Financial Daily from THE HINDU group of publications
Thursday, Aug 04, 2005
Financial Daily from THE HINDU group of publications Thursday, Aug 04, 2005 |
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Info-Tech
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Insight Niche vendors emerging in India: Forrester `More pressure on clients to make smart choices' Moumita Bakshi Chatterjee
New Delhi , Aug. 3 THE maturing and diversifying Indian IT services market has resulted in the emergence of numerous qualified niche players, widening the ambit of choice beyond the top five Indian IT vendors. However, this puts more pressure on clients to look at issues such as managing remote sourcing relationships, evaluating human resource capabilities and assessing financial viability, says a recent report from Forrester. "The Indian IT services market continues to enjoy tremendous growth. Across industries and countries, more companies, large and small, are increasing their consumption of Indian IT service capabilities. So far, tier-one Indian IT vendors have been the primary beneficiaries of this massive growth. "But these vendors may not be appropriate for all classes of service and all classes of customers. Fortunately, the Indian IT services market is maturing, fragmenting, and diversifying — resulting in the emergence of numerous, qualified specialist players," a report by Forrester Research said. While the earliest providers in the Indian IT industry gained the most from the off-shoring boom, the maturity of smaller players and customers is changing market dynamics. "Emerging vendors can now more legitimately offer services to North American and Western European customers. For example, small vendors such as Aztec Software, ITC Infotech and Persistent Systems have developed more mature customer management capabilities," it said. The tier-one category comprises large vendors with multiple service lines in multiple verticals, along with offices and delivery capabilities in countries other than India and the US. These vendors include HCL, Infosys, Satyam, TCS, Wipro, and Cognizant. The report listed out Flextronics Software Systems, i-flex Solutions, Kanbay, L&T Infotech, Mahindra British Telecom and Polaris Software Labs as vertical specialists; and Aditi Technologies, Aztec Software, Hexaware Technologies, Ness Technologies, Persistent Systems and Symphony Services as research and development and support specialists. The report also listed Sapient, ThoughtWorks and Valtech as agile/iterative development specialists. Forrester, however, pointed out that the maturity and diversification of the Indian IT market had put more pressure on prospective customers to make smart choices on issues such as managing relationships, comparing specialities, choosing flexible vendors and maintaining control. It asked clients to evaluate the human resource capability of their prospective vendors. "There is very high attrition in the Indian IT service market today. Staff turnover delays projects, decreases customer satisfaction, and puts pressure on customers and their internal customers to spend extraordinary amounts of time on the knowledge transfer phase — which has to take place over and over again as new staff are introduced to old projects," Forrester said. Clients must also evaluate the financial viability of the smaller vendors to ensure vendor longevity.
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