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With Indian IT service companies trying hard to grow and with international companies trying hard to defend their bases, Indian IT service companies will need to add greater value to their customers, said analysts.
Speaking to Business Line , Mr Karthik Ananth, Director, Zinnov Management Consulting, said that Indian IT companies, which had initially delivered only bits and pieces, had to now deliver on customer centricity.
Gartner report
“The IBMs and the HPs of the world did end-to-end consulting and the Indian companies offered advantages like agility and cost arbitrage.” Now, Indian companies needed to add greater value to compete with the international IT service providers, he pointed out.
A recent Gartner report said that IT service revenues increased 3.1 per cent to $793 billion in 2010. According to the report, IBM was the biggest gainer and had revenue of $56.4 billion and had grown by 2.6 per cent to command a total market share of 7.1 per cent worldwide. In comparison, India's biggest player, TCS, has revenues of $8 billion.
The competition will take place on value and not on pricing, said Mr Ananth. “IT services are not like selling soap. You are dealing with people and their salary expectations. Big players will not go the pricing route.”
And this could mean that, as the big IT services both in India and internationally compete, the mid-size companies could feel the squeeze. Mr Sudin Apte, Principle IT Analyst at Offshore Insights, said, “Only around 20 or 30 companies of the top 500 companies are doing well. The midsize companies are not able to offer any differentiation of services.” He said that India will have to deliver competency in verticals. “They have to move ahead in consulting and improve their ability to transform business.”
Global delivery
Mr Apte said that Indians have to snatch market share from MNCs.
“The MNCs offer what Indians are offering and there is more and more competition in global delivery. The MNCs are defending their bases,” he pointed out.
According to a survey shared by Mr Apte with media persons recently, many clients had expressed dissatisfaction with staffing issues and attrition.
According to this report, though clients are not happy, they still offshore because of budget pressures.
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