Indian IT-services companies are losing their grip on the global outsourcing ecosystem, a new report has claimed.
Only 10 outsourcers from India made it into this year's list of the 50 best managed global outsourcing vendors, for the 2008 Black Book of Outsourcing. In 2004, Indian outsourcers accounted for half of the list. Nearly 25,000 outsourcing users participated in the Brown & Wilson Group survey, which ended in May.
The best Indian performers on the list were Wipro, Satyam and Genpact, which were ranked sixth, seventh and eighth respectively. In 2006, five of the top 10 vendors on the list were Indian outsourcing service providers.
This year's top honours went to HP, which jumped up from eighth spot in 2007. HP also topped the list of top 10 vendors for financial and accounting outsourcing.
Rounding up the rest of the global top five were other US-headquartered companies: Perot Systems, CSC, Unisys and EDS. The report indicated that the survey closed the day before HP announced its acquisition of EDS.
Indian dominance prevailed in the realm of business-process outsourcing (BPO), with Genpact, Satyam BPO, Wipro and HCL BPO making up the top four vendors. Satyam also was placed fourth on the list of top 10 knowledge-process outsourcing (KPO) vendors.
In a statement on Tuesday, Satyam BPO's chief executive Venkatesh Roddam noted the results as an affirmation of the company's strategic perspective. "The categories in which we have been ranked this year — BPO and KPO — are the key growth areas that we have been focusing on and basing our 'Specialty BPO' positioning on," he said.
The report singled out Infosys's fall from the 50 best vendors list as "surprising". At number 59, this year is the first in five years that Infosys has failed to enter the top 50. It was ranked number 10 last year.
Douglas Brown and Scott Wilson, authors of the report, noted that the company's displacement was accompanied by "rising accounts of client discontentment".
They said: "Over a dozen major customers cited the fact that Infosys has not melded their consulting and service delivery well. US clients cite a lack of American front-office support with an imbalance of too much delivered from offshore."
Despite their slide on the list, Indian players remain a major force in the outsourcing industry, and outsourcers in China are still nowhere close to replacing them. According to the report, Chinese outsourcing companies have failed to make inroads into the top 50 for a second consecutive year.
Brown and Wilson pointed out that, despite a highly skilled workforce and solid infrastructure, "China is still risky", particularly in the areas of partnerships, business stability and distribution channels.
They said: "Revenues are increasing for China's technology providers but hardly touch a fraction of the huge global offshoring market share."
"Based on recent client-satisfaction outcomes, the majority of those outsourcing decision-makers will not rank China as their first choice for upcoming initiatives anytime soon. [They] currently agree that too many barriers exist for China to take India's place as offshoring destination of choice," Brown and Wilson said.
