Is the Indian IT safari hitting a roadblock?

Economic Times
Party’s over, folks. That’s what a new study would have Indian outsourcing companies think, but industry insiders aver it’s far from the truth. With outsourcing being one of the key drivers of the Indian economy, the Chicago-based report almost sounds like the end of the road for India in its bid to be an economic superpower. The study done by consulting firm Diamond Cluster International, predicts that the IT outsourcing boom is over worldwide, including in India, as companies learn to be more strategic. In India, growing labour shortage will see outsourcers shift their focus towards China, the study adds. The report mentions India’s major IT and BPO services hubs, such as Bangalore, Chennai, and Hyderabad, to point out that they’ve reached labour saturation and are looking to tier II cities such as Kolkata, Mysore and Chandigarh for an educated workforce. The study also claims that US-based companies are also ignoring cost factors to outsource to Canada because of proximity and similarities in language and culture. The resource crunch India will face will cause Indian companies as well as its customers to look at other locations for their operations. They feel that this is an opportunity that other countries could grab. Incidentally, 75% of the respondents of the DiamondCluster survey are currently o utsourcing to India. more...