Britain’s swelling deficit spells opportunity for Indian information technology (IT) firms as Prime Minister Gordon Brown’s government in UK struggles to save money by outsourcing non-core activities and better managing existing IT infrastructure.

Both the government and the companies chasing business worth around 10 billion pounds (around Rs. 76,800 crore) are, however, trying to make sure they avoid being tainted with the notion that local jobs are being sent overseas. Trimming the deficit is a key task, according to Mint. Excluding financial sector interventions in the wake of the economic crisis, the UK’s net public sector debt was 681.1 billion pounds (48.7 percent of GDP) at September-end, against 562.4 billion pounds (39.2 percent of GDP) at the end of September 2008.

The fear of jobs being lost, a political storm this close to an election, is not easy to overcome, as the Cardiff Council found after awarding a $150 million contract recently to Tata Consultancy Services (TCS). The “reports in the media are very disappointing and completely inaccurate as we have been very specific since this contract was signed that there will be no job transfers,” the council said in a release, reacting to local media stories that the contract would lead to job losses.

Industry observers consider TCS’ Cardiff win as a significant advance for the company as well as for Indian service providers in general. To avoid adding to the perception of job losses, the government is adopting a language that emphasizes “partnership” with technology firms to improve the delivery of government services to citizens. TCS, which won the contract, has also been careful to use the language of partnership rather than sensitive terms such as offshoring or even outsourcing.

As part of the effort to trim the deficit, a British government cost-cutting initiative called the operational efficiency programme (OEP) is targeting savings of nearly 35 billion pounds in public spending by 2013. Between July 2008 and May, OEP undertook extensive evaluation of UK public sector spending and made recommendations to the treasury department.

Savings of around seven billion pounds a year are being targeted through restructuring IT and back-office operations by various government departments, including local government bodies. The savings can be achieved by “increased momentum for shared services and outsourcing,” the OEP study recommended.

Indian IT industry body Nasscom estimates that Indian IT firms earned $50 billion in 2009 with a little more than 17 percent of that, or $8.5 billion, coming from the UK market. However, only a negligible portion of the UK revenue comes from the government sector.

Source:http://www.siliconindia.com/shownews/UKs_financial_struggle_benefits_Indian_IT_firms-nid-63484.html#

Media reports say U.S. outsourcing firm Ciber is planning to double its headcount in its India centers located in Bangalore and Chennai. . The IT services firm reportedly made the decision due to higher demand from clients. Additionally, Ciber is seeking to take advantage of India as an offshoring site.

Ciber,is projected to spike its staff to 659 by the end of next year at its Chennai and Bangalore – the company which takes in $1.2 billion in revenues is planning to double its employees.Tony Hadazi, executive VP of Ciber, said, “Unlike other companies which see them (India) as scale, we see them as strategic and helps us in addressing the requirements of our clients faster.” reports The Economic Times.

With more than 8,500 employees worldwide and 60 centers within the U.S, Ciber is poised to service its customer base efficiently. This onsite presence along with the benefits of Indian offshoring will provide Ciber with an opportunity to service its clients around the clock. . Hadazi, “Our deployment is a differentiator and we are pretty customer-centric by deploying teams at their site.” The Indian support centers are an integral part of Ciber’s European in addition to its U.S. market. Incidentally, some of Ciber’s U.S. clients are serviced exclusively by the support center in Bangalore.

Moreover, Ciber’s clients have also been calling for a move toward offshoring. Though Ciber’s clients have not engaged in outsourcing, they are getting used to the idea now that they are taking notice of its benefits.

According to a Ciber executive, “We have customers who have never done offshoring but they are gradually getting comfortable with it and this percentage is increasing.” Hadazi explained that Ciber has a separate staff working in the Indian market – the division has already made strides in bagging Indian clients, reports The Economic Times.

Ciber is also taking advantage of global relationships with companies such as Ford Motor and Philips by setting up centers for them in the subcontinent.
Jacob Cherian is a staff writer for OffshoreAdvisor, which provides businesses with insight and tools to take advantage of the global outsourcing scene – directory of web design companies, directory of application development companies, and a directory of database development.
Source:http://www.groundreport.com/Business/Outsourcing-Firm-Ciber-Doubles-India-Staff_20/2912137