Top IT Cos uniformity, with different companies performing differently in response to the slowdown. Of India’s 500 largest companies, there have been quite a few upsets over the past year, as many companies slipped a few ranks due to the ongoing economic turmoil.

These performances were influenced by several factors like sensitivity of a sector (and the related companies) to the overall economic slowdown and the sector’s dependence on exports. Sectors like metals, auto and real estate have been hit harder than others like FMCG, power and telecom.

IT sector, the blue-eyed boy of many investors, portfolio managers
and traders, is also going through a turbulent phase. The sector, which receives around 80–90% of its revenue from the US and Europe, went through a very difficult phase after 2001, thanks to a recession in Western countries, especially the US and Europe. In the recent economic slowdown, many top-tier clients in the US and Europe—Lehman Brothers, Bear Stearns, Nortel and General Motors—declared bankruptcy or closed shop.

While the growth in the number of new projects has taken a back seat, the depreciation in the rupee has helped Indian IT companies to some extent. It is interesting to analyse the effects of these factors on the ranking of companies in the IT sector, as this sector has been a major driving force in the growth of India Inc.

The sectoral ranking (based on total consolidated revenue) indicates that most top IT companies have managed to retain their ranking of the previous year. As a result, slower topline growth was visible across all tier-one companies and their relative position remained almost constant.

The top three companies—Tata Consultancy Services (TCS), Wipro and Infosys—retained their positions at number one, two and three respectively. This means the negative impact of the economic turmoil in the West was felt equally by almost all top Indian IT companies. The sample includes 31 IT companies chosen out of India’s 500 largest companies.

The companies in the top 10 positions on the sectoral ranking list remained unchanged from last year, with the exception of Teledata Informatics. The company was replaced by Mphasis, which moved to the seventh rank from its eleventh place last year.

The main reason for this was the almost 50% decline in the revenue of Teledata Informatics. Other companies which improved their ranking among the top 10 include Redington and Tech Mahindra. Both these companies reported around 16% growth in their annual revenue for the year ended March, 2009.

The biggest upsets in the ranking were visible among the small and mid-sized IT companies. More than three-fourth of the 11 companies that moved down the ranks were small and mid-sized companies, which only goes to show the tremendous impact on companies in this category has not been uniform. This list includes First Source Solutions, Sonata Software, Cambridge Solutions, Hexaware Technologies, CMC, Mastek and Zensar Technologies, among others.

Similarly, there are nine companies which improved their ranking this year, as compared to last year. The companies on this list are uniformly distributed across different categories—small, mid- and large-sized companies. The list includes companies like TechMahindra, 3i Infotech, Rolta and Mindtree, among others.

In total, 11 companies maintained their ranking from the previous year. Some of these are TCS, Wipro, Infosys, Patni Computer Systems, Oracle Financial Services Software, Tulip Telecom and Polaris Software Lab, among others.

Overall, however, the number of companies which maintained, improved or slipped the IT sector ranking have been almost equal. For instance, out of the 31 companies in the sample, 11 companies maintained their ranking while 11 moved down the ranks.

If we have a look at the entire industry per say, two companies from the IT sector made an exit from the list of India’s 500 largest companies. These two companies are Satyam Computer Services and Financial Technologies. Similarly, three companies—ICSA India, HOV Services and Infotech Enterprises—made their debut into this list this year.

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

The outsourcing industry has brought jobs and prosperity to India - but, asks Saritha Rai, at what cost to workers’ well being?

The cheery, chatty voice at the other end of your customer care helpline may be a stressed-out, sleep-deprived and depressed twenty-something in Bangalore.

As many young people in India’s outsourcing industry are beginning to discover, underneath the heady promise of an exciting job, a good paycheck and attractive career prospects lie long spells of night shifts, ruthless targets and the dreadful monotony of writing code or pacifying angry customers.

The outsourcing industry has long been hailed as a key driver to India’s rise as a global economic power. Now, that growth is beginning to take its toll on its workers who labour for long hours in stressful work environments to meet tight deadlines for customers thousands of miles away.

Workers are suffering from obesity, sleep disorders, depression and broken relationships - problems which can lead to more serious conditions such as diabetes or heart disease. In a country where a public healthcare system is virtually non-existent, overworked outsourcing employees could present a health crisis in the making.

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