New Delhi: It`s advantage India in IT application outsourcing. A research by Forrester has revealed that global outsourcing will become the dominant form of IT delivery by 2012 and Indian IT firms are all set to steal the show from multinational companies in the application outsourcing space as well.
While there has been a hue and cry in the United States over the offshoring of thousands of tech jobs to India over the past couple of years, research shows that the BPO story is only in the "first five minutes of the first quarter of a football match". Tens of thousands more American IT jobs are going to head overseas in the next few years.
While Indian outsourcing firms like TCS, Wipro, and Infosys have been enjoying torrid growth rates - routinely posting year-over-year quarterly revenue gains in the range of 40 per cent to 50 per cent, research firm Technology Partners International says all Indian vendors combined still owned just about 6 per cent of the global market as in 2006.
In fact, recent studies show US firms are spending only 1.9 per cent of their outsourcing budgets on offshore services.
According to the Forrester study, global outsourcing will become the dominant form of IT delivery by 2012. "Outsourcing is now viewed as more than just an available tactic," Forrester researchers Andrew Parker and Tom Pohlmann point out.
The Forrester report also points out that after emerging as one of the best global low-cost service providers, Indian IT firms are now stealing the show from multinational companies in the application outsourcing space as well, the study reveals. Applications outsourcing has been an exclusive domain of MNCs for some time.
However, currently Indian firms are gaining rapidly, with global firms increasingly relying on third-party vendors to optimize and streamline their businesses, the study said. Indian vendors have mastered offshore support during the past 10 years and their growing traction is resulting in an accelerating showdown with global players in the application outsourcing space, the study says.
This means after remaining the backwater of the overall outsourcing market for long, applications outsourcing has today emerged as a highly strategic business. Besides being a significant opportunity on its own, it has also become crucial to sell various IT and BPO services, which is prompting all the vendors to invest huge money in this business segment, Forrester said.
And, Indian suppliers are winning larger applications outsourcing deals that were once the province of the MNCs in this head-to-head showdown, the report says. While the overall size of applications outsourcing deals is getting smaller, Indian firms are adopting a different philosophy by eyeing modest-sized chunks of business carved out from larger overall deals, the report said.
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