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Indian firms find outsourcing hard

Jun 08, 2007 03:35 PM IST Business Business

Mumbai: The world may be turning to India for its outsourcing needs, but Indian companies don’t have it easy outsourcing to Indian technology providers.

One might think Indian companies should have it easy in outsourcing their I-T functions, as India is the technology back office of the world – just hop across the neighbourhood and hire a global outsourcer like TCS, Infosys, Wipro or Satyam.

But that’s easier said than done. A survey by Research firm Gartner has found that Indian companies aren't quite happy outsourcing to Indian technology providers.

“CEOs in India have highlighted their displeasure with their service providers and they have voiced that they are getting a second rate citizen treatment from their domestic services providers,” said Gartner Sr Research Analyst – IT Arup Roy.

Industry experts say Indian outsourcers focus less on India because the traditional labour arbitrage doesn't exist here.

But with a rising rupee denting the offshore advantage, they may soon have to do a rethink.

Older players like TCS say newer I-T companies could better margins through high-end work for Indian clients.

“Not many are focused in India. Between TCS and CMC we have 12.5 per cent of the market share, which is more than $500 million. So I think there should be an effort to educate them and move them up the value chain,” said TCS Head - India Biz S Venkatramani.

Till that happens Indian companies will either have to settle for second hand treatment or take their business to similarly priced foreign I-T firms in let's say Singapore. But that would be a lose-lose solution.

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