Management consulting firm, Zinnov forecasts offshoring of IMS to India to grow from $1.4 billion to $4.2 billion before year-end 2010, with hardware support services accounting for the majority of those revenues. According to the report, the banking, financial and insurance segment (BFSI) represents by far and away the largest market for such services, at 43 percent. The high tech/telecom, manufacturing and retail industries are the next biggest consumers of offshored IMS services at approximately 12 percent each.
Although, historically, the majority of IMS has been kept in-house or outsourced to "nearshore" locations (e.g. in North America), this trend is changing, notes the report. Having leveraged India primarily for call center support, product testing, and other related services over the past twenty years, western multinationals are increasingly looking for other ways to tap into India's growing workforce. Infrastructure Management Services are particularly suitable for offshoring given the relative disconnect between clients' core business offerings and these "backend" services. Not surprisingly, cost savings (between 40 and 60 percent) and 24 x 7 operations are cited as the main growth drivers of the offshored IMS industry.
The New Rules of Engagement: "Managed Services" as an Additional Catalyst
A third, less obvious reason for the growth in IMS offshoring regards the type of service level agreements (SLAs) that western multinationals are negotiating with their providers. In an effort to mitigate the risks associated with offshoring, customers are increasingly engaging in "managed services" agreements with vendors. The managed services model typically includes language in the SLA that, essentially, ties pay to performance. Other forms of offshoring that have also benefited from this model include call center services and back office processing.
American Vendors Doing Battle in India
In a sign of the times, HP recently announced the acquisition of EDS--and the latter's 27,000--person Indian workforce. It has been widely speculated that part of the impetus for HP's acquisition is an attempt to displace IBM as the world’s largest provider of outsourced infrastructure services. "The offshoring of IMS to India is clearly a huge growth area for both American and Indian vendors with the available talent in that country. And, as western companies continue to put an ever greater premium on holding down costs, we expect this growth to extend well into the next decade,” said Vamsee Tirukkala, Co-Founder & Managing Principal of Zinnov.
 Email |
| |  Print |
| |  Comment |
| |
|
