Offshoring firms experience major changes

Impact of global meltdown

'Offshoring firms experience major changes'

Due to the meltdown large clients have either been acquired or have gone bankrupt and as a result their business is in itself in doubt...

Manu Sharma

Thursday, December 04, 2008

CIOL: What do you foresee as an outcome of this global recession?
KM: The meltdown has changed significantly the expectations from the India based offshore players. The large players during the recent boom times had got used to being pursued by clients and to some extent did not have to sell aggressively like the more nimble players. The meltdown has meant that some of the large clients that were being serviced by various offshore players have actually either been acquired or have gone bankrupt and as a result their business is in itself in doubt. Since these were large players like Bear stearns, Lehman, Wamu, Wachovia, Fortis, etc it has brought in a lot of uncertainty to players exposed to them. I will not be surprised if some of the offshore players exposed to these firms, announce job cuts as a result.

CIOL: What is Syntel doing to counter this threat?
KM: Syntel with its focus on innovation and being a flexible, nimble, right sized player with superior ‘Risk Management’ policies has been largely unaffected by the meltdown. In fact, we are seeing more attention now than before as clients look to us to help as they aggressively pursue the offshore model. Larger competitors are less geared to serve clients with a smaller spend but our people, technology and processes are built around that reality. We just completed our client event in the US and all our global clients present there spoke confidently about their businesses even in this environment and how they were keen to benefit even more from our focus on our Innovation program called ‘Syntelovation’. We expect decision cycles to be longer but the pipeline is strong.

CIOL: What steps do you suggest outsourcing companies to take?
KM: Companies in the offshore space will need to focus on becoming more efficient thru productivity, utilisation focus and harvesting of reusable tools and components. Every employee has to be focused on being a co-innovator with the client and ensuring the client is able to access new efficiencies as a result.
Every client has to be special and at this time client intimacy will take centre stage. IT and KPO firms like Syntel who have the capability will focus on new offerings around integration, risk and governance. All of this will enable the top line. At the same time since sales cycles will be longer and some clients in the BFSI space may reduce budgets the offshore firms must take steps around geographical expansion, adding new service offerings and waste elimination.

The short term will be tough for some companies who are not thinking ahead and who are not intimate with their customers or their business. It will also take some time for the BFSI clients to finalise budgets. Firms exposed to the affected these clients will have some uncertainty. However the impact on other verticals as of now is minimal. In the medium term however the need for clients to reduce cost and drive more innovation will actually mean even more business for attentive IT and KPO Companies who leverage their talent, passion and innovation capabilities. Syntel has increased its revenue and EPS guidance every quarter in this environment and this is a testament to how we are described by the industry analysts " Small enough to listen, Big enough to deliver."

©CIOL Bureau

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i dont want to be given pink slip for writing this! said on 12/6/2008 9:17:37 AM:
its as usual a great talk..but did he tell you what cost saving means..cutting employee benefits..like vacation pay..but not improving effeciencies..

to i dont want to be given pink slip for writing this!

Mayur said on 12/5/2008 1:40:10 PM:
Good going Syntel

to Mayur