Friday, April 11, 2008

Europe wary of outsourcing to India

Source : Click

While Indian ITeS companies may be looking at Europe as a big market waiting to be tapped, are European firms as bullish about outsourcing work to India? May be not. While they may be interested in sending work to India, but are not confident to do so, says a new report by Forrester, Research, an independent technology and market research company.

Their latest report ‘Offshoring Strategies For Continental European Firms’, tracks the outlook of European firms to outsourcing work. It says, Indian offshore providers looking at expanding business in Europe must first change their risk-averse attitude and invest in building a sizable local capability to win deals there.

"Most pan-European firms are still not fully convinced about the offshore model’s suitability or benefits for their business, while offshore providers are yet to have enough capability in the continent," says Sudin Apte, senior analyst at Forrest. In fact, several European firms did send large teams to India in the last six months to test the offshore waters here, "However, these initiatives lacked a solid vision and strategy for the type of work to be sent and at what pace," Apte explains.

However, the good thing is these firms are becoming more interested in sending work as some Indian service providers are working furiously to improve their European capabilities. The report reveals that both Indian and European offshore providers have problems helping their European clients go offshore. While Indian providers still struggle to build up meaningful local presence, their risk-averse approach means that they won’t make even smaller local staff acquisitions unless they see a direct and immediate increase in their European sales books. "Clients we spoke to complain that the Indian firms they’ve worked with often fail to demonstrate commitment to the service levels promised," Apte says.

European firms on the other hand followed stringent and demanding procurement approach to offshoring and made unreasonable language fluency expectations from vendors.