It looks like India’s outsourcing market may have lost a bit of its groove.
It was bound to happen. Exploding growth during the past few years combined with a defined pool of talent has resulted in mounting salary costs, high staff turnover rates and poorer delivery of service. As a result, many North American and European-based companies are now evaluating other emerging markets, such as Vietnam, China and Philippines, for their IT, customer service and call center, and administrative support requirements.
This is distressing news for Indian-based offshore market leaders like Tata , Wipro and HCL Technologies . That’s because they have established low price as the foundation of their value proposition, without significant brand investments to build trust and confidence in the minds of their key audiences (customers, partners, employees and investors).
When a company makes doing business about price, it run the risk of customers finding someone willing to provide a comparable product or service for less. And that is a no win market environment defined by eroding margins and customer churn. (Just ask the folks still providing long distance telecommunications service.)
The Indian IT community should take a lesson from Dell. Yes…they sell on price competitiveness, but they clearly explain to the market through advertising, public relations and other promotional activities how they are able to deliver a high-quality, performance machine for less. (They have one heck of an efficient supply chain .)
At the end of the day, people do business with companies they know and trust. As a business owner and buyer of technology products, I trust Dell. Wipro…Tata…HCL…I’m not so sure.
March 21, 2005, 4:01 pm
India's Lost Groove
Posted by jeffM
Comments (0)
Send this
March 7, 2005, 2:07 pm
US Slips in Technology
There’s nothing subtle about Bill Archey. The President and CEO of the AeA – the largest technology association in the country with more than 3,000 member companies – delivers a message with the not-so-gentle “WAP” of a sledgehammer.
The AeA’s new cry of alarm is about the shrinking gap in technology innovation and competitiveness between the United States and the rest of the world, particularly China, India and Eastern Europe. And after hearing a presentation from Archey and reading the AeA’s new report on the topic, I think a ***** on the head is exactly what we need.
Simply put, America is losing its science and technical leadership and without significant action may one day be relegated to a me-too standing in the world economy. Consider the following:
--According to the National Assessment of Educational Progress, graduating high school seniors in the United States tested 19 out of 21 countries in math and science proficiency.
--China now graduates four times as many engineers as the US while India awards roughly 20,000 more engineering degrees a year than we do.
--The National Science Foundation reports that federal funding of R&D as a percent of GDP has slipped from 1.25 percent in 1985 to .75 percent in 2002.
--Nearly seven out of 100 people in the US have broadband access. Compare that to South Korea with more than 20 percent broadband penetration, Hong Kong with 15 percent and Taiwan with 10 percent.
No other industry has more of an impact on our lives than technology. At Strategic Communications Group (Strategic), we represent a group of companies in innovative markets like Voice over IP (VoIP), global satellite telecommunications, broadband content delivery search, smart card biometrics and RFID. This is the reason why I truly enjoy what I do for a living and why the AeA report is so startling.
We need to recognize that future science and technology leadership is not predetermined to occur in the United States. Technology, software and telecommunications companies are built on innovation, access to capital, effective marketing and sales, and a whole lot of hard work.
Bill, thanks for the “WAP.”
The AeA’s new cry of alarm is about the shrinking gap in technology innovation and competitiveness between the United States and the rest of the world, particularly China, India and Eastern Europe. And after hearing a presentation from Archey and reading the AeA’s new report on the topic, I think a ***** on the head is exactly what we need.
Simply put, America is losing its science and technical leadership and without significant action may one day be relegated to a me-too standing in the world economy. Consider the following:
--According to the National Assessment of Educational Progress, graduating high school seniors in the United States tested 19 out of 21 countries in math and science proficiency.
--China now graduates four times as many engineers as the US while India awards roughly 20,000 more engineering degrees a year than we do.
--The National Science Foundation reports that federal funding of R&D as a percent of GDP has slipped from 1.25 percent in 1985 to .75 percent in 2002.
--Nearly seven out of 100 people in the US have broadband access. Compare that to South Korea with more than 20 percent broadband penetration, Hong Kong with 15 percent and Taiwan with 10 percent.
No other industry has more of an impact on our lives than technology. At Strategic Communications Group (Strategic), we represent a group of companies in innovative markets like Voice over IP (VoIP), global satellite telecommunications, broadband content delivery search, smart card biometrics and RFID. This is the reason why I truly enjoy what I do for a living and why the AeA report is so startling.
We need to recognize that future science and technology leadership is not predetermined to occur in the United States. Technology, software and telecommunications companies are built on innovation, access to capital, effective marketing and sales, and a whole lot of hard work.
Bill, thanks for the “WAP.”
