Offshore companies are genuine competitors, say IT chiefs
The offshore Indian outsourcers are now genuine competitors to the traditional 'big six' IT services players such as Accenture and IBM, according to leading UK CIOs.
More than 40 per cent of the $88bn of outsourcing deals up for renewal over the next two years are likely to go to companies from lower-cost locations such as India, according to research out this week, and that view is backed by IT chiefs.
Ten of the 12 CIOs and IT directors on this week's CIO Jury panel said they view the Indian IT services companies as true competitors to the traditional western 'big six' vendors.
Graham Benson, IT director at Play.com's IT services business the Web Factory, said: "They are now established businesses, with mature processes and have adapted in response to the management and delivery problems experienced by early-adopters."
In many cases this is borne out of personal experience of using offshore IT service providers.
Andy Pepper, director of business information systems at Tetley, said: "I can only talk for my Tata Consultancy Services experience after working with them on true business consultancy projects, IT consultancy projects and seeing some of their outsourcing capabilities first hand. They have progressed immensely over the past five years such that I believe they are now true competitors."
Likewise, Nick Masterson-Jones, IT director at payments body Voca, said: "Our outsourcing experience with our two Indian IT services providers - Perot and Wipro - has been first-rate."
Gavin Whatrup, group IT director at marketing agency Creston, said the large consultancies have a reputation for high skills but also high prices.
He said: "Objective economics in a global economy dictates that regional premiums will be demolished. India has responded to the opportunity."
But the rapid growth of the Indian companies presents its own challenges, according to Kirk Downey, CTO at Centrica.
He said: "All of them are at differing stages of maturity, even the big players. How they deal with growth will be key to their competitiveness in different markets."
Peter Ryder, head of ICT at Preston City Council, said the Indian companies also face challenges to their growth from other up-and-coming offshore destinations.
Ryder said: "There is growth in places like China and South Africa, amongst others, who may well vie with India and perhaps overtake it."Christopher Linfoot, IT director at LDV Vans, also pointed to the benefits of the so-called 'near-shore' locations.
He said: "There are plenty of other, smaller providers closer to home who can often compete very effectively on price while offering competitive service and all from a base in the same time zone. IT here is outsourced and partially offshore, but not to a big six player, with the offshore element in Spain, not India."
Today's CIO Jury was...
Graham Benson, IT director , the Web Factory (Play.com)
Peter Dew, CIO, BOC
Kirk Downey, CTO at Centrica
Michael Elliot, IT director, Hasbro
Tony Johnson, IT director, Virgin Megastores
John Keeling, director of computer services, John Lewis
Christopher Linfoot, IT director, LDV Vans
Nick Masterson-Jones, IT director, Voca
Andy Pepper, director of business IS, Tetley
Peter Ryder, head of ICT, Preston City Council
David Supple, director of IT and creative services, Ecotec
Gavin Whatrup, group IT director, Creston
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