Global It Service Providers

l IT service providers

FROM COST ARBITRAGE TO - NEXT GENERATION LEADERSHIP

THE IT GLOBALISATION STORY HAS COME A LONG WAY.

Indian providers have transformed Indian providers have moved up the value chain considerably with customers across the globe. Their proposition now goes far beyond cost arbitrage and enables them to be partners in transformational initiatives. Seven to eight years ago, the model was very simple and easy for inexperienced providers to emulate. The key differentiator was cost arbitrage. Hence it became imperative for Indian providers to transform themselves and innovate in delivery models. With that background, the tier 1 Indian providers embarked on a variety of transformational initiatives.

Foremost among these initiatives is a clear drive towards supporting customers to move to outcome based models – the outcomes could be business, service, technology etc. Providers are putting more ‘skin in the game’ and are increasingly joining hands in the consumer's business journey, be it via proactive investments, infusion of newer technology or innovations in engagement models like those of risk and reward. Providers are also engaging with customers in alternative commercial models, addressing business KPIs and IT performance KPIs – these could be output, transaction or outcome based models. These engagements will be more widely imbibed over time and as businesses increasingly leverage IT for their business transformation.

There is also a concerted effort towards optimising internal organizational productivity. Consequently, the strategy has shifted from driving revenue through volume/resource growth (T&M model) to driving revenues through improved productivity and effective utilisation of resources. This shift could only be achieved by consolidating delivery centres, deploying consistent delivery models and focussing on specialization and centralisation. This will enable providers to offer services to a broader set of customers and...