IT outsourcing to pick up next year: Study

IT outsourcing to pick up next year: Study
The Economic Times, July 31, 2009, Page 20

Our Bureau BANGALORE

MIRRORING the global trend, India’s IT outsourcing is expected to remain subdued this year, though it’s likely to pick up during the second half of the next year. Springboard Research in its latest study, ‘Inside the End-Users’ Mind - India IT services demand side analysis’ said most enterprises have reported an impact on their IT budgets because of the economic slowdown, with nearly a third of them slowing their ITrelated investments

“For CIOs, the economic slowdown is clearly an opportunity to manage their costs and they have shown an open-minded approach towards IT outsourcing, further accelerated by an emerging emphasis on improving business performance,” said Sudip Saha, senior research analyst for IT Services at Springboard Research.

According to the research body, the Indian IT services market is expected to grow from $4.1 billion in 2007 to $8.1 billion in 2011, recording a CAGR of 18.6%.

The study said that 65% of the IT decision makers in Indian enterprises expect an increase in their investment in IT outsourcing by their company in the next two years, with 29% expecting investment to remain constant.

Mr Saha said many of the Indian companies will not be able to cut down on costs with their internal IT teams and would be looking at outsourcing for budgetary controls.