Says Marc B Hebert, chief marketing officer of US firm Virtusa: With the sheer size, talent pool, adherence to the latest technologies, vision, volume, low-cost and high quality, Indian vendors are increasingly becoming more competitive vis-a-vis captive centres of multinationals in India.
He predicts that captive centres that lack brand, money, size and long-term strategy will wind up or merge with Indian partners or outsource from third-party vendors in India.
Agrees Anand Deshpande, chairman and managing director of Persistent Systems: For these captive centres, the quality of products, their timely release in the market, competitive pricing and flexible operations will determine their survival. In such a scenario, outsourcing/offshoring becomes strategic to the success of their business.
The cost of captive operations is substantially higher than that of third-party vendors. Besides, captives spend a considerable amount on hiring and infrastructure, ending up paying an expensive premium.
According to Praveen Kankariya, chief executive officer, Impetus Technologies, The success of the operations and survival remain bleak for those captive centres that do not achieve a threshold limit of employees.
Issues such as finding the right kind of infrastructure, managing attrition, meeting employees expectations, managing local government and legal aspects are too difficult to manage for these captive units, he adds.