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Infosys, TCS , Wipro outsource projects to smaller firms
By siliconindia
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Friday, 19 November 2010, 16:07 IST |
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Bangalore: Top Indian Technology firms have found a new way to deal with the rising inflation and attrition. Tech firms like Infosys, TCS and Wipro are sub-contracting projects to smaller firms as rising wages and attrition are choking the performance o f the company reports Pankaj Mishra from The Economic Times.
The projects that will be outsourced does not need complex programming expertise or understanding of a particular domain but requires some amount of dexterity which can be acquired or developed through training or experience.Another driver for hiring more temporary staff is that IT firms want to arrest their linear-people-led growth. The smaller companies are expected to get up to 5 percent of work from the biggies over the next few years.
"Some executives from our own company are proposing that they can launch sub-contracting business provided we give them assured business. We have started two pilots," said a senior official at one of the top five Indian technology firms.
Magna Infotech, which serves one of top multinational outsourcing firms, sub-contracting work is an important option as outsourcing to smaller firms means adding more staff to their payroll.The Indian contracted staff market is expected to become around $2.5 billion industry in five years.Moreover, temporary staffing helps in bringing down people costs by at least 25 percent.
Companies such as IBM have been sub-contracting projects to smaller companies such as Infinite Computer Solutions past many years giving out at least 15 percent of its work to professionals outside of its payroll.
For Anirudh Jain, a software programmer, working on a part-time, sub-contracted project means more flexibility. "There's no swiping the card business, no dealing with bureaucratic managers at the top. I now work for 8-10 months every year, and travel around for rest of the year." Jain said.
Contradicting Jain's statement Trishna Shankar, a software programmer again says "It's a good proposition as an entrepreneur. But as a professional, I would rather work with either an exciting start-up or an Infosys instead of some sub-contracting firm."
Although experts say that sub contracting would reduce the bench strength and additional resources that are not always employed in projects, sub-contracting to unknown vendors by primary contractors is a risk especially for companies dealing with banks. The clients are not very confident about outsourcing fearing that their data would be more vulnerable to breaches and exploitation of secured information is possible.