IT offshoring business dips in Q3 (India)

[OhioChick]

< 7 Nov, 2006 0012hrs ISTTIMES NEWS NETWORK >


NEW DELHI: In the third quarter of 2006, size of global outsourcing market for IT and IT Enabled Services experienced a shrink for the first time ever, said TPI, global BPO consultant. The third quarter of 2006 seems to be the worst quarter for outsourcing deals since 2002. However, business process outsourcing (BPO) market has experienced a 10% growth.

But, business flow to India continued to grow at faster than global growth rate. Because of this, market share of India-based service providers in the BPO as well as IT sectors has gone up. India's share in the global business has grown from 1% in 2004 to over four per cent in 2006 so far. India-based providers are beginning to sign business in infrastructure-related areas, and they have over 25 percent total contract value (TCV) share in the pure applications development and maintenance (ADM) market.

A new trend has emerged under which big players are loosing market share as duration of contract is decreasing, and this is adding to plate of small players.

The third quarter of 2006 saw a decline in contracts by volume and value from the same quarter last year. The cause of the falling aggregate contact values can be because of the declining contract durations, especially for Information Technology Outsourcing (ITO) contracts. Since 2001, the average duration of a Broader Market contract has decreased 12%. In ITO, it decreased 18 percent, while for Business Process Outsourcing (BPO) it dropped 5% in the large contracts segment.
http://timesofindia.indiatimes.com/articleshow/347738.cms

[FloridaPat]

1. Breaks my heart - not.

[ChromeFoundry]

2. ...

:nopity:

[badgolfer]

3. Cingular

AT&T is buying Bell South which owns Cingular wireless. I know someone that works at Cingular and most of the IT workers are of Indian descent. So, AT&T isn't going to out source the jobs to India but probably use the H1B visas to bring more Indians over here. WoW, this is good for IT workers in this country.

[OhioChick]

4. Guess you didn't get the memo:

September 28, 2006
AT&T To Cut Hundreds Of U.S. Tech Jobs, Sources Say

Company insiders claim AT&T is set to dramatically increase its use of India-based labor.
AT&T last week proudly trumpeted the fact that it would end arrangements under which it outsources certain customer service functions to low-cost, offshore providers. But company insiders claim the telecom company is shipping out significantly more U.S. jobs than it's bringing back and is set to dramatically increase its use of India-based labor.
AT&T is expanding its relationship with Indian outsourcer Tech Mahindra, which is partly owned by British Telecom, according to sources with knowledge of the company's plans. AT&T plans to drastically reduce the number of U.S.-based contract employees it uses for internal software development, they say. "AT&T is sending out far more jobs than it's bringing back," says an insider in the company's customer operations department. The source requested anonymity, as did another source with knowledge of AT&T's intentions.

An AT&T spokesman confirms the Orlando job cuts, but claims they're not part of a wider offshoring push at AT&T. "We evaluate project by project. If we determine that Tech Mahindra provides an advantage for us in terms of a specific project, then we'll look at that," the spokesman says.

The plan was unveiled to middle management earlier this month by AT&T senior executives. It calls for the company to slash the number of IT contractors in use throughout the United States and send the work to Tech Mahindra's Indian operations. For instance, at least 24 software developers at AT&T's Orlando billing center will be laid off by March as their work is gradually outsourced. The workers' current role is to write the software that lets AT&T customers pay their bills over the Internet.

http://ddj.com/dept/debug/193100354?cid=RSSfeed_DDJ_debugging