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Vishwanath Kulkarni

Cost competitiveness, vast talent pool big draw

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Bangalore Feb. 16 Till recently, an offshore delivery operation in India was the largest outside of the US or Europe for many a global IT services firms. But as these IT vendors continue to expand their presence here, India has emerged as the main offshore location for several firms, thereby accounting for an increasingly higher proportion of services delivery.

For several firms, up to 60 per cent of their global services delivery happens from India these days. A large delivery presence in India, where the cost of services are still significantly lower than in Europe and the US, is crucial to any IT services firm.

Underscoring the importance of India in Accenture's Global Delivery Network CEO, Mr William Green, during a recent visit to the country said his company would add 8,000 people to increase headcount to 35,000 by August, thus making it the largest delivery centre in terms of employees, ahead of the US.

One fourth of Accenture's 40 global delivery network centres are located in India, thus making it vital to its delivery operations. The company has 27,000 people in India accounting for 19 per cent of its global workforce.

For UK-based vendor Xansa Plc, India accounts for more than 60 per cent of its global delivery efforts. Xansa has grown its India operations to 5,000 people from about few hundreds in the past three years and expects to double it to 10,000 in the next three years, said its Chairman and CEO, Mr Alistair Cox.

Xansa plans to invest £25 million over three years to scale its India operations, which at present accounts for 55 per cent of its global headcount of 9,000 people. "While we continue to grow our operations in UK and Europe, we will grow our operations faster here," Mr Cox said. "India was key to Xansa's global delivery model," he said adding the company enjoyed a cost advantage of between 40-60 per cent by leveraging the talent pool here.

Attracted by cost competitiveness and the talent pool, the global vendors including IBM, EDS, HP among others are seen ramping up their presence here despite battling challenges such as wage inflation and high attrition.

On the other hand, the home grown IT multinationals such as TCS, Infosys, Wipro are also expanding their operations aggressively.

LogicaCMG has located half its over 6,000 global services delivery resources in India. Logica has been adding 1,000 employees-a-year for past three years to increase its headcount to 3,000 and expects to sustain the hiring momentum, sources said.

Cap Gemini's recent acquisition of Kanbay International has increased its employee base in India to 12,000, making it the second largest country in the Cap Gemini Group accounting for 18 per cent of its global workforce. By 2010, Cap Gemini expects to have 35,000 employees in India constituting about 30 per cent of its global workforce of over 90,000. Similarly, Atos Origin plans to triple its headcount in India to over 5,000 in three years.

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