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Indian service providers have successfully transformed the IT service playing field by their ability to adapt well to new market dynamics making them a strong competitor in IT service delivery segment.
After the Y2K problem in 2000, there was a paradigm shift with Indian vendors stepping up to provide low cost high quality service delivery that changed the rules and everyone has to play by the rules whether you are IBM or Accenture or an Indian vendor.
Service providers who provide transparency are the ones thriving today because people want to know exactly what they are paying for. Indian vendors increased service sophistication by decoupling services from assets, which also made it difficult for providers to swindle customers.
The consistent improvement by Indian vendors in delivery processes along with consistent quality led created an expectation among customers to expect optimization to be part of outsourcing deal. They now want more for less which India is providing.
This is the tipping scale in favor of India as a chosen outsourcing destination. India today is the destination of choice – in terms of the market, maturity of vendors in the market, the cost, the quality and the complete experience. It is difficult to beat such combination of competitive strengths.
Although India is not without its challenges but its adaptability is high. Currently the attrition rate in India is up to 30 percent; rupee is appreciating against dollar and even the Euro, leading to margins being squeezed and higher costs for customers.
However, the Indian vendors are facing these challenges to deliver on this new IT service paradigm through introducing more automation. Previously service providers did not want automated tools because they wanted to charge for more bodies, but today they don’t have the bodies or if they do, they are getting too expensive, so they are creating their own tools and even buying them from third party vendors.
Providers are also allocating large budgets for training. Vendors like Infosys spend ten per cent of their revenue on training.
Providers are moving from places such as Delhi, Mumbai, Bangalore to lower cost tier two Indian cities areas to avail cost benefit.
Indian providers are encouraging more participative management from customers by involving them in projects and improving overall processes to further lower cost without compromising on quality and delivery model.
Finally, the providers are acting as solution catalysts. Vendors focus on creating reusable innovative solutions to jump start on future projects.
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