Indian firms top ADM services

BANGALORE: The realm of Application Development and Maintenance (ADM) services forms the main revenue staple of most Indian IT services firms.

A recent study involving global customers and market analysts shows that Indian ADM has come of age. US-based research group, Performance Monitor, reported in a new survey that India-based firms outperform some or all of the multi-national firms in a number of areas of ADM services.

The research is based on inputs from 864 clients of 11 leading ADM providers, seven of which are multi-nationals and four are India-based. The four Indian companies that were considered in the survey included Cognizant, Infosys, Wipro and TCS. The various players were rated on a scale of 1 (low) to 10 (high) on various parameters.

For multiple integrated applications, Cognizant Technology Solutions scored the highest while in engagements with annual run rates of $10 million or more, Wipro topped the list.

In the area of new application development, Hewlett Packard’s clients accorded them the highest performance score with Infosys coming in second followed by Wipro.

In the goal attainment category, Cognizant took top honors with clients reporting the highest level of goal attainment relative to their expectations on three specific client goals: improved response to business need, improved skills levels, and meeting regulatory requirements.

When comparing the composite result for meeting and exceeding expectations regarding goals, only two firms: European major Capgemini and Infosys, fared better than the group averages across all seven goals.

In the area of problem management, Infosys showed the lowest incidence of “troubled engagements” (those with 5 or more problems cited).

Speaking about the stellar performance of Indian companies in the survey, the report observes, “When it comes to application development and maintenance services, the India-based firms have stepped up to the challenge the erstwhile global leaders.”

The home advantage

Siddharth Pai, partner and managing director of sourcing advisory firm TPI, is not at all surprised at the survey’s findings. “Indians have come a long way in this area and Indian companies have a large market share of around 26 per cent in the ADM market, especially in the large deals space.”

He adds that the strategy of “penetrate and radiate” whereby services companies manage to deepen a customer relationship starting small and then spreading to retain and gain a bigger portion of the pie has paid off.

What scores in favor of desi players is also the way the delivery center management is structured. “The salient differentiator for the Indians is that the delivery head is based in India where most of the delivery happens and not co-located with the client which is the case with most MNCs. This leads to more delivery out of offshore centers.”

Winning with GDM

An Infosys spokesperson explained how the company has honed its Global Delivery Model (GDM) model in its ADM projects. “What is required to successfully leverage GDM is the ability to breakdown work into discrete components and identify where these components need to be executed. Infosys has put in place the necessary frameworks to achieve these.”

Thus, any activity that requires requiring high degree of interaction with a client such as requirements elicitation is best done at the client site, while an activity that doesn’t need client interaction like testing, is performed remotely.

R Chandrasekaran, president and managing director, Cognizant, says that Cognizant’s core focus is in itself a big differentiation. The company’s revenues come from the twin buckets of applications development and application management. “This focus has led to Cognizant differentiating itself at every stage of the ADM value curve—organizational readiness, engagement governance, change management, infrastructure, quality processes and business and technology depth,” he said.

The company also uses its centers of excellence such as its Global Technology Office, Global Automation Group, solution accelerators, application frameworks and tools and best practices garnered over thousands of engagements.

Forrester India's country head and senior analyst, Sudin Apte feels that Indian companies have built skills for offshore delivery over years." Obviously their sophistication in terms of distributed development management, process and quality excellence is high. Their ability to take up small piece of work and expand over time is un-matched even today."

Apte contends that the pricing models of Indian firms are much more transparent and cleaner, compared to most on-site players.

Forrester believes there is still a 12-24 months lead that Indian players enjoy in GDM. "The state of sophistication of multinational IT services firms is not same. IBM and Accenture have clear lead amongst that lot with both firms enjoying size and long duration now on Indian ground. Acquisitions such as Daksh have helped them to ramp their efforts. EDS and Capgemini are in catch-up mode with large acquisition integration task still incomplete," feels Apte.

The Indian brigade seem to have hit upon the perfect formula of blending GDM with quality processes in a way that not only ensures customer satisfaction but also ensures the longevity of the client relationship.

Little wonder then that the Performance Monitor report also revealed that North American clients chose Indian-based firms for reasons of performance and execution more so than for the multi-national firms.

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