In last 1-2 years, I have heard many noises that Indian outsourcing industry is on decline and might die completely in next 4-5 years. These thoughts picked up steam last year when new outsourcing centres such as Philippines, Malaysia, and Mexico started coming up on the global radar. China has already taken a major chuck of manufacturing business share. Does it all mean that the golden Indian IT story is over and it will shift to other low-cost destination? Absolutely no! In fact, I see the birth of a new kind of outsourcing industry.
People who have seen and understood the industry well will agree that outsourcing has many facets. It can be as simple as a resource augmentation, can take the form of a project based assignment or transform into a complete partnership arrangement. Similarly there are many business models of increasing complexities. Over the years, industry veterans have seen Indian outsourcing companies maturing from simple resource providers to complete solution providers. The phase we are in currently in is the manifestation of that transition in full form.
In the coming years, we are going to see the maturity level of Indian companies increasing dramatically. I have many reasons to back my statement. Indian entrepreneurial scene is bursting with activity. We see reports of small companies coming with very innovative solutions in the areas of Enterprise software, Cloud computing, mobility and many other areas. They do not talk the language of resource augmentation. Add to this, new government’s initiative of Made In India and opening up the economy. What will happen that all of these factors will add together to make India a complete solution story. Many big players in Indian IT industry will either partner or acquire the niche players to offer complete solutions to their customers. We will see a wave of consolidation and companies ( big or small )collaborating with each other to take Indian outsourcing Industry to the new level. Ideas will continue coming from the customers, but we would take charge of converting those ideas into realities starting from design to implementation to manufacturing. Indian juggernaut will just roll on!
Obviously this phase will have its own challenges. The biggest of them is the mentality. Indian companies must start thinking themselves of solution providers (In fact, many of them have started it long back). New leaders need to emerge who will think the solution way and stich the capabilities together to furnish a world class product to the leading companies. These leaders will be risk-takers, will love challenges and drive their organizations towards taking a solution centric approach. Companies will have to set aside funds to build special capabilities (this also has started long back!) . All in all, Indians have the talent, guts and financial muscle to pull this off and we will definitely do this.
The problem is that many people (Including some customers!) still consider outsourcing as a simple cost arbitrage. This notion has to go away completely. Indian companies are doing and will continue doing some exceptional work in all the technology domains. The story is just going to build up because of all the reasons I described in last paragraph. We are far ahead in this game and other geos have a lot of catching to do. Let’s raise a toast to this industry that many of us are part of! We have the responsibility to take this to the next level. And we will do that!
Disclaimer – The Ideas expressed here are purely of the author.
