The Hindu Business Line : `Cos must offshore IT services if they get second-class treatment'

Mumbai June 14 Indian organisations facing IT skills shortages and "second-class" treatment from local service providers must consider offshore outsourcing to obtain high-end IT services, said Gartner Inc.

"Local service providers lack adequate focus on the Indian domestic market, widening the demand-supply gap by not allocating enough quality resources for Indian customers," said Ms Cohen, Vice-President and analyst for Gartner's IT outsourcing group.

"Service providers typically allocate the best resources to their global flagship customers that pay in dollars and yield better margins. This is particularly true with Indian service providers". "India is witnessing a severe shortage of skilled IT resources at all levels of the IT personnel chain," said Ms Cohen.

Local chief information officers (CIOs) are finding it difficult to manage the shortage of skilled local IT resources as internal business units become even more demanding in the area of IT requirements and schedules.

Demand for skilled IT personnel by initiatives like the Central Government's recent national e-governance program (NEGP) and resource hungry Indian offshore service providers are outstripping local supply, said a Gartner statement.

Higher provision

A recent Gartner survey conducted among more than 1,400 CIOs worldwide showed that IT budgets in the country had the highest growth of 16.19 per cent, compared with an average of 3.16 per cent in the rest of the world.

These challenges and market conditions require Indian CIOs to look beyond the limits of their own geographical boundaries, much like their Western counterparts. Gartner predicts Indian companies will increasing go offshore in their sourcing strategies, which will result in outsourcing deals offered by some Indian companies that include higher end parts of service (for example, design and architecture, and business consulting) delivered from other parts of the world.

"This global sourcing model will become business-as-usual for Indian organisations," said Mr Arup Roy, senior research analyst for Gartner's IT services market group

Singapore, Hong Kong

"Indian companies will increasingly source IT skills from nearby Singapore and Hong Kong. The market has already seen the first signs of this trend. For example, the Indian embassy outsourced its visa collection and delivery services to a US company. Many Indian IT firms with operations spread across the U.S. and Europe are now outsourcing a part of their administrative work locally."

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