India to change outsourcing business model due to automation - FT
Companies such as Tata Consultancy Services (TCS), Infosys and Wipro will move from a strategy-based on high headcount and low costs to one reliant on higher employee costs and flexible services due to automation, writes Financial Times.
"Their financial model is under stress. It's that simple. They can't just keep hiring freshers [out of college] to keep costs down," says Pankaj Kapoor of JM Financial Institutional Securities, a Mumbai-based brokerage. "Clients know data centres can be operated by one person now, so why do Indian companies need so many?"
As their clients move towards automation, artificial intelligence and cloud computing, India's IT companies are being forced to redefine their pitches. "Our context has fundamentally and irreversibly changed and we cannot go back to the approaches and methods of the past. The world as we know it has been transformed," wrote Vishal Sikka, chief executive of Infosys, in its 2015-16 annual report.
Wipro's chief executive Abidali Neemuchwala shared similar concerns with the Indian newspaper Business Standard in April.
"It's very simple. The number of people required in the lower end of the pyramid is going down. Robots and bots are taking over. You will see a slowdown in hiring across the industry."
Infosys, Wipro and their rivals are now revising their old service model: to provide a fixed IT service for a fixed cost.
"We have started seeing models where we are jointly investing with the client, putting skin in the game," says Pravin Rao, chief operating officer of Infosys.
"I go to the client saying: ‘We believe that by applying these technologies, leveraging them, we can bring you benefit. You can pay me based on the number of transactions, or based on the percentage of revenue I drive, or the kind of cost savings I do.' It's probably a small percentage of the business right now, but over the next five years it will become much larger."
Local retailer Dedeman will use SAP SucessFactors solution in order to get its recruiting, internal communication and training programs to a more efficient scale. The program will be used to manager over 9.000
The Association of Business Service Leaders in Romania (ABSL Romania), the organization that represents the local business services sector, will host the 3rd edition of the most important event dedicated to the
Total, one of the largest major integrated oil and gas companies in the world, with activities in more than 130 countries and 98.000 employees opened a corporate support services center at Bucharest in March th
Computaris International Ltd., specialized provider of software development and system integration services for software vendors and communication service providers, reports positive 2016 results and outlook
This year's edition of Romanian Outsourcing Summit joined representatives of the government and top representatives of leading companies operating in the sector of business shared services and related industrie
OUTSOURCING TODAY, the integrated communication platform of the business services sector, powered by The Diplomat Bucharest, presents the Third Edition of the ROMANIAN OUTSOURCING SUMMIT on March 23rd 2017, at