Eastern European startups take on India's outsourcing stronghold
Outsourcing

Eastern European startups take on India's outsourcing stronghold

India's huge, successful and highly profitable IT industry is facing powerful headwinds. IT outsourcing is changing, there's a shift to new technologies while growing competition from Eastern Europe and Latin America are forcing India to re-evaluate its strategy.

The new rising stars of the global IT scene are countries such as Poland, Ukraine, Romania, Belarus and Russia. Latin American nations such as Argentina and Brazil are also growing in importance. Although their industries are small compared to the might of India, they are providing stiff competition.

India's industry grew during the offshoring boom of the 90s and early 2000s as businesses from Europe and the US struck outsourcing deals with Indian tech companies. This created a group of tech giants in Bangalore that have become known by the acronym "Twitch" - Tech Mahindra, Wipro, Infosys, Tata Consultancy Services, Cognizant and HCL.

These are the big players in India's market for IT and business process management which could hit $167bn in 2018 and is expected to grow about 8% a year, according to Nasscom, the trade body for the Indian IT industry. But sustaining this growth will require these giants to adapt to the new realities of the global IT market.

Today, the single outsourcing model that they pioneered has changed for good. Rather than hire a single tech giant to handle all their IT needs, businesses are dividing tasks between several providers. The move to cloud means there is less work for outsourcing companies in running data centers. Meanwhile, automation is increasingly taking care of commoditized work such as logging security issues.

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