Asia Pacific hedge against downturn for IT services firms

Peter Dinham
Wednesday, 29 April 2009 10:40

Business IT - Technology

Zakharov observes that European-centric companies have large revenue bases, but are negatively affected by foreign exchange fluctuations, internal restructuring and some divestitures.

There’s a warning, too, from Zakharov that the economic chaos is eroding pricing and vendors are increasing utilisation, use of low-cost resources and fixed pricing to sustain profitability.

While TBR believes consulting pricing remained relatively stable during the last quarter of 2008, Zakharov says he believes the focus has shifted to cost-cutting-type engagements with quick ROI since they “offer attractive value propositions and pricing models.”

Zakharov also says that Accenture does not expect the current pricing pressures to negatively impact its overall profitability, and to recoup its recent salary increases (July-August), it plans to drive added labour cost-savings by increasing utilisation and the use of its GDN.
 
He also reports that IGS saw stable pricing during 4Q08, which assisted the profitability of the business unit, and he believes IBM remains less affected in terms of pricing than competitors due to the global economic slowdown.

In Europe, Zakharov says TBR believes consulting pricing is threatened as a result of MNC and Indian players’ expansion into the region.