'Outsourcing backlash benefited Indian IT sector'

Tuesday, 27 July 2004, 07:00 Hrs
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BANGALORE: The backlash in the West against outsourcing IT services to India has only served to create more awareness about this country's technical capabilities.

Apart from attracting global tech firms such as IBM, HP, Accenture and EDS to open shop in India to capitalise on low-cost high quality talent pool, the backlash enabled Indian firms to pitch for multi-million dollar deals with competitive edge, according to TCS executive vice-president Phiroze Vandrevala.

"During the last two quarters, we have seen a steady increase in our business growth from outsourcing and off-shoring," said TCS executive vice-president Phiroze Vandrevala here Monday.

"Global firms in the US and Britain have realised the cost and quality advantages of Indian tech firms vis-à-vis our peer players.

"Instead of a cascading effect on our offshore or onsite operations, the backlash has created greater awareness of our presence and more client visits from these countries," he contended.

Though the TCS has said in its prospectus for its initial public offering (IPO) that curbs on outsourcing or immigration in the US may adversely affect its profitability, Vandrevala ruled out any impact on the company's global operations from the backlash or proposed legislation in the US.

"As the US economy recovers and tech spending picks up, we are upbeat on sustaining the momentum to maintain the growth rates, especially after the US presidential elections due to our competitive edge and ability to provide end-to-end solutions across domains," Vandrevala said.

The Indian IT industry has matured enough to face competition from countries like China, the Philippines, Russia and others due to the sheer size of the talent pool, language (English) advantage and cost competitiveness, besides in-depth knowledge of the global tech requirements.

"We are well positioned to compete with any country in the world. The fact our global peers have set up shop in India to compete with us for the same pie of the IT services business has created a level-playing field. The battle is being fought on the same turf but on our (Indian firms') terms," Vandrevala disclosed.

Admitting TCS revenues from onsite projects were on the higher side than the industry's average, Vandrevala said the company would increase its offshore projects to strike a balance in its service offerings for maximizing operating margins.

Source: IANS
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