Indian IT firms eye $6.5 Billion Belgian deals

Bangalore: Indian IT firms TCS, Infosys and Wipro are exploring offshoring and back office projects in Belgium worth $6.5 billion from firms like AXA, Dexia Bank, Belgacom, UCB (drug maker) and car insurer Allianz, reports the Economic Times.

This year, customers in Belgium will spend around $1.8 billion on infrastructure management outsourcing, $2.6 billion on application development and maintenance and about $2 billion on BPO, according to an outsourcing advisory firm Quantum Step.

"We have recently started discussions with some Indian suppliers for pure offshoring of our ERP maintenance it would be fair to assume that until last year, we were not prepared for any such initiative," confirmed an official at one of the biggest Belgian enterprises.

As a number of Indian offshoring firms are looking to hire more local European sales professionals and project consultants, it makes out that now customers only want to deal with Indian offshore experts. "Many outsourcing dialogues these days are being spearheaded by Indian offshore delivery managers, unlike in the past when some local expert would help us gain entry into an account, the CIOs are specifically asking for Indian suppliers," said a top executive at one of the Indian IT firms pursuing outsourcing contracts in continental Europe.

TCS has informed that the company's early investments in the Belgian market are now bringing dividends. "Belgium represents one of the more mature markets for us within continental Europe. After 15 years of operations in the country, we hold a significant share of the market and are now a prime IT partner to some of the largest BEL20 companies," said AS Lakshminarayanan, Vice President and Head, Europe, TCS.

"Our strategy to invest in localised delivery centres in Europe, particularly the ones in Eindhoven and Luxembourg, fuses well with our global network delivery model," he added. The company has around 700 professionals working for Belgian customers with 200 working onsite. InBev, AXA and Belgacom are TCS' top customers in Belgium.

"The key European markets opening up for offshoring include BeNeLux, Nordics, Germany and France. Most of the European companies are more or less first time outsourcers. Some big multinationals had offshored previously such as ABN Amro, Ikea, Nokia and Philips. However, this did not trickle down to regional customers as many of them felt that there was cultural mismatch. Also, to a large extent, Indian providers also did not focus on this market," said Sridhar Vedala, Expert, outsourcing firm Quantum Step.

BASF AG, the world's biggest chemical company, Euroclear, Europe's largest settlement firm, and Anheuser-Busch InBev, the world's biggest brewer are looking at offshore outsourcing for the first time as they seek to lower their operational costs and cope more effectively with a new fall in demand of their products and services.