Monday 26 March 2012

The Economic Crisis and India’s IT, Software Consulting Growth

Looming economic crisis and continuous recession disillusioned many customers looking for affordable yet reliable services related to IT and software consulting. Numerous business customers left their former service providers in search of a reliable service that is better adapted to meet the challenges of ongoing economic troubles on a global scale, creating gainful opportunities for entrepreneurial-minded IT and software consulting based in developing markets.

Thus, a number of countries in Asia/Pacific region emerged as serious contenders in the race for consumers of IT and software consulting services worldwide, setting foot in new markets, and replacing established market players. The map of the IT consultants that are considered reliable and are in high demand among business customers changed dramatically in the past decade or so. Of course, each country and region has its own leading players in the local market; nevertheless, a global shift toward IT and software consulting services based in India is more than evident, with India boasting some 50 percent of the global market for offshore software consultancy.

Such a development was not unexpected, really, yet it did not happen overnight. It took years to educate a generation of highly skilled professionals in the field of IT, while it took even longer to overcome prejudices related to the reliability of local consultants and the quality of their service. Well-established Western corporations are slow when the matter in question is to choose a new service provider or IT consultant, but when the economic crisis hit Europe and North America cash stripped enterprises were fast to realize they should adjust their budgets to a new reality.

In fact, India’s software consultants have been ready to face the challenge, with numerous IT consultancies already providing services to a broad customer base in Europe and the United States, competing on equal terms with IT advisories based in Canada, Latin America, and Eastern Europe. Moreover, the country is now having trouble to fill the gap in the demand for outsourced services and the number of IT professionals its educational institutions are able to produce within a short period.

Naturally, North American and European governments are experiencing growing pressure from local business communities to adopt measures restricting the outflow of IT related jobs abroad, including IT consulting, software development, . On the other hand, regulatory measures are destined to be unsuccessful in a market environment where corporations compete in a liberal market in which fundamentals like productivity, efficiency, costs, etc., matter. Those are largely populist measures intended to preserve local jobs but they rarely succeed in doing so for good reasons: labor costs in the West are very high, productivity is not among the world’s highest, social benefits of workers burden corporate budgets, to name a few.

Thus, India’s software consultants are the big winners amidst an ongoing, and heated, debate whether outsourcing of services, mainly in the field of IT, is good or bad for Western economies. Demand for such services is growing rapidly worldwide, Western consultants, however, are not able to supply affordable service to an increasing number of mid-sized corporations on a tight budget.

Therefore, the whole debate is heading in a wrong direction, blaming corporations for looking eastward for affordable and reliable IT services, while not realizing that underlying issues of productivity and payroll costs undermine the very competitiveness of the West. In any case, India’s IT and software consulting sector is now in position to gain even greater share of the world market for software consulting services.

Monday 5 March 2012

Globally, Software Consulting Services are Moving Eastward

Software consulting services emerged along with the rise of technologically advanced solutions applied in business environment all over the world. At present, the European Union and the United States are the leading world markets for software consulting, while a growing number of local companies look to outsource those services to service providers outside their respective region. The improving state of the IT education in the Asia/Pacific region, especially in countries like India, led to a situation where European and U.S.-based software consultants are no longer the only source of reliable consultancy services, nor do the services provided by local suppliers offer the best value for money in the market.

Gradually, new hubs of technological research and development, software design and development, and related software consulting, emerged in outside the traditional fortresses of knowledge-based economies in the Western world. India, along with other Asian nations and some countries in Latin America and Eastern and Central Europe, managed to develop reasonably priced software consulting services based on outsourcing, or off-shoring. According to reports by Gartner, Inc., India, the Philippines, Canada and China top the list of the countries where business process is flourishing, software consultancy being a major income generator for their respective IT sectors.

For example, India's software exports have been adding 30 percent a year on average during the past decade thus giving boost to related business sectors like software consulting, support and marketing. Other countries in the Asia/Pacific region also bet on the growing market for IT advisory services, fueled by the increasing demand for affordable and reliable services not restricted by traditional physical and regulatory restraints.

The global online business environment now shapes a market where software consultancies in countries like India or Eastern Europe are well positioned to compete on equal terms with large multinationals, providing tailored, reliable, and knowledge-based services to enterprises across the globe. Search engine optimization (SEO) provided by numerous consultants in the above mentioned countries is just the most visible part of a huge market for software consulting services that spans processes like software implementation, customization, configuration, and support among others. With the crisis-hit enterprises looking for cost reductions, there is enough room for expansion of software consulting in countries smartly investing in IT education and favorable business regulation, most experts in the field agree.

In the course of over a decade, software consultants in India and other countries outside the U.S. and Europe, gained the expertise required to provide full-scale services at the highest level, winning contracts from leading world multinational companies usually based in the West. This professional background, complemented by growing self-confidence and advanced knowledge in the field of IT, boosted the number of software consultants outside the Western Hemisphere which are able to provide world-class service. In result, even leading Western software developers are now looking for the services of India-based consultants to lower costs and get reliable service.

Obviously, the world market for software consulting services is moving eastwards in search for reliable yet affordable product, and, with virtually every business relying on some sort of software, the market for such services is destined to flourish.