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Assigning offshore work to India remains strong

CHENNAI: Notwithstanding the continued gains posted by the rupee vis-À-vis the American currency in the past few months, the urge to offshore work to India remains strong.

Asserting this in an interaction with The Hindu, Shiva Ramani, Co-Founder and Chief Executive Officer (CEO), Cybernet-SlashSupport (CSS), said, “the macro picture of wanting to offshore to India is still there.” At the moment, cost benefits for India still remained. However, those moving away from pure cost arbitrage to value arbitrage would be the ones who would survive in the long run, he pointed out.

“The outsourcing market is very hot,” he said. “We (his group) are in the middle of several tech support and infrastructure management deals now. So much so, we have had to walk away from a few prospects. We are also getting into larger and bigger deals,” he added. He was bullish on the customer acquisition front even while being cautiously optimistic on the delivery front.

Rupee appreciation had, no doubt, put margins under pressure. “But the business has not become unviable,” he said.

“We are consciously putting in efforts to manage costs and focusing on improvement in employee productivity through better bench and resource utilisation. We are also doing foreign exchange hedging to manage the rupee appreciation,” Mr. Ramani said. He predicted that corportes would opt for permanent currency management teams within the organisation in the wake of rupee appreciation.

In the medium term, that is, over the next one-two years, he expected some of the extravagant perks that the employees were now enjoying to come down. “I expect the IT and ITeS companies to tighten belt. One cannot also rule out the possibility of five-and-a-half to six-day working week in the IT industry,” he said.

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