IT Players Shrug Off Backlash

Chennai | Updated: Apr 26 2004, 05:30am hrs
John Kerry, the presumptive US Democratic presidential candidate, might not like the latest bit of news on the Indian IT service market. According to a recent report from research and consulting firm Forrester Research, the Indian IT market continues to grow dramatically despite the political backlash against outsourcing in the US.

During the fiscal year 2004, software and services exports witnessed an overall increase of around 30 per cent. This growth was far in excess of that experienced recently by global providers, who were growing at a single-digit rate or even shrinking in some cases, the report said.

Citing reasons for the increased growth of the Indian IT service market, the report said that the IT market in India had diversified and expanded to include non-application related services. Indian IT companies now offer everything from applications support to infrastructure management to various flavours of business process outsourcing (BPO), it said.

Also, the market has matured by leaps and bounds. In addition to covering a broader range of services, many of the IT players now offer value-added services that ease the transition to outsourcing or improve an organisations ability to effectively outsource. Skills like relationship management, organisational change management, and customer advocacy are now part of some vendors portfolio of skills.

The report said that skills like mature relationship management will act as the differentiating factor among the major offshore players including Infosys, Wipro, Cognizant, Tata Consultancy Services (TCS), Satyam and HCL Technologies.

In the context of relationship management skills, the report ranks Cognizant and Infosys in the top category. According to the report, Cognizant can point with pride to high customer satisfaction and a reputation for flexibility among its clients. The company is known for its excellent customer relationship disciplines, including its pioneering use of American nationals for key customer relationship roles in North America.

Again, Infosys, one of the largest and most successful of Indian outsourcers has demonstrated mature relationship management skills in dealing with its large North American client base.

On the flip side, players like Satyam and Wipro lag behind their peers in relationship management skills. The report explained that Satyams strategy of having strong partnerships with large global players has left the company in the position of a subcontractor, which doesnt encourage Satyam to develop its relationship management skills.

While TCS because of its size and staff augmentation history has to work on its relationship management capabilities, Wipro though it is improving its relationship management disciplines still lags behind the world-class capabilities of Cognizant and Infosys.

However, despite the impressive growth of Indian IT companies, the report noted that several factors like alternatives from smaller competitors in India, competitors in other geographies, and the fact that leading global integrators are moving into the Indian market challenge the continued dominance of leading Indian suppliers. Leading Indian firms are mindful of the long-term threat and are seeking to expand their geographic footprints to serve both global and local customers, the report said.