How Indian Outsourcing Firms Can Evolve And Prosper For The Benefit Of Both Parties
Indian companies need to change the way they operate their business, as they reach both growth and maturity. Companies have to change their business strategies according to the need of the market to gain advantages. Business firms are going through different phases where sticking with a single business strategy is not practical. By considering this fact they have to be pro-active and adaptable to new circumstances. Research conducted by ISG has indicated an increase for IT related Indian Companies in the world market share of approximately 13% in comparison with the declination of about 7% for other business.
Image courtesy: freedigitalphotos.net
If you would look into last decade you may witness the fact that suppliers of India have considerably differentiated by offering different strategies to US clients. As a result it paved the way to availability of labor, at low cost compared to the UK and US. Here you would see growth of business in a linear way. It clearly assisted suppliers of India to grow speedily especially from 2005 to 2008. But the recession that started in 2008 had an adverse effect on Indian IT growth. As a result the annual revenue growth of Western firms was at 0.4% and Indian companies growth rate was at 16%. This might be due to the process of maturing of market, revealed by ISG. Even in this context the changing trends will result positively on India centered firms by reinventing them.
Mr. Sid Pai, president of ISG Asia Pacific asserted that India–based firms have to develop Core Software especially for particular industries. He said the Indian companies need to start developing core software for particular industries rather than platforms that sit in the periphery of businesses. An example would be the creation and use of core banking methods for finance companies. He indicated there are already strong examples of this system with companies like Infosys and TCS. They possess their own unique banking platforms, but he added that there is not enough. IT would help attain non-linear growth with revenues by rising revenues at higher rates compared with costs.
Mr. Pai has indicated that the variables of falling prices, cloud computing and automation are few examples of the pressure on traditional outsourcing models like time and materials to innovate. He also mentioned BPO as another growth sphere. He also pointed out that Indian firms have to give birth to specific BPO services based on industry. Geographical expansion is also considered as a necessity for the suppliers of India to travel beyond their prime markets in the UK as well as US.
Indian suppliers are basically more mature especially in their evolution but the truth will be less acceptance of their validity by the rest of the world. If you would look at Europe and the US, you may find that the traditional players are more constant in comparison with the offshore suppliers.
Business is always run by challenges. Challenges lead to growth. Outsourcing firms in India are facing challenges to maintain a consistent growth in the wake of new business trends. But let us hope it will be a new beginning to make a huge positive difference to all aspects of outsourcing business in India.