Offshore is the way to grow, says Nasscom

Ashu Kumar in New Delhi

Realising the enormous offshore business potential and its advantages to the Indian economy, National Association of Software and Services Companies (Nasscom) has decided to shift its sales pitch from marketing Indian software skills to promoting India as a business process outsourcing destination.

The aim is to promote offshore software development as well as business process outsourcing by bringing more and more jobs to India.

The association has decided that the ongoing research being conducted with McKinsey will also focus on the strategies to be adopted by the Indian companies to woo more foreign companies to outsource their work to India.

Speaking with the The Financial Express, Nasscom vice president (Research) Sunil Mehta said the growth of offshore business in India would boost the growth of the entire economy of the country as other allied sectors will also grow simultaneously.

“The Nasscom-Mckinsey study which is currently being conducted to chalk out the strategies to achieve the projected growth in software and service exports will also focus on increasing the offshore business,” Mr Mehta said.

“There are two kinds of customers. The ones which are well-versed with outsourcing practices and are already outsourcing their work and others who have not done any outsourcing so far. The study will treat them as two different segments and will work out strategies to help Indian companies to adopt suitable approach,” he added.

Mr Mehta said the success of the offshore model had already been proven with a number of multi-national companies either setting up offshore operations or expanding the existing facilities.

“In fact, software exports by multi-national companies having offshore operations in India has grown by 38 per cent in the first half of this fiscal (April-September 2001) over the same period last year.
This is more than the overall software export growth of 33 per cent,” he said adding that the trends indicate the multi-national exports will grow around 40 per cent this year and will contribute to around 15 per cent of total software and service exports. This proves the fact that the offshore model is working to their business advantage, he added.

Quoting the leading US-based research company, Giga Information Group, Mr Mehta said offshore outsourcing will grow by at least 23 per cent during 2002. As companies struggle to do more with less, they will realise the quality and cost benefits that India has to offer. India will continue to dominate as the preferred offshore country and Indian vendors will continue moving up the value chain by offering architecture, design and high-level strategy services, he added referring to Giga.

Similarly, another research outfit Forrester Group has also predicted that the budget for offshore services would grow from 12 per cent of total technology budget to 28 per cent in 2003, he added.