Noose is tightening on Indian IT companies
Indian IT companies traditionally have been depending on US and European countries to grow and generate jobs.
Last three years of recessionary effects have brought forward the real need for these countries to have a relook in their operations and reduce cost at all levels. Needless to say, past and prolonged affluence has resulted in these countries taking things for granted.
“ Inflation is adding to their problems further but attempt to change is very slow. “
High standards of living, easy jobs, good salaries and a lot of energy consumption became order of the day. Last few years have put realities in front of these countries compelling them to rethink their strategies to reduce cost and be more effective.
In past, history reveals that these countries have enough will power to change whenever they have faced any adversary. I am sure they will certainly change and that throws many possibilities in few years to come. One of the possibilities is that of bringing back IT jobs. BPO jobs are slowly moving back to US and Europe apart from Philippines.
The main reason cited so far has been the quality of work added with ever increasing cost. I was surprised to find that few companies in US are getting very competitive cost as compared to Indian IT majors who charge a bomb for their services for BPO operations. Although industry leaders in India are pushing aside any concern, it is true that the cycle would complete with jobs going back to their countries of origin primarily because of the quality and eventually having no cost advantage.
Similar problem can be seen with IT service providers who are no more as cost effective as they were initially. Inflation is adding to their problems further but attempt to change is very slow. Indian companies still look at profits of 30% as their benchmark and the account managers try to achieve their targets by hook or crook.
Infosys has been losing customer trust in market mainly because of such attitude of their staff and others would also not be far with things becoming tight in near future. The only way they can retain the advantage is by reworking the cost to a far lower level and working transparently with customers to give the values they really need from IT providers.
Have something to add? Share it in the comments.