MUMBAI: India’s massive outsourcing industry is changing. Growth in its traditional markets has flattened as the country’s biggest IT providers struggle to adapt. Companies like TCS, Infosys and Wipro have repeatedly blamed the stronger US dollar for poor results as a good number of clients are based stateside. But the underlying reason is simply that fewer businesses need their services. “The traditional labour-based service delivery is now being cannibalised by access-based, cloud-based, platform-based and automation-based service delivery,” said Arup Roy, research director at Gartner India Research and Advisory Services.
Vietnam has capitalised on increasing labour costs in China to take first place in the ranking while India remains the world’s largest business process outsourcing market. Vietnam established its presence in the sector thanks to numerous government reform policies to promote the country as a key outsourcing destination. C&W predicts the service segment will expand rapidly given the average age of the country’s workforce is under 30 and 1-1.5 million people enter the labour market every year.
I first heard of Cap Gemini earlier this year when a Swiss based company I am associated with, selected it to take its 2,000 staff in 54+ countries for a ‘walk in the cloud.’ All I knew was that it was a French multinational headquartered in Paris. It was founded in 1967 as ‘Société pour la Gestion de l’Entreprise et le Traitement de l’Information’ (Sogeti). In 1973, it bought Centre d’Analyse et de programmation (CAP) and in 1974 bought US based Gemini Computers Systems hence the rename to CAP Gemini.
Tech in Asia learned today that freelance platform service Lancers secured US$8.5 million in funding from telco KDDI, human resource firm Intelligence, gaming company Colopl, and venture capital firms Gree Ventures, Globis Capital, and GMO Venture Partners. The funding is a long-awaited counterpoint to the regular stream of positive PR coming from rival Crowdworks. Crowdworks is a more visible company in Tokyo’s startup community and is not shy about promoting itself. Since June, Crowdworks has sent out 26 press releases to Lancer’s 18.
China’s IT outsourcing industry has been forecast to grow at record pace over the next few years, with western businesses continually expanding their bases in the world’s second biggest economy to capitalize on the developing markets of the Asia-Pacific region. According to a study by technology market research firm TechNavio, China’s IT outsourcing sector is on course to grow at 25% annually until 2018.
There are dark clouds on the horizon of India’s information technology and outsourcing industry. Profit growth at even India’s most successful and sophisticated software companies could be doused as companies, governments and consumers around the world do an increasing amount of their computing on the cloud, says outsourcing services advisory firm ISG Inc. Companies that have traditionally used in-house servers running on custom-made applications are putting more of their business on external servers and using off-the-shelf software. Using the cloud often means using fewer people so Indian software companies—once dubbed “body shops” because they could supply as many computer engineers as a project needed—are going to suffer as they lose much of their competitive advantage.
BANGALORE: Wipronhas won a $35-million IT outsourcing contract from Philip Morris International (PMI), the world’s biggest tobacco company. A person with knowledge of the matter told ET that Wipro’s RCTG (retail, consumer goods, transportation and government) division will provide IT infrastructure and application management to PMI for five years as part of the deal.
FPT, the Vietnamese largest IT group, has signed a cooperation agreement with the Vietnam Railway Corporation on the development of a new ticket distribution system, according to Ha Noi Moi newspaper. Under the agreement, FPT will build a modern e-ticket distribution system which allows people to buy tickets through different channels, either via websites, messages, or sale agents. With the new system, which will replace the current one, people will be able to book tickets at any time convenient to them and update information about the ticket distribution process, itineraries and schedules.
KUALA LUMPUR, Feb 12 ― After outsourcing its information technology (IT) infrastructure for about five years, Syarikat Takaful Malaysia Bhd, the oldest takaful or Islamic insurance operator in the country, has decided to bring it back inhouse. The company, which is 61 per cent owned by BIMB Holdings Bhd, announced that it has adopted Microsoft System Center 2012 to manage its IT infrastructure and end-user computing.