Indian Outsourcing Should Incorporate Other Low-Cost Countries

Experts speaking at an international software conference in India say the country should set up operations in Mexico or Eastern Europe to be closer to clients.

Mumbai, INDIA (AP) – Indian outsourcing companies should expand their operations to other low-cost countries if they want to maintain their edge in the global outsourcing industry, experts said Thursday at an international software conference.

Setting up call centers, back-office operations and software development hubs in Mexico or Eastern European nations would bring Indian firms closer to the companies they serve in the United States and Western Europe.

“Customers want services closer to home in their own geographies,” said Padma Ravichander, president of Perot Systems India and Asia-Pacific, which offers information technology services to banks, healthcare and financial services companies.

“Companies must be more adaptable, nimble if they want to get the core businesses of their clients that often can’t be remotely delivered,” she told the three-day conference organized by the National Association of Software and Services Companies, India’s main software services trade group.

Perot, a Plano, Texas-based information technology services company, set up organizations in India a decade ago and now also has operations in Romania, Hungary, Ireland and in Latin America to be closer to customers, such as banks and financial services firms.

Scores of multinational companies farm out services to companies in countries such as India, where wages are low and skilled workers are plentiful.

India has in the past decade come to dominate the outsourcing industry, with the country’s revenues totaling $6.3 billion in the fiscal year that ended March 2006.

Experts said while industry leaders such as Tat Consultancy Services and Infosys Technologies Ltd. already have big offices overseas to serve major clients, more Indian companies must follow suit to stay competitive.

“The model I see emerging is…India will be a hub of outsourcing and the spokes could be in China, Malaysia, Europe, Brazil or Sri Lanka,” said Pardeep Udhas, a global partner at KPMG, an international consulting firm.

The conference in Mumbai ends on Friday.