The Economic Crisis – and an Opportunity
This week, ZDNet published an article entitled "India's Outsourcing Bubble is Bursting" – describing the slowdown as it effects the IT Outsourcing labor market in Bangalore. While it doesn't appear that Bangalore is in the full throes of doom-and-gloom, the article points to key indicators of a slowdown – falls in housing prices, stabilizing salaries, and many more people looking for work.
The article points out, however, that the slowdown may have some positive effects on the outsourcing business – particularly a reduction in turnover. Furthermore, some are seeing an opening to better compete with the Accentures, IBMs and HPs of the world – not a far-fetched possibility as customers already accustomed to outsourcing get aggressive in looking for better deals.
The real key to competing with these companies is not in the back office, but the management infrastructure. Accenture, IBM and HP are expert at managing relationships, and companies have been thus far been willing to pay for that expertise. This is where the Indian and Philippine outsourcing companies have, frankly, fallen short.
Offshore vendors may want to look at this time as a time to invest in their US presences, rather than scaling back. True, it may be a zero- or negative- sum game, but the opportunity may be there to grab a far larger piece of the pie.
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Good article. Thanks for posting.
Comment by Johnnie Debt on October 3, 2008 10:13 am
To place on record, I completely subscribe to the thought of viewing this as a good opportunity for Indian IT Vendors. The tag that we have as the Back-office and as an affordable Technology hub must be leveraged best in this scenario.
During recessionary phase in the Western world, it is easy to be the lane of people who all say that the going is tough for IT vendors. Rather, it is important to notice the platonic opportunity here. It makes a lot of industry sense for a IT vendor to say that India outsourcing is one of the tested ways to sustain cost-advantage and thrive in uncertainties.
If IT / ITEs offshoring has always been to mitigate risk and gain cost advantage, it is the time to actually reap the benefits ouf it.
It is the time for vendors to re-assure confidence to the recessionary industries to standby them and support their cost/quaality/time/risk mitigation initiatives in testing time.
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Comment by Benjamin Frank on October 21, 2008 6:41 am
It’s true that not all the companies are facing a downturn in their business.
BPOVIA(http://www.bpovia.com), for instance, is expanding its business through the economic disaster.
BPOVIA is a promising outsourcing firm that leads the market in China.
Check it out yourself!
Comment by Daniel on November 17, 2008 2:42 am