'India no more cost-effective destination'
The Indian IT/ITES vendors may have transformed the global market and are still the first choice for most US and European outsourcers, yet the industry should not take its position for granted.
By Sujata Dutta Sachdeva, TNN |
NEW DELHI: The Indian IT/ITES vendors may have transformed the global market and are still the first choice for most US and European outsourcers, yet the industry should not take its position for granted.
"The failure of numerous MNC captives in India has not gone down too well in the US. They feel India is not a very cost-effective destination any more. And this thinking may affect deals coming to India," says John C McCarthy, VP, Forrester Research. Indian ITES companies need to re-sell themselves both in the US and Europe once more.
The sub-prime crisis and the declining dollar will surely have an affect on investments in the US next year. This includes the IT budget of companies. And with many MNC captives not being able to sustain their India operations there is sure to be a backlash.
In fact, a recent study done by Forrester Research had broken the myth about captives. It found more than 60% of captive centres located in India struggling to cope and meet expectations. Lack of management support, spiralling costs, high attrition, and a lack of integration was affecting their growth path.
And this sure has not gone down too well. And the image about India has changed somewhat. Even thought there is still no real competition to the Indian industry, India should not take its position for granted.
"The failure of numerous MNC captives in India has not gone down too well in the US. They feel India is not a very cost-effective destination any more. And this thinking may affect deals coming to India," says John C McCarthy, VP, Forrester Research. Indian ITES companies need to re-sell themselves both in the US and Europe once more.
The sub-prime crisis and the declining dollar will surely have an affect on investments in the US next year. This includes the IT budget of companies. And with many MNC captives not being able to sustain their India operations there is sure to be a backlash.
In fact, a recent study done by Forrester Research had broken the myth about captives. It found more than 60% of captive centres located in India struggling to cope and meet expectations. Lack of management support, spiralling costs, high attrition, and a lack of integration was affecting their growth path.
And this sure has not gone down too well. And the image about India has changed somewhat. Even thought there is still no real competition to the Indian industry, India should not take its position for granted.
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