Service providers bid for outsourcing contracts

Bangalore, Apr 20: Indian Service Providers, who have earned a name for themselves in reliability and quality, are also aggressively bidding for outsourcing projects in the range of 100-200 million USD, according to a senior official of a leading sourcing advisory firm TPI.

As many as seven projects out of 79 in the TPI pipeline for a total value of 22 billion USD were bid by Indian service providers. The contract value for these projects amounted to a little over half a billion Dollars, TPI India partner and Managing Director Siddharth Pai told newspersons here today.

The projects also included some of them bid by Multinational service providers who had firmly established themselves in India and the contract value coming to India would be significantly higher, he added.

These projects would be awarded during the next couple of quarters with billion worth projects to be realised during the second quater, he said, adding that major Indian players in the sector included Infosys, TCS and Wipro.

Stating that the Indian Service Providers have no longer a price advantage, Mr Pai said even the multinationals have started quoting almost the same rates and were even bidding for smaller projects with value less than million.

He said the outsourcing mantra continued to be strong in the Americas as it accounted for 69 per cent of the 83 outsourcing transactions firmed up during the first quarter of 2006. During the same quarter last year the share of the Americas was only 47.3 per cent. Europe, which was also now aggressively mounting on outsourcing, was likely to improve upon in the subsequent quarters, he added.

Releasing the first quarter TPI Index, Mr Pai said the total contract value of .7 billion for the three month period for contracts over million was up by 173 per cent year over year.

Restructuring of first generation agreements had yielded an increased impact on both the volume and value of contracts in the broader market during the quarter with restructurings representing 33 per cent of the total contract value signed. This compared to 24 per cent of total contract value signed during 2005, a record for restructurings. Of the total 22.7 billion Dollars, Business process outsourcing accounted for .3 billion, he added.

UNI