Expert warns India of relying on pricing advantage

MUMBAI: "Too much reliance by the Indian IT services firms on the pricing front alone in the global market may spell a doom for their business. The biggest danger would be commoditization of services." This was stated by Gartner Research Vice President Research Director Rita Terdiman said while addressing the Nasscom Gartner Summit 2002 on the topic `ICT Strategies for Success' here on Wednesday.

Speaking on the emerging market trends, she said that despite economic woes and geopolitical uncertainties, offshore sourcing and global delivery will become an integral part of any enterprise's sourcing strategy.

Terdiman maintained that global diversification would be the key in the future. Although India will maintain its lead to survive in the global market place, serious contenders will emerge generally carving niche roles for certain services.

In the US, the interest was accelerating with offshore advantage becoming more apparent. This has led to a shift for tier 1 ESPs where offshore component becomes the key, she observed. India however, continues to dominate the offshore IT services delivery. With more concern for risk, risk mitigation and business continuity, there is a shift towards larger and more stable vendors.

In India, the export market has grown by 53 percent between 1999 and 2001. The new focus areas however, remain on verticals, domain expertise, integrated service offerings, new IPRs and niche services.

On the vendor challenges, Terdiman said that customers all over the world would demand a workforce that is all over the world. The future will require a definition of the brand as well as a shift in the current perceived value proposition.

(CNS)