Tata Interactive Systems, the pioneer and global leader in E-Learning and Simulations, was recently selected amongst the Top 20 IT Training Companies of 2011 in an evaluation conducted by TrainingIndustry.com. This is the second consecutive year wherein Tata Interactive Systems was chosen and has been conferred as one of the best IT Training Service provider. Tata Interactive Systems also features on the list of the Top 20 Custom Content Companies and Top 20 Training Outsourcing Companies for 2011 by Trainingindustry.com.

TrainingIndustry.com’s annual assessment of training service providers aims to continually monitor several key areas of the workforce development industry and the Top Company Lists help organizations connect with the right training partner to increase productivity and potential. Selection to this year’s Top 20 IT Training Companies was based on the following criteria: Leadership and innovation in IT training; Breadth of IT training and delivery methods offered; Company size and growth potential; Strength of clients and Geographic reach.

“We are delighted to make it to the Top 20 list for the second straight year,” says Rajesh Jumani, Executive Vice President & Chief Marketing Officer, Tata Interactive Systems. “Our innovative solutions have played a key role in enabling key organizational IT initiatives for our global clients. The Top 20 position reflects our commitment to quality learning experience our customers receive”.

Since 1990 Tata Interactive Systems has developed more than 3000 hours of learning every year for over 60 Fortune 500 clients worldwide. TIS has provided strategic learning solutions to organizations across the corporate, education, and government segments.

“Our Top 20 IT Training companies stand out as the best providers in a very competitive segment of the training industry.

Source:http://www.sacbee.com/2011/11/08/4038087/tata-interactive-systems-selected.html

TATA Consultancy Services will hire hundreds of workers as part of a strategy to hit the $1 billion revenue mark in Australia.

TCS Australia chief executive Deborah Hadwen said a robust hiring plan would underpin the target, which she hoped to achieve in three years.

She said current revenues were less than $500 million — a rare move because India-based IT outsourcing companies do not reveal local sales figures.

Ms Hadwen said the company planned to employ 2000 people locally over the next 12 months. Skills in SAP, Oracle, mainframe, IT infrastructure and project management would be highly sought after.

Like many other IT outsourcing firms, the company relies on a mix of onshore and offshore talent to oversee customer accounts.

TCS has about 40 corporate clients locally who rely on its 5000-plus employees based in mutliple locations, including in India and The Philippines.

Ms Hadwen said she had a very clear idea of where she wanted to take the business.

“I want the business to touch a billion dollars within the next couple of years,” she said.

And if the company continued at its historical growth rate of 65 per cent year-on-year, it would meet its goal “well within three years”.

She said the $1bn target was “slightly more than double” what the company did today.

“It’s ambitious but visible as a plan and it’s actually quite exciting,” she said.

The firm is behind one of the largest transformation programs at Qantas in the form of Project Marlin, where it provides applications development for aircraft maintenance management.

TCS has expanded its five-year relationship with Qantas to cover other areas, and

Qantas chief information officer Paul Jones counts TCS as a tier-one partner.

Other bluechip customers include Woolworths, AGL, Superpartners, Foxtel, ING Direct, Vodafone Hutchison Australia and the New Zealand Stock Exchange.

Ms Hadwen said TCS was No 1 among a cohort of Indian IT companies operating locally.

TCS’s rivals include HCL, Wipro, Infosys and Mahindra Satyam, another company Mr Jones placed in his tier-one pool alongside IBM, Fujitsu, Telstra and Optus.

Source:http://www.theaustralian.com.au/australian-it/tata-consultancy-services-to-hire-hundreds-of-workers/story-e6frgakx-1226147354490

Tata Consultancy Services Ltd. (TCS), India’s largest software exporter, is seeking alliances with companies in Japan as it aims to increase sales in the world’s third-largest economy 20-fold to $1 billion.

The software provider is talking to potential partners and building relationships with customers in a market where joint ventures are preferred, Vish Iyer, head of Asia Pacific at Tata Consultancy, said in a phone interview yesterday. It also plans to hire more Japanese nationals and win clients in industries including financial services and automobiles, he said.

Tata Consultancy and smaller Indian rivals are grappling with increased rejection of visa applications in the U.S., where the company gets more than half its sales. The software company expects to sustain 20 percent sales growth for the foreseeable future and is looking to add more business in markets such as Japan, according to Chief Financial Officer S. Mahalingam.

“Japan as a market is a bit more insular,” said Ankur Rudra, an analyst at Ambit Capital Pvt. in Mumbai. “A joint venture might be a route to accelerate the process.”
Japan, the largest market for information technology goods and services after the U.S., accounts for about 2 percent of India’s total software and outsourcing exports, the New Delhi- based National Association of Software & Service Companies said in March.

India’s software exporters have found it harder to win customers in Japan because of language and cultural barriers, Ambit Capital’s Rudra said.
‘Low Penetration’

Still, companies such as HCL Technologies Ltd. (HCLT) are trying to add business in Japan lured by the market’s size. Information technology spending by Japanese government and businesses will grow 6 percent to $136 billion in 2011, according to Cambridge, Massachusetts-based Forrester Research Inc.

“The attractiveness of Japan is that penetration is low,” Iyer said. “As a market they were not open to outsourcing as we understand it. Usually it’s been done through a subsidiary run by a former chief information officer, a joint venture with another company, where they hold a majority.”

Japan contributed about $50 million in annual sales and the company aims to boost that to $1 billion, Mahalingam said in an interview on July 15, without giving a timeframe. The Mumbai- based company, which opened an office in Japan two decades ago, now has 10 major clients in the country, he said.

“If in the U.K. I’m making $1.3 billion or 800 million pounds, there’s no reason why it should be less in Japan,” said Mahalingam. “It cannot be a different world altogether.”

Tata Consultancy fell 0.7 percent to 1,132.45 rupees at the 3:30 p.m. close in Mumbai trading after smaller rival Wipro Ltd. (WPRO) forecast revenue at its main information technology business would grow as little as 2 percent this quarter, dragging Indian software exporters lower. Wipro declined 3.9 percent while India’s benchmark Sensitive Index dropped 0.8 percent.

Local Teams

Tata Consultancy has more than 300 employees in Japan, based in Yokohama, Osaka and Tokyo. The software developer has tried to bridge the language barrier in Japan, Germany and France by building local sales teams, said Mahalingam.

“It’s a Japanese organization that we run there–we’ve created a good front-facing capability,” he said.

Tata Consultancy set up a Japanese-language capability center in Kolkata, India about eight years ago to work for customers in Japan, Mahalingam said. Now, it has 1,300 engineers in Pune, Kolkata and Chennai serving Japanese clients.

The software developer is betting that companies in Japan will step up outsourcing to cut costs and boost productivity.

“There increasingly is a mindset change,” said Mahalingam. “When you have an aging population and therefore when you want to increase the efficiency of performance, outsourcing adds to that efficiency.”

Source:http://www.bloomberg.com/news/2011-07-20/tata-consultancy-seeks-alliances-to-lift-sales-in-japan.html

Demand for Tata Consultancy Services Ltd. (TCS)’s outsourcing services is so robust the information- technology company hired 70,000 workers last fiscal year and plans to add a further 60,000 this year.
Tata Consultancy projects annual sales, which have quadrupled since 2005 to $8.4 billion, will increase 20 percent a year for the “foreseeable future.” That has it and Indian rivals Infosys Technologies Ltd. (INFO) and Wipro Ltd. (WPRO) hustling to find hundreds of thousands of qualified candidates as global IT purchases grow 7.1 percent this year to $1.7 trillion.

Tata Consultancy’s expertise at so-called “body shopping,” or using low-cost IT workers to replace more expensive labor in developed countries, helped it land contracts with Deutsche Bank AG (DBK), Hilton Worldwide Inc. and Air Liquide SA last fiscal year. The company, Asia’s largest computer-services provider by value, reported record annual income of $2 billion.

“As long as there’s growth, you don’t want to leave business on the table,” said Ajoyendra Mukherjee, Tata Consultancy’s vice president for human resources. “What we’re trying to do is make sure the supply chain is large enough to meet our growth requirements in the future.”
Microsoft, IBM Competition

Keeping the pipeline of talent filled is becoming more important as Microsoft Corp. (MSFT) and International Business Machines Corp. (IBM) open facilities in India, and the local banking, finance and manufacturing industries hire their own computer engineers. Attrition at Tata Consultancy, Infosys and Wipro accelerated to its highest annual levels in the year ending March 31 as a post- recession surge gave workers chances to change jobs for raises of as much as 50 percent.

“The spike in attrition over the last four quarters is essentially because of the pent-up demand,” said Rajan Kohli, chief marketing officer at unit Wipro Technologies. “There wasn’t enough of a bench to fulfill that demand. People ended up hiring from each other.”

To stem the exodus, Mumbai-based Tata Consultancy will offer raises of 12-14 percent, the highest in three years, Mukherjee said April 21. Infosys is expected to boost salaries for domestic workers by 10-12 percent this fiscal year, Chief Operating Officer S. D. Shibulal said April 15.

The IT hiring spree is fueled by the expansion of Asia’s third-largest economy, which the International Monetary Fund said would grow by 8.2 percent this year after hitting 10.4 percent in the prior 12 months.

39 New Clients

The Bombay Stock Exchange Information Technology Index has advanced 18 percent in the last 12 months, compared with a 7.3 percent increase in India’s benchmark Sensitive Index. Tata Consultancy, the technology index’s best performer, advanced 57 percent in that period, while Infosys rose 9.2 percent.

India’s $88.1 billion IT services and outsourcing industries were built on so-called body shopping. Firms hired cheap talent, mostly local, to write computer programs and maintain software for foreign companies looking to lower their own costs.

The industry now employs about 2.5 million people, according to a Feb. 15 report by the National Association of Software & Services Companies, or Nasscom, an industry lobby group.

Tata Consultancy had 198,614 workers on March 31, compared with about 41,000 six years earlier, according to annual reports. Last quarter, it added 39 clients, including Air Liquide, the world’s biggest producer of industrial gasses, and Royal Haskoning, an engineering and environmental consulting firm.

Deutsche Bank, Hilton

In the quarter ending Dec. 31, the company won orders from Deutsche Bank and Hilton Worldwide. Deutsche Bank, Germany’s largest, said it would use Tata Consultancy’s banking- transaction platform in 30 countries. Hilton signed a multiyear deal to modernize its software.

The global IT market will grow 7.1 percent this year and 8.7 percent next year, according to a January report by Forrester Research Inc. in Cambridge, Massachusetts. India faces a shortage of 2 million qualified workers by 2020 because only about 26 percent of the annual 600,000 engineering graduates are considered immediately employable, according to Nasscom.

“The supply coming into the economy is great in terms of quantity, but not great in terms of quality,” said Hitesh Oberoi, chief executive officer of Info Edge India Ltd., which owns the Naukri.com website for jobseekers. “A lot of these people have to be trained again from scratch.”
China Expansions

That dearth of talent has spurred IT hiring in China, the Philippines and Eastern Europe, said Jan Erik Aase, a principal analyst at Forrester Research.
Infosys, India’s No. 2 software exporter, has 3,000 workers in China and plans to double that within 18 months, Chief Operating Officer Shibulal said in a May 1 interview. The Bangalore-based company plans to spend $130 million on a new Shanghai campus.

Tata Consultancy is opening offices in China and Latin America, and hiring locals to staff them, Mukherjee said.

“They’re not limiting themselves to India,” Aase said of all the firms. “There’s too much competition. They have to have other alternatives.”
To ensure a pipeline of domestic talent, companies are molding college programs and spending millions of dollars on training. Tata Consultancy dispatches teams to assess university engineering programs and gives hiring priority to graduates of the more than 500 schools it has accredited so far.
‘There is a Limit’

Wipro, India’s third-largest software exporter, started a program to improve the quality of engineering education at rural colleges. That includes videotaping teachers in the classroom and critiquing their methods, said Nagarjuna Sadineni, the program’s general manager.

Bangalore-based Wipro also set up a four-year academy to teach students from other disciplines, including business and the arts, how to be software engineers, said Saurabh Govil, senior vice president for human resources.

“The biggest challenge for the industry is going to be talent,” Govil said. “It is not only for Wipro, but for the larger good of the industry that we’re working on this one.”

Infosys opened a training center in Mysore with 698 faculty members and capacity for 14,000 new hires, according to its annual report for the 2011 fiscal year. The company spends $184 million a year on training.

Tata Consultancy increased spending on recruitment and training by 91 percent last year to $47 million and is expanding its footprint in Trivandrum, near India’s southern tip. Its Peepul Park center can train a few thousand people, and plans are under way to build another facility nearby to handle 10,000 new hires.

Even as the IT industry booms, companies say they recognize the potential for hiring binges to hamper quality and flexibility. Firms are talking more about finding revenue streams that don’t depend on headcount, such as intellectual property and cloud-computing platforms.

“There is a limit to the number of people you can continuously keep on adding, making it a huge organization to manage and deal with,” Mukherjee said. “This can’t be a long- term kind of a model.”

Source:http://www.bloomberg.com/news/2011-06-14/tata-consultancy-hires-70-000-employees.html

Integrated private power utility company Tata Power has said it will expand the rural business process outsourcing (BPO) centre it started at Khopoli in Raigad district, Maharashtra. The initiative has proved successful in creating rural employment in Khopoli and adjoining areas.

The rural BPO inaugurated in September 2009, under the aegis of Mannat Foundation – the community initiative arm of the company, initially employed 47 call agents; which further grew to a capacity of 230 call agents in the last 20 months.

In the backdrop of the encouraging feedback on the standards set by the BPO, Tata Power will add another 100 call agents to the existing team during the current fiscal, thereby taking the total to 330 call agents by the end of the current financial year. Khopoli is situated in the Western Ghats region of Maharashtra state, close to the Tata Power Hydro Generation facility. The call centre lends itself to provide alternative employment to the youth of rural India with an aim of creating self sustained community development.

The call agents for the BPO are selected and hired from Maval and Mulshi region and the adjoining catchment areas. Youths with minimum education ie 12th Standard (passed) with the ability to operate computer and understand English are considered eligible for employment. The selected trainees undergo a month long pre-process training, comprising of basic communication and confidence building skills and post process training and which focuses on developing the capacity of youths as Business Process Outsourcing (BPO) operator. These trainees receive certification after the completion of their training and are employed for the BPO.

The Khopoli BPO is the first venture of Mannat Foundation and has tied up with Tata Business Support Services (TBSS). Mannat Foundation will be responsible for hiring and providing the infrastructure whereas the role of TBSS is to train the employees, maintain the infrastructure with good ambience, provide secured work environment and manage operations of the BPO.

Mahesh Paranjpe, head-hydro stations, Tata Power said, “Tata Power strongly believes in empowering the community development through vocational training and opportunities. Our efforts have borne results and the expansion of this BPO is a testimony of this effort. The response of the locals is overwhelming and has also created a benchmark for others to follow.”

Source:http://timesofindia.indiatimes.com/city/pune/Tata-Power-to-expand-rural-BPO-centre/articleshow/8373371.cms

Indian information technology companies Infosys Technologies(INFY_) and Tata Consultancy Services are taking steps to offset the impact on their business of changes in government policy in the U.S.

Both companies say they’re stepping up hiring of employees in the U.S. in the wake of the Ohio government’s ban on offshoring and the U.S. visa fee hike.

Infosys CFO V. Balakrishnan, says his company is increasing localization and deploying more employees at a client’s site instead of doing that work in India, according to report in Times of India. Meanwhile, S. Mahalingam, CFO Tata Consultancy Services, was quoted saying, “Local recruitments appear to be the most viable option as of now.”

Recruiting local workers at their U.S. offices is a wise strategy for Indian IT firms, because it will assuage resentment about the outsourcing of U.S. jobs, say industry analysts.

Indian IT firms are making localization efforts in other countries in the Americas, too. In March 2010, Patni Computer Systems(PTI_) launched its new state-of-the-art IT business center in Mexico to serve as the hub for the company’s expansion efforts in the Latin American markets. Patni is seeking to build regional delivery centers that leverage the talent of local communities.

Meanwhile, Girish Paranjpe, co-CEO Wipro Technologies,(WIT_) says his company “has long-term strategies for global markets and it will not react abruptly or think differently based on individual events, statements or a temporary environment,” according to the Economic Times. Paranjpe says 38% of Wipro’s employees outside India are local hires and the company plans to raise this percentage to 50%. Wipro has increased local hiring in the U.S. since the recession began and has set up a center in Atlanta for creating local jobs.

John McCarthy, vice president at Forrester Research, says, “There is no reason for India to react hysterically to what the U.S. government is doing,” according to the Times of India. He adds that the increase in visa costs will have a very insignificant impact on profits and, viewed broadly, will not change IT industry economics.

McCarthy believes there is more room for Indian IT firms in the U.S. and that those firms should adopt a glass-half-full strategy toward the U.S. and not a glass-half-empty one.

Source:http://www.thestreet.com/story/10869589/1/indian-it-firms-aim-to-increase-us-hiring.html

Indian firms are looking to expand overseas: not just west, but also east to China, a market with huge domestic opportunities. One such firm is IT services group Tata Consultancy Services (TCS), a company with some 160,000 employees in 42 countries.

“The way it’s panning out in China is that multinationals have used Indian businesses and IT companies, especially the top ones quite well,” says Girija Pande, chairman of TCS Asia Pacific. “What they want to know is whether we are in China, and have we got the capability to manage their business in China.”

“With both those economies, the IT services market is booming,” Pande told INSEAD Professor Anil Gupta in an interview for INSEAD Knowledge. “China is a fragmented market with lots of small players; India has more major global companies — so that’s the difference but both are growing very fast.”

Tata has a three-pronged strategy to expand its business in China. First, it aims to serve multinational customers that have expanded their business in China and need support. Second, it provides a sourcing base for servicing East Asian markets such as Japan, Korean and Taiwan. And third, it hopes to tap domestic demand for IT services and solutions.

But Pande notes there are a few things to bear in mind when doing business in China. Regarding staffing, some 94 per cent of its 1,100 employees in China are Chinese, led by a Chinese head of department. Language, he adds, is also given due attention. When TCS does a global rollout for a large multinational there, several Asian languages such as Mandarin, Cantonese, Korean, Japanese, Thai and Bahasa Indonesia can be handled in China.

This, he says, is different to India. “It can’t be offshored to India. So what we do effectively is the English-language countries get offshored to India in the low-cost centres, and these languages get offshored to China — and that has a very important role when we globally roll out multinationals which are operating across all these countries.”

Outside of China though, Pande says moving Tata to the next phase of expansion will involve restructuring from within. “The challenges ahead are when you acquire talent and integrate global talent into your company, especially at senior management level — how do we provide them the motivations that they are in a global company and not in a large Indian company…The good news for us is the Tata Group itself is globalising: two-thirds of Tata Group’s 60 million dollar income revenue comes from outside, maybe through acquisitions and maybe through growth. We have a parent group which is already globalising.”

One of their key strategies moving forward, he adds, is how to have “non-linear growth”, through intellectual property rights and licensing revenue, cloud computing, and ‘other opportunities’.

“Global footprint, global capital, global talent — these are the three things that you need if you want to call yourself a truly global company.”

Source:http://knowledge.insead.edu/strategy-Tata-outsourcing-China-100712.cfm?vid=441

IT Service providers can now no longer put attention on the internal functions of the organization and the technology but they have to now focus on the quality of the services they provide to their customers and the relationship with their customers. IT Outsourcing is the process to obtain services from an external organization offshore. Outsourcing today is the hottest issue in the nationwide media. Today the outsourcing providers in India like Tata, Infosys, Wipro, Datamatics, etc. are the leaders in the outsourcing industry. Most of the large onshore providers have offshore subsidiaries too.

Outsourcing has become an exciting word. It’s an important concept to understand because of its business applications. In the corporate world, the term “outsourcing” refers to an exact kind of outsourcing i.e. business process outsourcing (BPO). BPO is done when any organization turns over the management side of a particular business process such as accounting or payroll to a third party that is specialized in that particular business process. There are also Outsourcing consultants that assists organizations with structuring outsourcing relationships with the service providers.

Offshore outsourcing or offshoring refers to outsourcing to the IT Service providers in foreign countries like India or China, frequently done to take the benefit of labour cost. Business Process Outsourcing contracts is being repeatedly given to the service providers in the developing countries. Mostly the educated workers in developing countries like India and China work for a much lower wages than the educated workers in developed countries like Japan. There is a large amount of savings from lower wages. In house employment also leads to an expensive investment in comparison to outsourcing.

In recent times, Offshore Outsourcing has become a fiercely debated issue in the national media. In 2001, when the American economy started to come out of recession, unemployment as was expected did not decrease. Offshore Outsourcing was also blamed as one of the factor to the unemployment recovery. Information Technology was a mainly sensitive sector, and many American programmers lost their jobs to low paid foreign workers. The economists however have recently discovered that the rise in unemployment rate is not the effect of offshore outsourcing. In fact, offshore outsourcing has really had a positive impact on the American economy.

Source:http://www.go4outsourcing.com/outsourcing/esteem-of-it-outsourcing/

The Indian IT sector is grappling with high attrition rate even as firms are doling out financial and other benefits to employees, says industry body Nasscom.

“As a result of the slowdown, the IT industry was rather thin on the bench, but now everyone is hiring laterally. As a result, attrition has already become a problem. It will be more problematic over the next 4-5 months,” Nasscom Chairman Som Mittal told PTI.

He added that while the attrition rate was in single digits a few months ago, it is now growing. “Last I heard it was 16 per cent, but it could be inching up depending on the city you are in,” Mittal said.
At Infosys Technologies, the attrition rate rose to 13.4 per cent in 2009-10 from 11.1 per cent in the previous year.

However, for Tata Consultancy Services (TCS) the rate has remained stable at 11.8 per cent as on March 31, 2010.

Companies need to hire freshers from technical institutes and train them to meet the requirement, Mittal said.

“As demand comes back, the need for manpower has also gone up. The industry needs to hire fresh people and build that pipeline. Companies need to hire them (the freshers) and train them, which should help a lot,” Mittal said.

Even though attrition is a challenge for HR managers, it spells good news for job hunters as more opportunities open up along with incentives like retention bonus as companies try their best to attract new talents and retain existing critical resources.

IT biggies have already announced huge hiring plans. TCS, the country’s largest software services provider, has said it will hire 30,000 people this year.

Infosys, India’s second-largest software exporter, on Tuesday said it was looking at recruiting nearly 30,000 people this fiscal, including over 2,000 from overseas.

The third-largest software exporter Wipro has said that its hiring plans will be in line with volume and demand.

Source:http://www.business-standard.com/india/news/attrition-worries-return-to-haunt-it-sector/96944/on

Tata Interactive Systems Features in the List of Top 20 Global Companies Providing Training Business Process Outsourcing Services

Tata Interactive Systems – a strategic training partner in organizational initiatives of global leaders – was recently selected amongst the Top 20 Training Outsourcing Companies of 2010 in an evaluation conducted by TrainingIndustry.com.

TrainingIndustry.com continually reviews training outsourcing service providers to help organizations make informed decisions about their training partners. This annual assessment determines the suppliers’ experience and capabilities and the Top 20 list recognizes the leading training outsourcing companies for their high quality services and comprehensive capabilities.

Tata Interactive Systems (TIS), a pioneer in learning solutions with an experience spanning 20 years, develops more than 3000 hours of learning every year for over 60 Fortune 500 clients worldwide. TIS has provided strategic learning solutions to organizations across the corporate, education, and government segments. TIS’ clients include Barclays Bank; Citibank; HSBC; London Stock Exchange; BP-Amoco; United Nations; British Telecom; Siemens; Vodafone; McGraw-Hill; Unilever; British Airways; Emirates; the Royal Mail Group, and the University of Phoenix.

“TIS’ inclusion in the Top 20 stems from our innovative and impactful contribution to learning. Across industries, we have impressed clients with our commitment, quality, and the sheer range of our learning solutions. This recognition reflects our continuous efforts to raise our performance benchmarks and set new standards in training outsourcing,” says Rajesh Jumani, Chief Marketing Officer at Tata Interactive Systems.

Source:http://www.marketwatch.com/story/tata-interactive-systems-amongst-worlds-top-20-training-outsourcing-companies-2010-05-17?reflink=MW_news_stmp

Malaysia Airlines seals outsourcing deal with TATA Consultancy Services

Under the five-year agreement, Indian consultancy TATA will provide the Malaysian Airline with IT services.

In a statement, the company announced the partnership was part of its wider strategic IT outsourcing programme designed to transform the airline’s IT operations, in hope of delivering seamless internal customer experience.

“One of the key initiatives is fine-tuning our IT outsourcing strategy to deliver the required business results at lower cost,” said the airline’s chief information officer, Faridah Abdul Rahman.

Source:http://www.sourcingfocus.com/index.php/site/newsitem/2230/

Malaysia Airlines (MAS) has sealed a five-year contract with TATA Consultancy Services (TCS) for end-to-end information technology (IT) infrastructure services.

In a statement yesterday, MAS said the partnership was part of MAS’ strategic IT outsourcing programme to transform the airline’s IT operations, as part of its business transformantion plan (BTP2) to deliver seamless internal customer experience.

Chief information officer Faridah Abdul Rahman said: “This is in line with BTP2 to align the role of IT to the airline’s profit and loss. One of the key initiatives is fine-tuning our IT outsourcing strategy to deliver the required business results at lower cost.”

TCS will undertake IT infrastructure management of MAS’ data centres, IT networks and IT security.

TCS will also set up an ITIL V3 compliant service management organisation under a unique build, operate and transfer methodology for MAS.

In a filing with Bursa Malaysia yesterday, MAS announced a final dividend of 3 sen per share.

The entitlement date for the dividend is March 30, while the payment date is April 8.

Source:http://biz.thestar.com.my/news/story.asp?file=/2010/3/16/business/20100316091334&sec=business

Tata Consultancy Services Ltd., India’s largest software services exporter by revenue, plans to hire 30,000 employees in the next fiscal year that begins April 1 to prepare for a likely increase in outsourcing contracts as the global economy recovers, its chief executive said Wednesday.

Several Indian software services companies have said in recent months that the industry is recovering from the impact of the global economic slowdown, which prompted customers in the U.S. and Europe to scrap or delay projects and seek lower rates for products and services.

As a result, software exporters are expecting a surge in the number of outsourcing orders and the Indian companies are accordingly beefing up staff numbers to service such orders.

“More deals from clients who have never outsourced before are (also) coming,” N. Chandrasekaran, who is also the company’s managing director, told reporters on the sidelines of an industry event.

He said 70% of the staff to be hired next fiscal year will be fresh graduates and more than 2,000 will be recruited from outside India.

The Tata Group company’s upbeat staff addition forecast comes after it added just 5,893 employees in the nine months to Dec. 31–the first four to five months of which saw the company, and the industry, facing the brunt of the slowdown.

The company expects to add about 11,500 employees in the current January-March quarter, which would see its headcount go up by about 17,500 in the full fiscal ending March 31.

TCS had recruited 32,354 staff in the last fiscal year ended March 31, 2009, which included about 13,000 from its buy of Citigroup’s captive business process outsourcing. It had added 22,116 people in the fiscal year ended March 31, 2008.

The recovery is, however, marked by cautiousness on the part of clients still reeling from the effects of the slowdown, said Mr. Chandrasekaran.

There will be a lot more “scrutiny” on discretionary spends–non-essential projects that companies adopt to improve operational efficiencies–and the budgets are likely to be split into multiple contracts, he said.

On Europe, which is still lagging the U.S. in the recovery, Mr. Chandrasekaran said: “National banks (in countries like Germany and France) are still not outsourcing, although the global ones have tried the outsourcing model.”

National banks refer to those that don’t have international operations.

The company is looking at markets including Japan, China and France to boost growth going forward, he added.

Source:http://online.wsj.com/article/SB10001424052748704140104575056871506732434.html?mod=WSJ_latestheadlines

In a tough economy, the largest IT service providers — outsourcing firms and systems integrators — have been known to move downstream, seeking smaller deals with smaller customers. Cloud computing — and the ability to reduce the vendors’ cost of service — may also tempt the multi-billion-dollar, multinational IT firms to journey downmarket. Whatever the motivation, $6 billion Tata Consultancy Services (TCS) is making moves in the small and medium business (SMB) arena. Here’s how.

The consulting and business process outsourcing company is “stead-fast in increasing its presence” in that sector, according to research brief from Technology Business Research (TBR). TCS’ offering: IT-as-a-Service.

According to TCS, this product delivers centrally hosted applications in a shared-services environment.

“TCS will deliver the entire IT landscape of the customer organization including hardware, application, and network connectivity to the data centre,” the company says.

The TBR report notes that TCS late last year disclosed plans to migrate IT-as-a-Service on a pilot basis into India, Singapore and Europe.

The report states: “… TCS’ ITaaS solution can help the firm increase its presence in the global SMB market as the solution will be attractive to SMB clients who can leverage it to reduce hardware and software licensing costs.”

But the going won’t be easy. To this point, multinational companies have yet to “break into the SMB market successfully from a services standpoint,” said Erin Hichman, analyst with TBR’s Professional Services Business Quarterly.

TBR believes the task of penetrating the SMB space will be difficult even in TCS’ home base of India. Hichman said local success could be possible if the consulting firm leverages the brand of parent company Tata Group. In India, TCS will likely compete against Wipro and HCLT, she said. Both companies have as-a-service offerings.

Globally, TCS may encounter Fujitsu. Hichman said Fujitsu’s as-a-service solutions are available in Europe. Fujitsu announced its Infrastructure-as-a-Service product in November. Hichman said that service has also rolled out to Japan and North America. Dell Services may also prove a rival as it increases its presence in the SMB market, she added.

Oh, and one more thing: Kaseya’s software could be the platform behind Tata’s IT as a service push.

Source:http://www.mspmentor.net/2010/01/29/tata-looks-to-expand-among-smbs/

Networking major 3Com Corporation (COMS) declared that it has partnered with India’s leading IT services, business solutions and outsourcing company Tata Consultancy Services (TCS) to successfully conduct the Andhra Pradesh State Wide Area Network (APSWAN) project in India. As per this agreement, 3Com will provide enterprise switching, routing and security solutions for the prestigious project that will connect 23 district offices in the state to increase efficiency in government operations.

The government of Andhra Pradesh in India selected TCS for the country’s largest State Wide Area Network (SWAN) project on a five-year Build, Own, Operate and Transfer (BOOT) model. This network infrastructure will help the state government to facilitate various citizen service programs to boost Government to Government (G2G) and Government to Citizen (G2C) efficiencies with the intention of enhancing the e-governance platform. 3Com will develop applications encompassing transport, healthcare, education and municipality services, which will be operational on the e-governance network backbone, scheduled to be rolled out within 12 months.

The company was recently in the news as Hewlett Packard Company (HPQ) announced its plans of taking over 3Com Corporation. The acquisition, valued at $2.7 billion, enables HP to challenge networking leader Cisco Systems Inc. (CSCO) on its own turf. The benefit to 3Com will come through the utilization of HP’s global marketing and distribution network as well as the improved scale of operations.

This apart, the company has recently won two big deals. The first one of them is “Brazil’s Airport Administration” deal, where 3Com and its H3C enterprise networking solutions will provide the network infrastructure for the network upgrade project of 11 main airports in Brazil. Under this project, 3Com will be upgrading the wired and wireless network of the Airport, in order to support the increasing traffic of passengers and employees.

3Com had another win at the South African government’s Social Security Agency (SASSA), wherein SASSA has opted for a distributed network of H3C and 3Com-branded solutions to run its vast social security grant system across the country. The deal, which is valued at $12 million, will help in the implementation of a national network for 600 branch offices around the country over the next three years.

So the company is winning new business deals at regular intervals. 3Com reported decent first quarter 2010 results, with EPS exceeding the Zacks Consensus Estimate, although revenue declined on a year-over-year basis. Within the Networking business, the China-based sales segment (89.2% of total revenue) had revenue of $152.0 million, an increase of 13.3% from the year-ago period. The company is trying hard to maintain its position in China, and eventually the company will capture a greater share of the Chinese networking market, which should prove beneficial for both 3Com and HP.
Read the full analyst report on “COMS”

Source:http://www.benzinga.com/47608/3com-on-a-roll-analyst-blog

Consultoria indiana obtém em 6ª posição no ranking FinTech100 e subsidiária americana é homenageada pela Honda como Fornecedora do Ano.

A Tata Consultancy Services (TCS), empresa de tecnologia da informação do Grupo Tata, recebeu recentemente dois grandes prêmios internacionais como reconhecimento ao padrão de qualidade de seus serviços prestados a clientes do mercado financeiro e do setor industrial.

A companhia foi classificada em 6º lugar na categoria Prestadora Líder Global de TI no FinTech100, uma lista internacional que anualmente contempla os fornecedores de tecnologia de maior destaque no mercado financeiro mundial. Avaliada de acordo com o faturamento do ano fiscal e a porcentagem da receita atribuída aos serviços financeiros, a premiação desse ano colocou a TCS entre as dez primeiras colocadas.

O fato é que mais de 40% da receita da companhia é proveniente de serviços financeiros, bancários e de segurança. Segundo N.Ganapathy Subramaniam, Presidente da TCS Financial Solutions, o título não surpreende, “afinal nosso Global Network Delivery Model, a solução TCS BaNCS e os serviços completos integrados entregam segurança e agilidade aos clientes, além de ser o único meio para conectar-se continuamente com seus clientes ao redor do mundo.”

Além disso, a operação norte-americana da TCS foi agraciada com o Top Honda Performance Award, em que a Honda of America Mfg., Inc. reconheceu a TCS por atingir um excelente desempenho no fornecimento de produtos e serviços que apóiam a fabricação da Honda em Ohio. A nomeação recebida foi a de Supplier of the Year (Fornecedor do Ano) na categoria de Serviços de Tecnologia da Informação. “Em nome da equipe Honda, estamos satisfeitos pelo esforço notável da TCS em satisfazer as necessidades de nossos clientes,” declarou Bill Easdale, Gerente de Divisão MRO (Manutenção, Reparos e Operacionais). “Como prestadora de serviços de TI, a TCS está nos ajudando a responder rapidamente às mudanças do mercado e ao mesmo tempo a fornecer aos nossos clientes ótima qualidade e melhor preço em nossos produtos.”

Sobre Tata Consultancy Services (TCS)[14]

A Tata Consultancy Services (TCS) é a empresa de tecnologia da informação do Grupo TATA, que atua na entrega de serviços de TI, soluções de negócios e outsourcing. A TCS opera em 42 países e conta com mais de 143.000 profissionais. A companhia encerrou o ano fiscal 2008-2009 com faturamento de US$ 6 bilhões.

A TCS América Latina é o braço de negócios da empresa indiana que opera em países como Brasil, Uruguai, Chile, Argentina, Colômbia e Equador. Mais de 7200 consultores fornecem serviços de TI, outsourcing e BPO para mais de 150 clientes. Com operações no País desde 2002, a TCS Brasil conta com mais de 1300 profissionais e cerca de 30 clientes, entre eles Grupo Santander, Cummins, Eaton, Goodyear, Brasil Telecom e Grupo OESP. A companhia possui dois Centros de Desenvolvimento no Brasil, localizados em Barueri (São Paulo) e Brasília, ambos com certificação CMMi 5 (Capability Maturity Model Integration). A empresa detém ainda as certificações máximas referentes à Segurança da Informação (ISO27001) e Gerenciamento de Serviços de TI (ISO20000). Website: www.tcs.com

Source:http://www.segs.com.br/index.php?option=com_content&task=view&id=41798&Itemid=177

As America’s top banks emerge from the Troubled Asset Relief Program (TARP) and the economy shows signs of recovery, Indian outsourcing vendors

Tata Consultancy Services, Infosys and Wipro are set to gain new offshoring projects worth around $1 billion over the next 1-2 years.

Among the firms seeking operational efficiencies by outsourcing non-core IT and back office projects to India are JP Morgan, Goldman Sachs and Morgan Stanley—which received approval to buy back government stake worth $68 billion earlier this year, as well as American Express, Bank of New York Mellon Corp and Capital One—which have started repaying government debt. Many of these banks had deferred new offshoring decisions as they attempted to cope with TARP funding requirements and internal restructuring processes.

Experts such as Andy Efstathiou , director of banking sourcing practice at research & consulting firm NelsonHall, said US banks are increasing offshoring. “Since the beginning of the economic crisis, many of these contracts have been put on hold. That is beginning to change. It is looking like Q4 of 2009 is shaping up to be a 20% growth over Q4 of 2008,” he told ET in an interview.

The US government’s decision to allow these banks to repay TARP funds also reflects a growing pressure to operate independently devoid of any political and public interference.

In a September survey of around 480 firms by Efstathiou, only 2% said they plan to reduce offshoring, while almost 37% said they will increase offshoring. “The financial services firms we have spoken to intend to increase spending on offshoring. Specifically, in a survey of firms we did in September 2009, only 2% expect to spend less on offshoring, the rest expect to spend the same (61%) or increase spending offshore (37%),” he added.

The merger of the banking systems of Bank of America and Merrill Lynch, among many other such deals, is creating newer opportunities for offshoring and outsourcing vendors.

Source : http://infotech.indiatimes.com/outsourcing/US-banks-set-to-begin-offshoring-/articleshow/5261028.cms

Tata Consultancy Services Ltd (TCS.BO), India’s top software services exporter, reported a 28.7 percent rise in quarterly net profit, beating estimates, as it won more outsourcing deals, cut costs and pressure on fees eased.

The company, part of the Tata Group that spans commodities autos and services businesses, said net profit in July-September rose to 16.24 billion rupees ($351 million) from 12.62 billion rupees reported a year ago under U.S. accounting rules.

A Reuters poll of 14 brokerages had forecast a net profit of 15.15 billion rupees for the firm which counts Citigroup (C.N), General Electric (GE.N), General Motors, Lloyds TSB (LLOY.L), Ferrari and American International Group among its clients.

Tata Consultancy’s quarterly profit under the Indian accounting standards was 16.42 billion rupees. India’s nearly $60 billion outsourcing sector is seeing some signs of revival in business prospects after getting badly hit by the global economic slowdown and financial sector turmoil that had forced clients to shut the tap on technology spending.

Infosys Technologies (INFY.BO), the No. 2 software services exporter, last week slightly beat estimates in its quarterly net profit and raised its forecast for revenue and earnings in dollar terms for the full year to March. [ID:nBOM359212]

Ahead of the announcement, shares in Tata Consultancy, which provides services such as consulting, system integration and back-office outsourcing, ended up 2.8 percent at 599 rupees in a Mumbai market .BSESN that rose 0.7 percent. ($1=46.3 rupees)

Source: http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSBMA00616720091016

Global IT (SaaS) outsourcing can be defined as a strategy that allows corporations to redesign, redefine, and reshape organizations by transferring the management and/or day-to-day execution of a business function to an external service provider. Used responsibly, new technologies such as mobile cloud computing and software as a service (SaaS) can generate enormous company benefits (35% cost savings) as organizations seek internal restructuring to increase earnings and overall efficiency. Worldwide there are two countries that stand at the forefront of the global outsourcing movement: India, which is considered the standard for outsourcing IT services, and China, which has a strong reputation in the outsourcing of manufacturing work.

India made the decision to focus on IT expertise early on; it also made developing competency in the English language a nationwide priority, thus increasing its competitive advantage in the global marketplace. India’s economy has developed through the promotion of internal consumption rather than on exports.

According to Gartner IT research and advisory firm, reports that the worldwide SaaS market forecast that it would grow to $19.3 billion by the end of 2011. In January, IT research company IDC estimated that 76% of American organizations would use at least one SaaS-delivered application by the end of 2009.

India’s top IT companies make up approximately 45% of the entire global market. Companies like Tata, Infosys (INFY), and Satyam (SAY) enjoy worldwide reputations and attract and land multinational deals every year. In addition to English language competency and IT expertise, trust in those companies, and in India as the go-to-country for IT outsourcing, has grown because the nation successfully combines low labor costs with Western management skills.

The software and services SaaS exports segment grew by 29% (in USD) to register revenues of $40.4 billion in FY07-08, up from $31.4 billion in FY06-07. The domestic segment grew by 26% (in INR) to register revenues of $ 11.6 billion in FY07-08. According to the latest Nasscom rankings, Tata Consultancy Services Ltd., Infosys Technologies Ltd. (INFY) and Wipro Technologies Ltd (WIT) are the top three revenue generators in India.

The Indian software industry is set to keep up its growth rate despite the slowdown in the economy. The National Association of Software and Services Companies (Nasscom) has forecast a strong outlook for FY10-11 strong with software and services revenue seen growing by 21-24%. The software and services SaaS exports are set to hit the $50 billion-mark. Below check out the top ten players in the Indian IT industry.

Tata Consultancy Services
Founded in 1968, TCS is one of India’s largest corporate houses. It is also India’s largest IT employer with a staff strength of 111,000 employees. The company began as a division of the Tata Group, called the Tata Computer Centre. Its main business was to offer computer services to other group companies. Soon the company was spun off as Tata Consultancy Services after it realized the huge potential of the booming IT services. Its annual sales worldwide stands at about $5.7 billion. During the year 2007-08,TCS’ consolidated revenues grew by 22% to Rs 22,863 crore ($5.7 billion). S. Ramadorai, is the chief executive officer and managing director of TCS.

Wipro
What started off as a hydrogenated cooking fat company, Wipro is today is a $5 billion revenue generating IT, BPO and R&D services organization with presence in over 50 countries. Premji started Wipro with the ‘idea of building an organization which was deeply committed to values, in the firm belief that success in business would be its inevitable, eventual outcome’. The company has over 72,000 employees. Wipro’s revenues grew by 33% to Rs 19,957 crore (Rs 200 billion) for the year ended March 31, 2008. The net profit grew by 12% to Rs. 3,283 crore (Rs. 32.83 billion). The revenues of the combined IT businesses was $4.3 billion with 43 per cent YoY growth.

Infosys
Infosys Technologies Ltd was started in 1981 by seven people with $250. Today, the company boasts of revenues of over $ 4 billion and 94,379 employees. The company is now headed by Kris Gopalakrishnan. The income for the quarter ended June 30 2008 was Rs 4,854 crore (Rs 48.54 billion). The net profit stood at Rs 1,302 crore (Rs 13.02 billion).

Satyam Computer Services (SAY)
Established in 1987 by Ramalinga Raju, Satyam has a staff strength of 51,000 employees. In 2008, the company’s revenues crossed the $ 2-billion mark. A simple, yet extensive management model to create value, which promotes entrepreneurship, a focus on the customer, and the constant pursuit of excellence,’ is the company’s mantra for success. In FY2008, its revenues saw a growth of 30.7% to Rs 8,473.49 crore (Rs 84.73 billion) compared to fiscal 2007. The net profit stood at Rs 1,687.89 crore (Rs 16.87 billion), a growth of 20.2% over fiscal 2007. Satyam is among the youngest IT service companies to reach $1 billion in annual revenues.

HCL Technologies
HCL is a leading global technology player with annual revenues of $4.9 billion. The HCL Enterprise comprises two companies listed in India, HCL Technologies and HCL Infosystems. Founded in 1976, HCL is one of ‘India’s original IT garage start ups’. The HCL team comprises 53,000 professionals of diverse nationalities, operating across 18 countries.

Tech Mahindra
Tech Mahindra was incorporated as a joint venture between Mahindra & Mahindra and BT plc in 1986 under the name of ‘Mahindra-British Telecom’. Later, the name was changed to ‘Tech Mahindra’, in order to reflect the diversification and growth of the client base and service offerings. Tech Mahindra is a global systems integrator and business transformation consulting firm focused on the communications industry. Tech Mahindra’s net profit rose 8.57% to Rs 196.4 crore (Rs 1.96 billion) on 6.09% growth in net sale to Rs 911.6 crore (Rs 9.11 billion) in Q3 December 2007 over Q2 September 2007.

Patni Computer Systems (PTI)
Patni Computer Systems Ltd one of the leading global providers of information technology services and business solutions. The company has clients across the Americas, Europe and Asia-Pacific locations. The company has serviced more than 400 Fortune 1000 companies, for over two decades.

i-flex Solutions
iflex started as a division of Citicorp (now Citigroup (C)), wholly owned subsidiary called Citicorp Overseas Software Ltd. (COSL) in 1991. In the mid-90s, CITIL developed Flexcube at its Bangalore development centre. After the launch of Flexcube, all of CITIL’s transactional banking products were brought under a common brand umbrella. CITIL changed its name to i-flex solutions to reflect its growing independence from Citicorp and to strengthen its Flexcube brand.

MphasiS
MphasiS Limited was formed in June 2000 after the merger of the US-based IT consulting company MphasiS Corporation has staff strength of 27,000 people.

L&T Infotech
L&T Infotech is a global IT services and solutions provider. It is a subsidiary company of is Larsen & Toubro Ltd. (L&T), an engineering, manufacturing and construction conglomerate, with global operations. Originally founded as L&T Information Technology Ltd (LTITL), a wholly-owned subsidiary of Larsen & Toubro Ltd (L&T), the company changed its name to L&T Infotech on 1st April, 1997. In 2004, it tied up with Fidelity Information Services, a division of Fidelity National Financial to provide banking solutions for the Indian banking industry. In 2007-08, L&T had recorded revenues of Rs 29,600 crore (Rs 296 billion).

In comparison, China has long been known for its low cost of labor and its evolving infrastructure, and the country has attempted to develop its economy by focusing on exports as opposed to growth through internal consumption. China is a classic example of an emergent economic power. Since opening its doors to globalization, China has efficiently utilized its resources, which mainly focused on cost advantages. Conscious of its deficit in technological expertise, China concentrated on a practical business – manufacturing.

The government, aware of the value of diversification, has continuously sought other strategies to ensure growth and has undertaken efforts to support other economic sectors, particularly its IT industry. In 2008, it handled approximately $1.6 billion in IT outsourcing services and about $14.2 billion in software exports. Japan, for one, outsources many of its IT needs to China.

China versus India

In comparison, China has long been known for its low cost of labor and its evolving infrastructure, and the country has attempted to develop its economy by focusing on exports as opposed to growth through internal consumption. China is a classic example of an emergent economic power. Since opening its doors to globalization, China has efficiently utilized its resources, which mainly focused on cost advantages. Conscious of its deficit in technological expertise, China concentrated on a practical business -manufacturing.

The government, aware of the value of diversification, has continuously sought other strategies to ensure growth and has undertaken efforts to support other economic sectors, particularly its IT industry. In 2008, it handled approximately $1.6 billion in IT outsourcing services and about $14.2 billion in software exports. Japan, for one, outsources many of its IT needs to China.

China’s international deals focus mainly on product development, but it has conducted a great deal of testing for IT projects as well. China has mostly handled low-end, relatively uncomplicated IT applications, but it can and does manage mid-sized applications, primarily orders from Japan and Korea. The country desperately hopes to land multinational deals in order to prove itself as a leader in IT outsourcing. As such, the Chinese government is making a significant effort to heighten the IT industry’s appeal to foreign companies and investors.

Currently, standardized IT services are outsourced to China and the more complex IT services are entrusted to India. This pattern will likely continue until China develops its IT industry and addresses its major weaknesses. The issues cited most often in the literature are the level of IT expertise of Chinese workers and concerns about intellectual property rights.

While many people claim that conditions for IT outsourcing in China are not as ideal as those in India, this statement was far truer in the past than it is today. India itself is aware of the rising Chinese competition and the country’s business experts expect that it will not be long before the Chinese improve their deficiencies in order to attract more customers.

Infrastructure

China: The government has built entire cities and towns dedicated to the IT industry, presenting almost perfect conditions for companies. The most prominent example is Shenzhen, one of the fastest-growing cities in China and a preferred location for foreign investors. Moreover, the government offers tax deductions, financial support, and subsidies for new establishments. Large companies, such as TCL, China’s largest electronics manufacturer, have established themselves in Shenzhen.

India: India is considered to have a fairly weak infrastructure and many external companies claim that it is insufficient and inferior to China’s. In addition, the public interest sometimes prevents changes. In China, however, once a decision is made by the government, it is implemented quickly, as with IT infrastructure expansions.

Market Structure

China: Unlike India, China does not have many large IT companies. Market experts often note that the highly fragmented nature of the IT industry in China needs to change as small companies are riskier and less reliable partners than major players. Many people argue that China’s IT market needs to consolidate in order to become more competitive.

India: The history of headlines about the Indian IT industry has been a source of alarm. For example, at the beginning of 2009, it was revealed that the Satyam company had accounting discrepancies and the resulting negative publicity has affected the entire industry and raised the question of whether such problems could have occurred in China. Many foreign companies and investors see their businesses as endangered due to these revelations as it showed that regulations and laws in India were not as developed as expected.

To deal with the impending threat of China, Indian companies are also starting to acquire Chinese IT companies, opening the door for India’s involvement in the burgeoning market. In 2005, India invested nearly $50 million in the Chinese IT industry, mainly comprised of stakes in Tata and Infosys.

Quality/Track Record

China: One of the major concerns for foreign companies interested in investing in China is the country’s lack of protection for intellectual property in the form of trademarks, copyrights, or patent laws. The nation has updated its laws to fulfill international demands and in 2004, China announced stricter laws on intellectual property rights. Penalties for defiance of these laws have been raised significantly since then.

India: India has more Capability Maturity Model (CMM)-certified companies than China. CMM is a program that determines the quality of software processes in organizations. While all of India’s top 30 companies are CMM certified, only 6 of the 30 top companies in China are certified, clearly showing the gap that the country will have to fill within the next few years.

Labor Availability

China: Two serious issues linger in China—English language and IT skills. English is obligatory in interacting with foreign businesses, and while the Chinese educational system tries to emphasize the advancement of English, the population still seems to be lacking in this area. In 2005, about 0.77 percent of China spoke English, compared to 10.66 percent of the population in India.

In addition, the country’s IT expertise is not yet at a desirable level. Although many students graduate with IT degrees from universities every year, the majority of China’s IT professionals still have less than five years’ experience. Employees will require more training in order for China to become a competitive global force.

India: India has the disadvantage of higher labor costs than China. Although India has been known for its large pool of talented, low-cost workers, its wages have jumped by 25 percent since the onslaught of globalization.

Conclusion

As China continues to develop, there will be fewer reasons for an external company to avoid establishing itself there. In fact, it may be that in order to stay competitive and decrease additional costs, companies will be obliged to outsource their IT needs to China. The country’s potential has already been recognized by companies like IBM, General Electric (GE) Medical, CISCO (CSCO), Oracle (ORCL), Salesforce (CRM), Microsoft (MSFT), Google (GOOG) and Hewlett-Packard (HPQ), all of which have established major SaaS presences. If the IT industry develops as expected, China could capture opportunities worth $56 billion by 2015. India’s acquisition of Chinese companies is a direct indicator of China’s growing IT outsourcing power.

The country is trying to entrench itself in the Chinese IT industry because it anticipates China’s future capabilities. Many authors argue that China and India should consider working together in the field of IT—China would gain access to important IT expertise, while India would benefit from cheaper labor costs and a better infrastructure.

Today, India still has the lead over China in IT outsourcing and its advantages over China are still distinct. While China will almost definitely become an important force in the IT industry, the country still needs more time to develop its competencies. Many think that the Chinese IT industry will have to consider acquiring or partnering with foreign IT companies in order to grow and compete. Lenovo’s (LNVGY.PK) acquisition of IBM’s computer hardware business is an example of how Chinese companies can expand and “go global.” China’s leading software company Huawei Technologies has also established joint ventures with Western companies such as IBM, Siemens (SI), 3Com (COMS), and Symantec (SYMC).

Conversely, as China closes the gap between itself and India, India will have to make adjustments in its laws to prevent further scandals and companies will have to reconsider their strategies to make their offerings more attractive and maintain their customer bases. If India wants to sustain its reputation as the leader in IT outsourcing, it must also focus on both innovating and furthering its talents.