The Global IT Services Industry - Heading for a Shakeout?


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Case Details:

Case Code : MISA002
Case Length : 11 Pages
Period : 2005
Pub Date : 2005
Teaching Note :Not Available
Organization : -
Industry : Information Technology and Related Services
Countries : Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Offshoring in the early 2000s

Offshoring gained momentum in 2002, following the 2001 US recession which forced huge cutbacks in IT spends of clients. In the past, global vendors like Accenture and IBM would sub-contract a part of the overall spending to Indian vendors. But the slowdown changed the scenario...

A Growing Presence in India

All the Big Six had significantly expanded their presence in India in recent years. Accenture's network of 40 delivery centres across the world employed 35,000 people out of whom 15,000 were in India...

The Indian Calculations

Recent developments in offshoring had made Indian IT services companies very optimistic about their future prospects. In many of the large-scale IT outsourcing deals announced in 2004 40 per cent of the work had gone offshore...

The Road Ahead

How the global IT services industry would evolve in the coming years depended on various factors. Would the clients continue with their multi-vendor strategy, or would they go back to the old days of dealing with a single vendor who would take on the complete job on a turnkey basis?

Would the global giants succeed in ramping up their offshore delivery centres faster than the Indian majors could build up their front ends? Would the Indian companies continue to have an overwhelming cost advantage as in the past?...

Exhibits

Exhibit 1
Exhibit 2: Global IT Services Companies in India
Exhibit 3: India's Top Three IT Services Companies
Exhibit 4: Indian Employees as a Share of Global Count
Exhibit 5: Revenues & Profits - Indian IT Companies
Exhibit 6: Share of India in the Global BPO Market
Exhibit 7: Market Share
Exhibit 8: Size & Growth of the BPO and KPO Sectors in India, 2003-04
Exhibit 9: Financial highlights of Major IT Companies in India

 

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