Friday, June 08, 2007

Indian cos looking abroad for outsourcing


The world maybe turning to India for its outsourcing needs, but Indian companies may soon have to look outwards. That is because most of them feel that they get a second rate treatment from IT companies.

A survey by research firm Gartner has found that Indian companies aren't quite happy outsourcing to Indian technology providers. Arup Roy, Senior Research Analyst - IT, Gartner, said, “CIOs in India have highlighted their displeasure with their service providers. They have voiced that they are getting a second rate citizen treatment from their domestic services providers.”

Industry experts say Indian outsourcers focus less on India because the traditional labour arbitrage does not exist here. But with a rising rupee denting the offshore advantage, they may soon have to do a rethink.

Older players, like TCS, say newer IT companies could better margins through high-end work for Indian clients.

S Venkatramani, Head - India Business, TCS, said, “Not many are focused in India. Between TCS and CMC, we have 12.5 % of the market share, which is more than half a billion dollars. So, I think there should be an effort to educate them and move them up the value chain.”

Till that happens, Indian companies will either have to settle for second hand treatment or take their business to similiarly priced foreign IT firms. But that would be a lose-lose solution.