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"TPI believes that a surge toward multiple global locations will bolster the MNCs competitiveness while placing pressure on the Indian players."

New Delhi , Sept. 2

GLOBAL outsourcing advisory TPI Inc has said that Indian companies could soon lose their advantage in the global outsourcing market if they didn't expand their delivery capabilities and strengthen the focus on increasing productivity.

Mr Siddharth Pai, Partner and Managing Director, TPI India, said: "The cost advantage that Indian companies have is not going to last for long and then they will have to address the productivity issue. The other issue is that Indian pure play companies have not gone global and do not have the scale compared to MNC outsourcing companies."

As global operations grow mature organisations are indicating they are more likely to select a MNC service provider such as ACS, Accenture, HP or IBM over a regional pure player provider. "What was once a market dominated by the offshore service providers such as TCS, Wipro and Infosys has now become a hotly contested battle with MNCs delivering scaled offshore operations at very competitive prices. TPI believes that a surge toward multiple global locations will bolster the MNCs competitiveness while placing pressure on the Indian players," said Mr Pai.

TPI, the advisor to ABN Amro's $2.2-billion outsourcing deal, said though the deal was significant, the Indian companies stuck to the smaller part of the deal and did not go for the bigger parts.

The report concludes that global service delivery "offshoring" is expected to grow during the coming 18 months, particularly among companies with 3-5 years of experience. The findings are based on research compiled from companies of all sizes, with strong representation from organisations with annual revenues of more than $10 billion and covers a total of 65,000 global personnel.

Mr Pai said though the quantum of the outsourcing deals have come down from over $10 billion to around $6 billion, the market has become dynamic with the contract time period reducing from 10 years to about 6 years at present. TPI said the first half of the current year has been slow compared to the previous year.

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