The Hindu Business Line : Outsourcing backlash a blessing in disguise for IT cos?

THE National Association of Software and Services Companies (Nasscom) may not want you to hear this, but all the election-time brouhaha over outsourcing may actually spare Indian companies a lot of slogging involved in marketing the country's IT prowess to US companies.

"It may be negative publicity, but it is working like an awareness campaign for us. We have already identified nearly 5,000 prospective customers for our company, thanks to the anti-outsourcing wave in the US," said Mr Vineet Narang, Vice-President (Strategic planning and business development) of Noida-based FCS Software Solutions Ltd.

Mr Narang said that the anti-outsourcing noise made by politicians in the US has helped to firmly establish the `win-win' situation for both Indian and US companies. Small US software development companies that employ 30 to 1,000 engineers are now more open to the idea of outsourcing both product development and services to Indian companies.

"We have to spread our risks. Everyone talks about bagging contracts from Fortune 500 companies. But they are not the only buyers of our services. Moreover, one must remember that such contracts can be lost more quickly than they are acquired and 1,000 jobs can vanish overnight," he said.

Another software start-up, when contacted, said that while there is no denying that the benefits of outsourcing are being recognised by the US companies, the market is "very hot" and such contracts depend a lot on quality of work being offered. "Services will be sourced to lower cost economies, but relationships are built and strengthened over a long period. The Indian companies need to have strong domain knowledge and have to distinguish themselves in order to forge strong relationships with their clients," he said.

Mr Anil Bakht of ESS Software Ltd said the "staying power" of Indian companies will determine their future. "The big are getting bigger and the small are getting wiped out. So the game is all about how deep a pocket you have as the profits are at least three years away," he said.

According to Mr Bakht, outsourcing is never for just 10 per cent of a company's process. And even a small company by the US standards will be more comfortable in a partnership with the bigger Indian companies as they cannot afford to take any risks.

Mr Narang of FCS agrees. He said that the US clients are real "hard-nosed" customers, who have a very intensive process of evaluation before they pass on the contract. "One of our clients even held informal interactive sessions with our team before they decided that they will partner us," he said.

Nasscom, the apex industry body, says it is better to leave outsourcing alone for the moment.

"We feel that enough has already been talked about outsourcing. As of now, we feel that any publicity on outsourcing will set off a chain of negative reactions in the election-bound US and will be counter-productive to our interests," a Nasscom spokesperson said.

More Stories on : Outsourcing | Outsourcing

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Outsourcing backlash a blessing in disguise for IT cos?

Ten, DD may go for out-of-court settlement

Global delivery model is working fine for Infosys — Nilekani lists challenges ahead

GMDC: A highly undervalued `disinvestment candidate'

First off the block after FDI cap hike — Hindujas seek nod to hike holding in IndusInd

StanChart opens global MF doors to India

Primary market raises Rs 17,665 cr this fiscal