Infosys Technologies disappointed with its April-June 2010 quarter performance, with its profit growth declining 2.4% from a year ago. But this time, the performance of the IT bellwether did not exactly presage a trend. Its peers TCS and Wipro surprised the street while HCL Tech’s performance was in line with market expectation.

TCS saw its post-tax profits climb 24.3%, from a year ago, and Wipro reported a 31% rise in its net income from IT services, despite pressures from an appreciating currency. HCL Tech’s net income grew a modest 3.7%. But the growth in client additions, net increase in staff hiring and the 10-20 % salary increases indicate the outsourcing business is gradually returning to normal.

Of course, it has not returned to the days of heady growth experienced till the financial crisis hit the globe, and may not either anytime in the foreseeable future. For, there is increased pressure in countries such as the US to keep jobs at home and the sovereign credit crisis in the southern European countries would weigh on the performance on the outsourcing companies. These along with the currency fluctuation can spell trouble. Europe is the second-largest market for Indian software companies: it accounted for about 20% of Infosys revenues, 28% of TCS, 25% of Wipro and 26% of HCL.

The domestic market account for a small portion of the software majors’ revenues; in the instance of Infosys, income from domestic business was as low as 1.7%.

Even as the global environment remains uncertain and pricing pressures persist, seeking opportunities in the domestic market will stand the companies in good stead. E-governance in particular presents a great opportunity, and the unique ID project is only one such projects.

The government has rolled out or intends to roll out extensive IT infrastructure for the new pension scheme, a national treasury management agency, the tax information network, and goods and services tax, all of which would be software intensive. The big four should not only seek partnership with the government to roll out these projects, but should put some of their brightest people on the task. India too deserves to benefit from its software prowess.

Source:http://economictimes.indiatimes.com/opinion/editorial/ITs-a-mixed-bag/articleshow/6239712.cms

Ci&T, a consulting and technology outsourcing services company, today announced that it has competed a stellar first half of 2010, with increased revenues from both current and new client projects like MetLife, an Innovation Program specifically aimed at helping developers create applications for Apple’s iPad and other platforms risk-free, multiple industry award wins and educational initiatives to support its commitment to and delivery of Lean application development.

For Ci&T, 2010 has focused on innovation, education and working with its global clients on new projects that do nothing but add value to their organizations:

New Client Engagements – Ci&T completed more than 100 new application development projects and more than 350 “sprints” in 1H 2010, including the announcement in March of a completed project for leading insurance and financial services provider MetLife.
Innovation Program – In June, Ci&T launched the pioneering Innovation Program, its first-ever application prototype design program for current and prospective clients. Companies that leverage this new initiative will be the first to benefit from customized mobile software built specifically for the purpose of providing new and innovative uses in both commercial and business applications, with no risk to the participating company. The first application developed through the initiative, Zen Space, is now available exclusively for the iPad and available through Apple’s App Store.

Nearshore Americas Top 50 Power Ranking – Also in June, Ci&T’s founder and chief executive officer, Cesar Gon, was named the eighth most influential executive in nearshore outsourcing in the first-ever independent ranking of sourcing leaders in the Americas.
Global Outsourcing 100® – For the fourth consecutive year, Ci&T was named a Global Outsourcing 100® outsourced service provider by the International Association of Outsourcing Professionals® (IAOP®), rising to number two in the “Rising Star” judging group on the list (up nine spots from its previous ranking).

Interactive Media Award – Most recently, Ci&T’s CreativeLab full-service digital agency was honored with the Interactive Media Award (IMA) for Outstanding Achievement in the “Consumer Goods” category for its work on the RoC Multi Correxion Website. The IMAs recognize the highest standards of excellence in website design and development and honor individuals and organizations for their outstanding achievement.

Executive Education Events – Throughout 1H 2010, Ci&T hosted live events in New York, Philadelphia, Chicago and Atlanta aimed at educating senior-level IT executives on the state of Lean principles and agile methodologies in outsourced software development. Featuring presentations from Dave West, senior analyst, Forrester Research, these events drew executives from all over the IT spectrum to listen and receive updates an update on the state of these practices in the market today.

“2010 has clearly been a tremendous year for Ci&T thus far, as the benefits of Lean application development have been recognized and increasingly adopted by companies looking to outsource development to trusted, cost-effective nearshore providers like our company,” said Leonardo Mattiazzi, vice president of international business for Ci&T. “We believe our work with global clients truly underscores the ability of nearshore outsourcing to maximize the value of the Lean approach, and we’ll continue to deliver the same value to clients through the remainder of the year and beyond.”

Source:http://www.earthtimes.org/articles/press/built-lean-it-principles,1404709.html

Report says IT outsourcing dropped 30 percent in 2Q 2010 compared with the prior quarter, and 23 percent year-on-year. However, innovations such as cloud computing are beginning to influence the market.

IT outsourcing was among the many areas to exhibit declines in Q2 2010, according to the Global TPI Index, which measures commercial outsourcing contracts valued at $25 million or more. Ongoing economic uncertainty is keeping a lid on global outsourcing overall, according to the report. The TPI Index recorded total contract value (TCV) of $18.1 billion in the 2Q 2010, down approximately 13 percent when measured both sequentially and year-over-year. TPI is a global sourcing data and advisory firm.

By scope, IT outsourcing TCV during 2Q 2010 fell nearly 30 percent from the prior quarter and 23 percent year-over-year. A five percent year-on-year increase in first-half IT outsourcing TCV — to $29 billion — was fueled by large 1Q contract restructurings, rather than by 2Q performance. However, innovations such as cloud computing are beginning to influence the approach companies take to their service-delivery strategies. TPI finds that 78 percent of the firm’s clients have had internal discussions about cloud computing.

More Outsourcing Trends

For first-half 2010, the global market TCV for outsourcing overall was $38.9 billion, flat with a year ago following an unprecedented surge in contract restructurings during the 1Q 2010. In 2Q 2010, restructurings accounted for 20 percent of TCV, in line with historical trends.

The 2Q 2010 TCV of contracts for business process outsourcing (BPO) rose 60 percent over the 1Q 2010, which was one of the worst on record in this segment, and 20 percent over 2Q 2009. Yet, overall BPO activity remained weak by historical standards, with the greatest growth in contracts valued at $10 million to $25 million.

Industry Verticals Vary Widely

The Global TPI Index found declining outsourcing activity in sectors such as financial services, manufacturing and telecom & media, even in the more robust Americas region. These three sectors are as critical as ever to the outsourcing market, and their relative sluggishness restrained overall market growth in 2Q and first-half 2010. The travel, transportation and hospitality industry saw impressive gains for the second straight quarter. The retail sector, with four successive halves of growth off a small base, remains an industry to watch, as retailers continue to experience top-line revenue pressure and pursue cost reductions from outsourcing.

Source:http://www.cioinsight.com/c/a/Outsourcing/IT-Outsourcing-Plummets-in-2Q-2010-643137/