Hyderabad: Countries in central and eastern Europe, Latin America, north and east Asia, besides Canada, are emerging destinations for Indian tech and back-office services companies but the scale of their operations here lags behind global rivals. This is one of the findings of a study by management consultant KPMG and industry body National Association of Software and Service Companies (Nasscom).
The countries covered in the report are the Czech Republic, Hungary, Poland, Romania, and Slovakia; Mexico, Brazil, Chile and Argentina; China, Vietnam, Malaysia and the Philippines; and Canada.
The report says Indian firms need to pursue a more aggressive strategy. “If Indian IT/ITES (information technology and information technology enabled services) companies do not become ‘peripatetic enough’, catching up with the global IT giants in terms of worldwide presence and scale would be difficult,” it says.
India’s tech and back-office services companies have been expanding their presence in non-traditional regions, but in small numbers. Tata Consultancy Services Ltd, India’s biggest software services firm, for instance, employs under 1,000 people in China, a base it plans to grow five-fold by 2010.
Indian firms could follow the hub-spoke model, setting up offshore centres in regions such as central and eastern Europe, Asia Pacific and so on, KPMG’s partner-in-charge for global sourcing Pradeep Udhas said. “These regions offer a comprehensive and compelling value proposition, making it a win-win situation for both the Indian IT/ITES industry as well as for emerging global IT/ITES destinations,” he said.
In addition to the increasing number of back-office services outsourced, companies are now beginning to outsource their core business processes. “This...increases the pressure to identify the best talent at the lowest possible cost anywhere in the world,” Udhas said.
The report, released here on Monday, says Indian firms score high in areas such as project management, customer relationship management, transitioning, and security and risk management. But to provide end-to-end solutions and meet emerging client needs, “Indian companies will need to focus on new emerging locations offering the requisite language, transaction processing, high-end programming and knowledge processing skills.”