An Indian Civilizational Perspective

Rising Wages will not affect Outsourcing to India!

Multisourcing: Moving Beyond Outsourcing to Achieve Growth And Agility

I had discussed in my last post that the outsourcing debate is on the wrong track! It is NOT about the cost at all. It is about scalability and efficiency foremost! Here is another opinion that finally sees that light!


Salaries for Indian IT workers are climbing an average 12% annually. As large U.S. companies such as IBM and Electronic Data Systems Corp. expand operations in India, some analysts and competitors contend that pressure on wages will only increase, and the top-tier Indian IT providers will become victims of their own success.

Bah humbug, says Stephanie Moore, an analyst at Cambridge, Mass.-based Forrester Research Inc. Moore pointed out that despite wage inflation, India’s three largest IT providers, Infosys Technologies Ltd., Tata Consultancy Services Ltd. and Wipro, enjoyed stellar year-over-year revenue and profit growth for the first quarter of the current fiscal year.

More to the point, the top-tier Indian providers will continue to take business from their onshore “legacy” competitors, Moore said, because they have created a new and improved delivery model for IT services.

“The popular press is currently touting a pending slowdown among Indian providers as they become victims of their own success, but the truth is that Indian firms will continue to grow — and not just because they are a lower-cost option,” Moore wrote in a report published Aug. 1. “These players will continue their growth path because they have caused a fundamental and structural change in the service provider/client relationship. Offshore providers have taught clients to expect transparency, efficiency and accountability in service delivery.”

I hae often compared the Consulting model of today with the Airline model of a couple of decades back. The tools and software is as easily available as the aircrafts are.. and so are the professionals who can be hired on contract – much like the pilots. It is no longer going to be enough to simply take off and land safely but do every in the fastest possible time and to the complete satisfaction of the customer at the lowest possible cost!

Ultimately Southwest will win. And Southwest is not about just lowest cost but the most efficient service! That is where the Indian companies win hands down. Why? Because no one knows the Indian market and working style as well as they do. What they lack is in the Western style functioning but they are developing very fast!


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