RSSIndia is now Offshoring
Whenever those two words have been used together the connotation has been very different than in this case. Yes India is the offshoring capital of the world, Bangalore has become part of the standard vocabulary for most people globally in business.
But strangely Garner seems to think there is a new trend in place, the trend of Indian Companies outsourcing / offshoring work to nearby countries and exploring the global sourcing models.
"This global sourcing model will become business-as-usual for Indian organizations," said Arup Roy, senior research analyst for Gartner's IT services market group. "Indian companies will increasingly source IT skills from nearby Singapore and Hong Kong. The market has already seen the first signs of this trend."This global sourcing model will become business-as-usual for Indian organizations," said Arup Roy, senior research analyst for Gartner's IT services market group. "Indian companies will increasingly source IT skills from nearby Singapore and Hong Kong. The market has already seen the first signs of this trend.
The important point to note in this context is that in a recent Gartner survey conducted among more than 1,400 CIOs worldwide, showed that IT budgets in India had the highest growth of 16.19%, compared with an average of 3.16% in the rest of the world. Well ofcourse they have a much lower base from which they are growing but nevertheless the general trend is that IT budgets of Indian Companies are becoming quite respectable.
But they face their fair share of challenges, which are
1. Talent Retention - In house is always going to find it challenging to retain talent from the clutches of the IT Service providers with their lure of fatter pay packets and opportunities to trot the globe.
2. Lack of Focus of Local Service Providers - The Large Service provider houses don't seem to be focused on the Indian market, at best they look at it as a training ground for their staff before they can be moved to those lucrative onsite engagements. A case in point is that Indian Telecom industry, this industry has strongly adopted IT Outsourcing (post here), but the bulk of the business has gone to a single vendor - IBM, none of the India HQ companies (No longer can we make the the distinction between the service providers as India based, As IBM,Accenture etc have a Significant presence here too)
"Local service providers lack adequate focus on the Indian domestic market, widening the demand-supply gap by not allocating enough quality resources for Indian customers," said Linda Cohen, vice president and distinguished analyst for Gartner's IT sourcing group. "Service providers typically allocate the best resources to their global flagship customers that pay in dollars and yield better margins. This is particularly true with Indian service providers".
Gartners recommendations to CIO's include:
1. Need to Develop innovative programs for retaining the talent they have.
2. Look at Alternative sources such as hiring from small and mid-tier cities.
3. Training should be given a lot of importance, with companies investing into it.
4. evaluate staff augmentation from all parts of the globe. Creating a sense of competition among local vendors increasing their focus on local opportunities.
5. Tier 2 and tier 3-level Indian service providers should be considered for their key capabilities in various aspects of IT delivery. The right provider can provide domestic resources and perhaps a higher level of attention to issues and demands.
Source: 1
Tags: gartner - cio - india - offshore - IT - IT+Services
