Indian user companies losing staff to outsourcers
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Indian chief information officers (CIOs) are finding it harder to recruit staff because of large-scale hiring by the countryâs outsourcing industry, a Gartner researcher said Monday.
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Offshore outsourcing&#39;s reigning champion, India, squares off against its upstart rival, China, on software quality, staff costs, advanced business skills and more. We also figure in a few top of mind questions for the IT manager who&#39;ll be traveling to his company&#39;s offshore provider once a quarter: Can I get a decent cup of coffee, and how long will I actually be on the plane?
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India's vital outsourcing industry, which relies heavily on the Internet, struggled to overcome supply disruptions Thursday after damage to undersea cables in the Mediterranean.
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Close on the heels of the&#160;appreciation of the Indian rupee against the dollar, Indian outsourcing companies are grappling with a new problem -- uncertainty among U.S. companies about a recession has made these companies delay finalizing their IT budgets.As a result many large deals between U.S. clients and Indian outsourcers will not be finalized in the first half of this year, said Sudin Apte, senior analyst and country head for India at Forrester Research.Business will however pick up for Indian outsourcers by the fourth quarter, particularly if the U.S. economy is in mild recession, Apte said.&quot;Our experience is that if the IT budgets of U.S. customers are marginally impacted in a recession, then there is an increase in business offshore, to cut costs,&quot; Apte said. If the cuts are too large, whole projects can however get canned, he warned.The U.S. is the largest market for Indian outsourcers.&quot;We believe that the recessionary nature of today&#39;s economic climate will promote the adoption of increased outsourcing,&quot; said Siddharth Pai, a partner at outsourcing consultancy firm, Technology Partners International Inc. (TPI) in Houston, Texas.TPI does not as yet see a cut in either discretionary or non-discretionary spending on IT by companies.Forrester said Monday that the IT services and outsourcing market will increase by 4 percent this year to $162 billion from a growth rate of 6 percent a year earlier.&#160;The research firm forecast slowing growth this year&#160;for purchases of IT products and services in the U.S.National Association of Software and Service Companies (Nasscom), a trade organization in Delhi, however remains optimistic about the growth of India&#39;s outsourcing industry. The industry is optimistic of achieving its target of $60 billion in software and services exports by March, 2010, the association said Monday.In the fiscal year to March 31, the industry expects export revenues of $40.3 billion, up by 29 percent from export revenue in the previous year.Problems for India&#39;s outsourcing industry could get however compounded as its customers abroad have seen a drop in overall satisfaction and a drop in value for money from offshore outsourcing to India, according to a Forrester survey. India is still preferred as an offshore destination because it is the only country where foreign companies can&#160;hire staff in the thousands, Apte said.
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CEOs aren&#39;t taking the care that they should with their customers&#39; data when they outsource, according to a new survey of senior management.
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Shortage of IT skills and inadequate Internet service may lead Indian companies to look to U.S. and other countries for outsourcing.
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(InfoWorld) - Indian chief information officers (CIOs) are finding it harder to recruit staff because of large-scale hiring by the countryâs outsourcing industry, a Gartner researcher said Monday. Indiaâs top IT services providers, focused on the global market, are regarded as the best employers, and get the best IT staff in the country, said Partha Iyengar, research vice president at Gartner, in a conference call. Indian user organizations are hence finding it very difficult to attract and retain technical staff, particular in the middle management, Iyengar said. A large number of Indian and multinational services companies have set up services delivery operations in India, and hire staff by the thousands each quarter. The problem for user organizations may only get worse as outsourcing companies start hiring business line managers as well to build their vertical industry expertise, Iyengar added. As large Indian outsourcers grow in revenue by 30 to 40 percent each year, they will hire business managers from the banking, manufacturing, and retail industries, bringing business knowledge that can be integrated into their services offerings, he added. This movement of business managers from the user industry to outsourcers will make it more difficult for CIOs to complete projects, as companies will have fewer business staff available to participate in the project, according to Gartner. India is fastÂ emerging as a key marketÂ in the Asia-Pacific region for outsourcing contracts, according to outsourcing consultancy firm, Technology Partners International Inc. (TPI) in Houston, Texas. Of the total value of contracts awarded in the region last year, Indian customers accounted for 24.8 percent, TPI said. That puts the country ahead of China with a 4.4 percent share, but still behind Australia at 32.4 percent and Japan at 26.8 percent, Peter Allan, a partner at TPI said Monday. Faced with shortage of staff, Indian user organizations are looking to outsourcing IT functions. But Indian outsourcing companies have not shown great interest in this business, as they are more focused on more lucrative business abroad, Gartnerâs Iyengar said. Multinational service providers like IBM andÂ AccentureÂ have bagged some of the larger contracts, but that still leaves a large number of Indian companies with smaller outsourcing contracts, who canât find a good service provider, Iyengar added. Indian IT spending is growing at a five-year compound annual growth rate (CAGR) of 14.8 percent, the highest in the Asia-Pacific region, to over $36 billion by 2009, Gartner said. This increase comes from rising expectations from businesses for IT to play a larger role in growth, efficiency and competitive advantage, it added.
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Indian professionals, venture capitalists (VCs), and entrepreneurs of Indian origin helped promote India as an outsourcing destination, according to a study conducted for the World Bank Institute in Washington, D.C., by Evalueserve Inc., a business intelligence and research firm.
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The city of Hyderabad in the southern Indian state of Andhra Pradesh has attracted a number of large multinational companies to set up software, services, and product development operations. The city, which has the headquarters of Indiaâs fourth largest outsourcer, Satyam Computer Services, also has facilities of other Indian outsourcers, and multinational technology companies like Microsoft and Oracle.
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Commerce One and Manugistics cut staff, as software makers grapple with industry upheaval.
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Kenyans face challenges as they play catch-up in the global explosion of outsourcing, an industry that India and other countries have turned into major job generators.
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General Electric is selling a 60% stake in its business process outsourcing subsidiary in India, for about $500m (Â£270m). GE was one of the first multinational companies to outsource back-office work, datacentre
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Company outsources e-mail for small to medium businesses.
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THE SINGAPORE Government has decided to reverse the world-wide outsourcing trend and ship some work to HP. Singapore&#39;s ministry of manpower has transferred IT staff to Hewlett Packard under an outsourcing contract.
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India&#39;s IT services market is forecast to grow to $10.73 billion by 2011, at a five-year compound annual growth rate of 23.2 percent, as outsourcing emerges as a more favored option for companies in India, according to research firm Gartner.As companies are finding it more difficult to hire and retain staff in their IT departments, they are looking at external service providers as an option, hoping to also cut down costs, and better manage growth in the process, Gartner said Tuesday.Indian user companies compete for staff with Indian outsourcing companies and Indian operations of multinational companies, which hire new staff by the thousands each quarter.Staff attrition is however not the key reason why companies are outsourcing, said Arun Gupta, chief technology officer, at Shopper&#39;s Stop, a top Indian retail chain. Driving outsourcing in India is a growing demand for new technologies and applications. Shopper&#39;s Stop has six IT projects in progress with another 12 projects planned for the next six to 12 months.Rather than creating and managing a large IT organization in house, the company is working with service partners to support its 45 IT staff, Gupta said. Some of the functions it outsources are network maintenance, desktop and server maintenance, monitoring enterprise resource planning (ERP) applications, and software development, he added.A number of large banks and telecommunications service providers are already outsourcing key IT operations, though the key winners so far have been multinational services companies. Many Indian outsourcing companies had neglected the Indian market in favor of exports, according to a survey last year by Gartner. But that may be changing as the&#160;weakening dollar puts pressure on rupee&#160;realization from exports.IBM,&#160;Tata Consultancy Services (TCS), and Wipro together accounted for 26.1 per cent of IT services vendor market share in India last year, according to Gartner. IBM was the top vendor, with 11.2 per cent market share. TCS and Wipro occupy the second and third positions with 10.9 and 4.1 percent market shares, respectively.However, the Indian IT services market is still fragmented, with the majority of the market being serviced by smaller local players that account for close to 40 per cent of the IT services market, according to Gartner.&quot;We have looked at smaller players for very small and specific jobs, but for larger jobs, running into a number of years, and which require a variety of skills, we look at large Indian companies or multinational services companies,&quot; Gupta said.The key segments of the Indian IT services market are hardware maintenance and support, software support, consulting, development and integration, IT management, and process management, Gartner said.
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In San Diego, displaced employees might affect production at some of the companies you own.
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ERNST AND YOUNG&#39;S the Global Information Security Survey is just the latest to survey senior management&#39;s cluelessness when it comes to IT and are far too trusting when it comes to Indian outsourcing, it alleges.