NASSCOM SPL: Europe in tough competition with India

MUMBAI, INDIA: Global slowdown has not only affected economies of the European countries but has also created an arena of competition from Indian vendors.

Addressing the audience at NASSCOM Annual Event organized at Mumbai, Chris Gentle, Director Europe Deloitte said, “In this tough time when more and more companies are eyeing for cost effective methods, European service providers would have to look for strategic changes as it is already in competition with India. There would be an issue of portfolio management. There would be an industry restructuring in operating model which would give a pathway of integrating offshoring.”

Focusing on the challenges faced by Europe, Luc-Francois Salvador, Executive Board Member, Capgemini said, “The biggest challenge for Europe is the strong disconnection between political and corporate world. Language and cultural differences are other great barriers in the outsourcing model. Due to language advantage, India sweeps 60 percent of IT-BPO business from the U.S.”

“Despite global effects on European countries, outsourcing is expected to grow from 15 to 90 percent as per the size of the company,” he added.

Agreeing with Salvador, Peter Redshaw, Vice President, Gartner said that there would be more outsourcing opportunities in 2009. In the long term, there would also be a positive change in the governments’ policies that would enable free flow outsourcing. Price competition would intensify and companies would focus more on price mechanism.

“This would give birth to price sensitive market rather than growth. There would be low growth of financial sector. Consulting would be on the peak. More and more consolidation would be required of the suppliers as there would be less long lasting deals. Application outsourcing leads growth. There would also be multi-sourcing. The drive to deliver fast would discourage companies to take KPO projects as this involves a lot of research and time,” he added.

Sid Pai, Partner and Managing Director TPI said, “IT has been more successful in Europe than BPO. Service providers would have to focus on the location equation, speed, risk/ reward and governance to get long term outsourcing contracts.”

According to Sudeep Banerjee, CEO, L&T Infotech also said that Europe’s resource crunch can be met through global sourcing.

For more NASSCOM Special stories click here

©Global Services