Outsourcing to India will increase: Gartner

By siliconindia   |   Friday, 27 September 2002, 07:00 Hrs
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India will benefit further from US companies as more and more decide to migrate to the offshore model, said Rita Terdiman, research director for Gartner. She was speaking at the ongoing NASSCOM-GARTNER seminar.

MUMBAI: India's IT sectors earns over three-quarters of its revenue from exports, which touched $7.7 billion in the past year to March. More than 60 percent of that comes from the United States. Exports are forecast to rise 24.6 percent to $9.6 billion this year according to the NASSCOM, which co-sponsored the seminar with Gartner. Business process outsourcing (BPO) involves services like payroll management, accounting and claims processing from third parties using high-speed telecoms. A growing number of multinationals and local Indian firms are entering the field. Financial, insurance, healthcare and manufacturing companies were those interested in outsourcing business process services to India, Rebecca Scholl, a senior analyst at Gartner USA, told Reuters. "The pipeline is growing now. Over the next 12-18 months many of these deals are going to start getting real," she said. Other BPO destinations include Mexico, Canada, the Philippines and some Caribbean islands, but India had an advantage over the others because of its IT skills, Scholl said. Terdiman said the interest in India outsourcing was growing as the top tier Indian vendors are becoming better known. Key Indian service providers such as Tata Consultancy Services and U.S.-listed Infosys Technologies Wipro and Satyam Computer Services are looking to greater offshore outsourcing to boost revenue. Their export growth slowed to about 29 percent last year amid the economic slowdown and lower tech spending, from 50 percent annually a few years ago. Terdiman said Indian software firms needed to widen their services offerings and target higher value contracts if they wanted to become global end-to-end service providers. Scholl suggested Indian firms invest in understanding client culture better and focus on delivery of the BPO service than on marketing.

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