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The IT bandwagon is rolling, hop on
As outsourcing gallops, skill supply and resources to respond become crucial
RAGHUVIR BADRINATH
Bangalore, 28 December
IBM is recruiting. Hop on,' said a large hoarding mounted on a van as it tours various parts of Bangalore city, reflecting the mad rush to secure talent as the IT outsourcing wave reachŽes a new high. To explain this phenomenon, industry experts are debating what has been the definitive shift in the software industry over the past year and trying to gaze ahead for this sector.
The lesson emerging from the experience of 2005 is that India has the opportunity to mainŽtain its dominance of the outŽsourcing space if it can susŽtain the massive growth needed in the global-ready high-end workforce to support the scale of services required to be deŽlivered. This can be achieved by re-allocating financial resources to the already strong educaŽtion system. Said David Perla, co-founder & CEO, Pangea3, a KPO provider. "The major drivŽer to bid out business in the sector remains cost, but the maŽjor driver to closing that busiŽness is now quality of services and sophistication of service of- ferings. Lower cost/lower valŽue services are being commoditized quickly, and large transactions are now being closed based on the highest quality vendor."
This value system will gain increased acceptance as the softŽware industry is witnessing a sharp shift from cost arbitrage to value arbitrage where globŽal companies are taking a longer-term, more strategic view as they realize that they need access to both global markets and the best talent in the world in orŽder to remain competitive.
Said Nandan Nilekani, CEO, Infosys: "Over the years, the scope of global IT sourcing has ex-panded to include business processŽes and companies are increasŽingly realizing significant benŽefits from offshoring, making it a strategic imperative. GoŽing forward we will see more firms that will become global, and those operating in the globŽal arena will become more diŽverse, both in size and origin." This, he said, will increase the demand for resources and competitive pressures will force companies to rethink their sourcŽing strategies to exploit global resources. "Technology will conŽtinue to spur the creation of more global movements, which may also emerge as a robust force in international affairs and with further integration of India, ChiŽna and other emerging countries into the global economy, a larger and younger talent pool will become available," he said. In the current business enŽvironment, investments for fundŽing business change are more needed than ever. There is a comŽpulsion to achieve higher return on every dollar of investment and clients are looking for more in terms of business alignŽment, flexibility and predictability, the key enablers of business innovation. They want to plough back resources into building new business capability. As a result they are looking for service partŽners who off er high quality busiŽness solutions with predictable execution capability.
Added MukulAgrawal, counŽtry manager, Unisys India: "ComŽpanies that already run successful global sourcing programs are finding more arid more business areas where they can leverage global sourcing and are conŽtinuing to expand their offshore operations."
Having seen India's "specŽtacular success", several other developing countries from Asia, Eastern Europe and Latin AmerŽica are now aggressively proŽmoting global sourcing, which has added to the overall moŽmentum. 'These drivers will continue to operate in 2006 and with more vigor."
The major lever has been the ability of the sector to use technology as an enabler to delivering increasingly sophisŽticated and previously unseen services, while no longer selling simple technology as the end soŽlution itself.
