IT Outsourcing India

CHENNAI: Despite the global economic slowdown and bad publicity against the industry, India’s outsourcing sector would retain its high growth rate, says R. Chandrasekaran, president of Cognizant India, a leading global and business process outsourcing (BPO) company. The number of foreign companies outsourcing jobs to India is increasing geometrically, the industry leader said in an interview.

According to him, lower salaries, compared to the global standards, is the unique selling proposition (USP) of India. However, he added: "On the global GDP linked purchase power parity grid, India is the fourth country ahead of Germany, the UK, Italy, Canada etc, according to the listings of the International Monetary Fund (IMF) and the World Bank. Doesn’t that indicate something?" Chandrasekaran also expressed confidence that India would catch up with the global pace in the IT industry and technological advancement.

"From mobile telephony that helps us keep track of vehicles that ferry our associates from home to jobs, to application of RFID (Radio Frequency Identification), Nano and virtualisation methods, all in their infancy globally, our research is on a par with the world," he said.

Asked about the computer hardware prices, he said prices would come down further in two years as all "aspects of life will depend on computing per se" by that time. While he pointed out the crippling shortage of electricity in the country and particularly in Tamil Nadu, where Cognizant has units, Chandrasekaran said: "No matter what the world says, we are happy here. Further, shortages in some form or other are a global phenomenon."

Despite humble beginnings from a Tamil medium school, Chandrasekaran has built an empire whose last balance sheet showed an annual profit of $2.13 billion. Cognizant is the second company in India to have been accorded the honour of ringing the Nasdaq (US stock exchange) bell for the start of trade March 5, 2007. "In 2006, we grew 60 per cent but the rising rupee, the global slowdown and competition have trimmed it almost by half. Yet, our profits are close to $2.8 billion and we are India’s fastest growing services company in IT," Chandrasekaran said.

Asked about the company’s efforts to reverse brain drain, Chandrasekaran said he was one of those who started the process successfully. "Roughly 70 per cent of our top people are the best examples of reverse brain drain," he said.

Chandrasekaran said Cognizant was against making too many attractive offers to students before graduation as these result in dropouts.

"We invest in R&D in educational institutions, rewarding faculties for cutting-edge results and encourage systems of education like technical writing, content management, e-learning to prepare students for the future. Our collaborative ventures in Manipal have resulted in a new course in pharmacological methods," he said.

Asked about bad publicity against the IT industry, he said: "While our strict controls, sensitisation methods, constant monitoring have prevented any wrongdoing, some sections of the media play up minor aberrations as it’s fashionable to titillate underachievers by blaming the smartest guys and girls of India."

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

Indian IT services companies are losing their grip on the global outsourcing ecosystem, a new report has revealed.

Only 10 outsourcers from India made it to this year’s 50 best managed global outsourcing vendors for the 2008 Black Book of Outsourcing (PDF version), compared with about half in 2004. Nearly 25,000 outsourcing users participated in the Brown-Wilson Group survey, which ended in May.

The best Indian performers on the list were Wipro, Satyam and GenPact, which were ranked sixth, seventh and eighth, respectively. In 2006, five of the top 10 vendors on the list were Indian outsourcing service providers.

This year’s top honors went to Hewlett-Packard, which jumped from eighth spot in 2007. HP also topped the list of top 10 vendors for financial and accounting outsourcing.

Rounding up the rest of the global top five were all U.S.-headquartered companies–Perot Systems, CSC Unisys and EDS. The report indicated that the Black Book survey closed the day before HP announced its acquisition of EDS.

Indian dominance prevailed in the realm of business process outsourcing (BPO), with Genpact, Satyam BPO, Wipro and HCL BPO making up the top four vendors. Satyam also was placed fourth on the list of top 10 knowledge process outsourcing (KPO) vendors.

In a statement Tuesday, Satyam BPO’s CEO Venkatesh Roddam noted that the results as an affirmation of the company’s strategic perspective. "The categories in which we have been ranked this year–BPO and KPO–are the key growth areas that we have been focusing on and basing our ‘Specialty BPO’ positioning on," he said.

The 2008 Black Book of Outsourcing report singled out Infosys’ fall from the 50 best vendors list as "surprising". At No. 59, this year marks the first in five years that Infosys has failed to enter the top 50. It was ranked No. 10 last year.

Douglas Brown and Scott Wilson, authors of the report, noted that the company’s displacement was accompanied by "rising accounts of client discontentment".

They said: "Over a dozen major customers cited the fact that Infosys has not melded their consulting and service delivery well. U.S. clients cite a lack of American front office support with an imbalance of too much delivered from offshore."

Despite their slide, Indian players remain a major force in the outsourcing industry, and outsourcers in China are still nowhere close to replacing them. According to the report, Chinese outsourcing companies have failed to make the cut for the top 50 for a second consecutive year.

Brown and Wilson pointed out that despite highly skilled labor and solid infrastructure, "China is still risky" particularly in the areas of partnerships, business stability and distribution channels.

They said: "Revenues are increasing for China’s technology providers but hardly touch a fraction of the huge global offshoring market share.

"Based on recent client satisfaction outcomes, the majority of those outsourcing decision-makers will not rank China as their first choice for upcoming initiatives anytime soon. [They] currently agree that too many barriers exist for China to take India’s place as offshoring destination of choice."

Source : http://www.zdnetasia.com/