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Bala Iyer

Thursday, July 29, 2010 2:11 PM
     

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What's up with the ITES market?

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Next summer, I am planning to take a team of MBA students on a trip to India and visit with major IT vendors to study the IT enabled services (ITES) market. The IT services market, in my opinion, has become very confusing for customers. From a macro perspective, the rupee is getting stronger and eroding the cost arbitrage value proposition. In addition, finding employable resources has become very difficult -- supply is simply not meeting the demand. This is also increasing the cost structures and impacting the cost arbitrage equation. As a result, customers have to revisit their initial decisions and see if the value is still there under the existing arrangements. From the supply perspective, the Indian IT vendors have moved from application development to process outsourcing to services. They are going global by opening centers all over the world with India being the center of gravity. The NA service vendors have moved from being pure service companies to supporting the entire stack. Their business model now includes centers in India and other parts of Asia. As a result, most of the vendors end up offering similar services across all layers of the stack using a blended delivery model. As a customer, how does one evaluate them and source work? Has IT become commoditized that you can base decisions on volume, quality and price? Along with my students, I'm hoping to search for answers to these questions.

Posted by Bala Iyer on Thu, Nov 22, 2007 @ 10:22 AM

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