The Hindu Business Line : Offshoring still to gain currency — SMEs in US, potential source for Indian cos

What is still untapped is the $27 billion of business from the small and medium enterprises in the US, to whom the idea of offshoring to India is still unheard of.

"The Fortune 500 companies are saying that if they do not outsource their IT, they will not survive," said Mr Avinash Vasisht, CEO, neoIT. Some of their competition has already outsourced operations and this by itself is strongly driving more offshore outsourcing. But lower down the line, among the Fortune 1000 companies, there is scepticism about offshoring, he said. Quoting a study conducted by neoIT, he said that while 47 per cent of the Fortune 1000 companies are looking to outsource a part of their operations, only 9 per cent are looking at offshore suppliers. "Offshoring is still unknown to people and there is still scepticism and ignorance about far off places such as India," said Mr Vasisht.

A good 38 per cent plan to outsource to suppliers within the US. Another 35 per cent do not even think of it as a priority.

NeoIT surveyed members of the National Association of Purchasing Managers in the Silicon Valley. The idea was to "encourage them to look outward" because it was a "channel where we could find traction", Mr Vasisht said.

Purchasing managers have a different attitude from the CFOs who are responsible for bottomlines, he said.

In India, the deals are getting larger, but it is the larger companies who are bagging them, he said. In fact, with total outsourcing coming to India, the deals are so huge that the current challenge is execution, Mr Vasishta said. The medium sized software companies who are niche players also have projects coming to them, while the smaller guys have yet to recover, he said.

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
BSNL, MTNL numbers to be prefixed with `2'

Satyam Computer attracts FII interest

Sierra solution for Agile suite

`SMEs see increase in turnover with IT usage'

Wipro books space in Gujarat ITES facility

Individuals dominate software patenting

Offshoring still to gain currency — SMEs in US, potential source for Indian cos

JP Mobile new server for mobile applications

Turning in an effective e-government

Looking back

Bill Gates thrust this time is healthcare

Citrix launches software for virtual meetings