IT outsourcing to India / Asia

US crisis has not hit contract renewals, says TPI

Bangalore, Sept. 28

The US financial crisis is having an adverse impact on the Indian IT sector as customers reduce or delay their spending on deploying new technology applications. TPI Inc, the largest sourcing data and advisory firm that accounts for a fourth of outsourcing deals worldwide, recently launched a new business unit TPI Momentum for the IT services providers.

Through the new unit, TPI aims to help service providers address the changing requirements of outsourcing and offshoring service buyers. Business Line caught up with Mr Peter Allen, Partner and Managing Director of TPI, to get his perspective on the changing market dynamics.

Excerpts

What’s your assessment of the US crisis and how will that impact the Indian vendors?

With companies such as Bear Stearns, Lehman Brothers, Merrill Lynch and AIG becoming non-independent or going away entirely, I think we have lost four to six per cent of the buying universe in the capital market segment. The market opportunity for Indian companies will become small to that extent. There is a risk of some impact on captive centres those firms operate in India and non-trivial work displacement. There is also likelihood of a further pull back of discretionary work. A lot of work that’s outsourced to India is discretionary project work. Anything that’s discretionary is at a risk in the near term.

Has this crisis spread to other verticals? It is hard to find a vertical that’s untouched by the crisis.

Verticals such as insurance, retail, travel and transportation, hospitality, healthcare and life sciences are all impacted by crisis in some or other way. We are seeing early signs ............. read the whole article about IT outsourcing to India (28-9-2008)

Key terms: it, outsourcing, india, asia, offshoring

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