LOCAL LANGUAGE SKILLS, TECH TO CHALLENGE OFFSHORE BIZ

Rachana Khanzode, July 28, 2008
The Financial ExpressIn an era of globalisation, where offshore services are an important part of the business done by Indian IT companies, experts say that there is an increasing demand for local presence in non-English speaking countries with local resources.

According to analysts, Indian IT companies could lose their pie of offshoring business to other countries if they lacked in giving a local language support.

Allie Young, research vice president, IT services and consulting, Gartner, says, “As the market in Europe is becoming more mature and these clients are opening up to Indian companies due to the cost-competitive factor, it becomes important for Indian IT companies to bring in local language support like French, German and Spanish with local presence.”

The next big challenge that IT companies could face over a period of next 15-18 months, is the technology landscape space. Partha Iyengar, vice president, distinguished analyst, regional research director, Gartner India, says, “Service-oriented paradigm shift led by technology could challenge the traditional services model. The shift from hardware to software and now to cloud computing could weaken the services company because then the location becomes insignificant.”

Besides this, Indian IT companies continue to face challenges in terms of the average revenue per employee. Iyengar says, “The average revenue per employee for the global players is $140 to $160 while for Indian companies it is about $40.”

The market for Indian IT companies is undergoing a transition phase where companies need to be more productive and bring core competitiveness. He adds that Indian companies need to improve their efficiency because if the average revenue goes back to the stage of $8-10, the stage where these companies started at, it could dent overall revenue.