Tags: india | outsourcing

Indian Outsourcers Prep for a Rebound

By    |   Friday, 31 Jul 2009 01:24 PM

While the global recession has put a big dent on outsourcing in India, the companies have used the downturn as an opportunity to build for the future.

The value of new outsourcing contracts around the world fell 22 percent in the first half of the year, to about $19 billion, the lowest level since 2001, according to consulting firm TPI, cited by BusinessWeek.

TPI doesn’t see things improving in the second half. So many of India's 2,000 smaller tech companies may fail, and the biggies are unlikely to grow, the magazine notes.

"We have to prepare ourselves for unknowns," Infosys CEO Kris Gopalkrishnan, tells BusinessWeek.

But the top companies, including Tata Consultancy Services, Infosys, Wipro, and HCL Technologies are still in great shape, brimming with cash.

So the companies are cutting prices, increasing service, and investing sizable amounts in training and research to make them qualified for more complex jobs.

"I believe the industry will emerge much stronger," Wipro Chairman Azim Premji tells BusinessWeek.

"We certainly will as a company."

That means the Indian companies will have to turn to more complicated projects, which require more experienced workers. That is what American companies IBM and Accenture already have done in India.

Wipro, Tata and Infosys reported stronger-than-expected profits for the first quarter.

"We are starting to see the first signs of stability in the business as … volumes start to stabilize," Premji told The Wall Street Journal.

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While the global recession has put a big dent on outsourcing in India, the companies have used the downturn as an opportunity to build for the future.The value of new outsourcing contracts around the world fell 22 percent in the first half of the year, to about $19 billion,...
india,outsourcing
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2009-24-31
Friday, 31 Jul 2009 01:24 PM
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