Indian IT firms' consultancy services likely to grow
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Indian IT firms' consultancy services likely to grow

By SiliconIndia   |   Wednesday, 26 November 2008, 11:00 Hrs   |    1 Comments
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Mumbai: Though fears of IT budget cut by firms exist there, consolidation in the financial market is likely to boost up the consultancy operations of major Indian IT companies in 2009. The service companies that facilitate business integration and efficient utilization of resources will make benefit out of M&A deals of troubled financial companies, reported The Economic Times.

"IT budgets may remain flat next year but clients are being prudent. They want to know how they can do more with less. For the same funds available, they are asking for more," said, R Chandrasekaran, Managing Director and President, Cognizant.

He pointed out that the current spate of business consolidation would lead to consulting opportunities for integration and off-shoring. He also mentioned that consolidation, integration and regulation are the key areas that throw up opportunities for the consulting business.

Indian companies started focusing on consultancy services as the next step for growth as many global IT companies have entered the outsourcing sector. Indian firms are trying for an amalgamation of IT consultancy practice with outsourcing capabilities.

Generally, Indian IT majors find very little revenue from consultancy services. TCS, India's top IT exporter generate only 3-4 revenue from this segment.

During the quarter ended September 2008, Infosys got 25 percent of its total revenue from consultancy and outsourcing services. It had reported five percent share of standalone consultancy segment in total revenue for the September 2007 quarter. The company is cautious about the future course of its consultancy division, but believes that M&A activities can aid growth.

M D Stephen Pratt, CEO & Managing Director, Infosys Consulting said, "We believe our consulting unit will take market share during the downturn as clients demand more business value for each consulting dollar."

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Reader's comments(1)
1: India can successfully make use of talented employees and cheap labor cost.
Posted by:Sukanya - 26 Nov, 2008