Indian tech firms eye $1 Billion U.S. contracts

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Indian tech firms eye $1 Billion U.S. contracts
Mumbai: Indian tech majors Tata Consultancy Services, Infosys and Wipro stand to gain contracts worth about $1 billion in the next one or two years as U.S. banks emerge from the troubled asset relief program (TARP). JPMorgan, Goldman Sachs and Morgan Stanley that received approval to buy back government stake worth $68 billion earlier this year are among the firms seeking operational efficiencies by outsourcing non-core IT and back-office projects to India. American Express, Bank of New York Mellon and Capital One, which have also started repaying government debts, are also considering outsourcing some of their operations, reports Economic Times. Many of these banks had deferred new offshoring decisions, as they attempted to cope with TARP funding and internal restructuring of processes. Experts such as Andy Efstathiou, Director of Banking Sourcing Practice at research and consulting firm NelsonHall, say that the U.S. banks are now increasing offshoring activities. "Since the beginning of the economic crisis, many of these contracts have been put on hold. That is beginning to change. It is looking like the fourth quarter (Q4) of 2009 is shaping up to be 20 percent-plus over Q4 of 2008," Efstathiou said. The government's decision to allow these banks to repay TARP funds also reflects a growing pressure to operate independently, devoid of any political and public interference. In a September survey of around 480 firms by Efstathiou, only two percent said they plan to reduce offshoring, while almost 37 percent of the respondents said they will increase offshoring. "The financial services firms we have spoken to intend to increase offshore spending," he added. Merger among banking systems of Bank of America and Merrill Lynch among many other such transactions, is creating newer opportunities for offshoring and outsourcing vendors. As these banks merge, they face an uphill task of integrating their software applications, consolidating their datacenters and other trading platforms into a single entity, so that their customers are able to transact without having to face any merger-related issues. And since offshoring will help them save costs by 30-40 percent, these merged banking entities are seeking to partner with a vendor having significant offshore presence.

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