IT offshoring expands in other than outside India

NEW DELHI, Dec. 27 (Xinhua) -- India's position as the global hub for IT offshoring and outsourcing remains undisputed since IT services are looking for new destinations in India other than outside India, local newspaper The Economic Times reported Thursday.

Despite the emergence of other locations across the world, newer delivery centers are expected to come up in the near future within the country for IT services.

Partha Iyengar, head of research-India, Gartner, has analyzed 30 countries and assessed their suitability for offshore locations. The analysis showed that India remains the undisputed leader in offshore services, but increasingly countries such as China, Russia and Brazil are providing credible alternatives.

According to the report from Indian IT hub Banglore in the south, for starters, it has been Business Process Outsourcing (BPO) services that are moving into tier two cities and it is now expected that IT services will follow suit, though at a slower pace.

According to Partha Iyengar, there will be expansion of IT delivery centers within the country into the tier two cities. Gartner, for example, has increased the number of tier two locations it takes into consideration from 23 to 30.

Many companies are looking at starting new IT services centers in locations like Kochi, Bhubaneswar, Mangalore and Coimbatore. Sudha Kumar, CEO, Prayag Consulting, said some of the tier two locations have gained enough maturity to become viable IT services delivery centers and companies are looking at tapping into this talent pool.

The reasonable spread of engineering colleges across the country is also helping the IT services companies to tap into these tier two locations. However, the movement of companies into the tier two and three locations will be a lot slower as the quality of the available talent pool does not necessarily match the required standards.

Mohandas Pai, HR director of Infosys, said the smaller towns have very limited capacity and that makes it very difficult to scale up operations. Though, he added, there will be a slow movement towards the secondary cities for IT services centers.

The primary reason for these companies to move into locations is the lower attrition rate and costs. Typically, IT professionals in these locations remain within a particular company for a longer period of time.