Headcount at Outsourcing Vendors

Filed in archive Outsourcing Suppliers on August 14, 2008

Photo courtesy of iStockphoto, Damir Cudic

In a recent VNUNET.com article, a Gartner analysis showed that the big-three Indian outsourcing vendors, Tata Consultancy, Infosys Technologies and Wipro Technologies, while competing successfully with the global mega-players (IBM, Accenture and EDS), they are somewhat less productive, on a per-employee basis, than are these very same mega-players.

In part, it is possible that the different model - lift-and-shift (for the Indian vendors) versus absorb-and-integrate model of the global mega-players - is less efficient, particularly in the first few years. It may also be that near-shoring is more productive than offshoring for certain tasks.

This productivity gap may not be too big an issue - as long as wage disparity remains significant. However, it will become an issue if wages and costs in offshore locations begin to catch up.

For now, the Indian offshore vendors will need to look for ways to ratchet up productivity - perhaps through innovative technology solutions, perhaps through better internal management.