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Sunday, March 04, 2007

The Changing Contours Of ADMS Outsourcing

Earlier TPI results confirmed that the offshore players are garnering more marketshare in the ADMS space. In the large deals space, offshore providers have cornered more than a quarter of new wins globally. Now comes the qualitative part. Recent Performance Monitor research reveals,that India-based firms outperform some or all of the multi-national firms in a number of areas of application development and maintenance (ADM) services and, as a group, the four Indian firms represented perform on a par with the seven multi-national firms in the study. This research looks more balanced as is based on input from 864 clients of eleven leading ADM providers, seven of which are multi-nationals and four of which are India-based.

My own feeling as to where the offshore players score are – their expertise, lead and mastery in terms of managing distributed development while ensuring good process and quality standards. It is indeed a phenomenon to see their methods and skills in terms of expanding opportunities, while beginning small inside accounts. It would be interesting to see how the global majors (who have been by far the leaders in most aspects of services outsourcing) blend their offshore workforce. So far the general sense based on party talks and discussions with executives are that – the integration of these facilities are not so seamless to the extent of providing best possible value to their customers –in terms of speed, quality and price. Independent analyses confirm that the the pricing models of indian headquartered firms are much more transparent, compared to most on-site players. Am sure the global majors would be focusing on improving on those aspects while the offshore leaders would be pushing the needle of effectiveness and enhance the levels of competition. I do beleive that it may well be time to begin talking about more productivity benefits within families of ADMS space(this encompasses a very wide ranging set of techniques, tools and technologies) and publicly come out with measures when service providers have been able to do more with less. The Indian headquartered offshore players have the challenge of maintaining and improving these impressive gains when they begin to compete and win the other 3/4th of the pie in the ADMS space. If past performance is an indicator, they will. The bigger challenge and opportunity for them would be in the much bigger IMS space – where the penetration potential is far higher.

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