The European Economic crisis is proving to be a boon for Indian Tech Giants who are reporting robust growth. Until recently, Europe was very stingy when handing their work offshore. However, the growing concern of a meltdown has forced the companies to revaluate their strategies concerning cost reduction through outsourcing. In 2011, top-tier Indian Companies posted a growth between 23% to 40% from their Europe focused operations. In the last quarter alone, Infosys reported a jump of 17% while TCS garnered 17% more revenue. The good news does not end there. The scope of work to come too has shot up with European companies signing more multi-million dollar contracts than the US for the first time.
European operations usually account for about 25% or 1/4th of Indian IT Companies total revenues. However, UK is the sole country which hands over the lions-share. Rest untapped markets involve Spain, Italy and the Nordic regions. But things improved in 2011 when Infosys added 14 new clients, out of which two are in the $ 500 Million bracket. TCS bagged 10 large deals, while HCL bagged a Billion Dollars from 18 new contracts.
The success story makes us think, what do we Indians have in special?
Well, besides the obvious advantage of cost reduction there are efficiency parameters too:
We Indians are proving to be capable to posses “Run the Business” capabilities. Hence European companies are now seriously looking at lowering their cost by shifting complete Application Management Services here. Anil Chanana, CFO at HCL Technologies, reveals that “Indian IT Cos has developed capabilities both organically and inorganically to take on large and complex projects” that Europeans fear to tread.
Finally, we Indians are known to be flexible when negotiating commercial terms. It’s this accommodating nature that has propelled European giants to look elsewhere other than their own backyard for quality service.
Looks like the golden age of Tech Process Outsourcing from Europe is hear. But Industry watchers caution that if Europe plunges further, the projects just might stall & we are left high & dry.