Friday, 14 November 2008 08:44

Indian offshorers muscle in on turf of big outsourcers

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The multi-million dollar deal Wipro Technologies inked with Origin Energy last month highlights the increasing threat of Indian offshorers to the businesses of big outsourcers in Australia, according to a new paper.

The paper and online Flash presentation from IDC outlines what is helping the Indian offshorers gain an edge using the Original Energy deal as an example.

IDC's Flash is provocatively titled, Wipro Inks Their Largest Integrated IT Services Deal With Origin Energy In Australia: Are Indian Offshorers Threatening The Turf Of Tier 1 Outsourcers?

Recent media reports focussed on possible job losses at Origin Energy because of the Wipro deal. However, perhaps future reports might be looking at the pressure on jobs within the tier-1 outsourcers.
 
Wipro Technologies beat IBM and Accenture to become the preferred partner to transform Origin's retail business processes. The two-year deal will see Wipro provide Origin with integrated billing, IT and back office processing support for the retail business, on an SAP operating platform.
 
"This deal will considerably strengthen Wipro's profile within the Australian market place, where compared to the other Indian IT services players, their activities have been relatively low profile, says Aprajita Sharma, Program Manager ICT Services and BPO at IDC
 
"While many of their Indian competitors such as HCL Technologies and Infosys have been leveraging and building their brand and awareness through marketing activities, Wipro has focused primarily on a rigorous account qualification process and an intimate client engagement strategy.
 
"This deal further reinforces the reality that Indian offshore players are becoming a force to contend with. They will increasingly impact the ability of the leading tier one players to increase their market shares within applications management and infrastructure management.
 
"The Indian offshore players are not only focusing their energies on stepping up their capabilities in applications and infrastructure management, but are also proactively enhancing their consultative-led transformational services," says Sharma.
 
So what are the factors that differentiate Indian offshorers from traditional tier-1 outsourcers which is helping them win local deals?

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According to IDC's Aprajita Sharma, there are two major factors that are giving the Indian service providers the edge and they have nothing to do with the commonly held perception of lower cost.

"It's not really been a price game," says Ms Sharma.

"After having spoken to many of the companies out there, they've never actually said that they've engaged an Indian offshore provider because they're low cost.

"The areas that they've highlighted where the Indian players have been better at is a strong project methodology and more integrated onshore anf offshore capability.

"Some of these companies have said that when tier-1 companies go to them it's like because they've acquired some offshore capability in India, it seems like that there are two differentiated teams in terms of culture and positioning.

"Also in terms of delivery capability, it's very distinct - it's not presenting one face to the client."

Aside from better offshore and onshore integration, Ms Sharma says the evidence is showing that the Indian offshorers have better developed project methodologies.

"In terms of timeliness of delivery of projects, having delivered some of the large offshore projects in the US and the European markets, they've developed more experience over the last 15 years or so compared to the players who have only quite recently ramped up their offshore activity."

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Stan Beer

 

Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.

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