What can UK IT workers take from strong results at Indian IT giants?

I was talking to Tata Consultancy Services’ (TCS) European head AS Lakshmi today. Like his counterpart at Infosys, BG Srinivas, when I spoke to him last week, there was for the first time a bit of commitment to say that the economy is getting back to normal.

Both companies have posted strong finacial results in the last few days.

 

But should UK IT professionals look positively on this or should they be worried? Obviously with companies such as TCS and Infosys reporting strong results it must be a signal that IT spending is back. But the problem for some IT professionals will inevitable be the fact that many UK based corporates are spending in India and as a result building their offshore staff levels.

 

Could this be the beginning of the end for the in-house IT team? Could the recession’s IT legacy be that it instigated the end of in-house IT? Or will that never happen?

 

Last week ladies’ fashion retailer Aurora outsourced its IT. There just seems to be more and more outsourcing deals and IT professionals are leaving IT in their droves. Recent figures from e-skills also revealed that fewer students are studying IT.

 

e-skills also revealed that businesses are offering less training to in-house IT staff.

 

If the Indian companies are the Bellwethers of the IT services sector it signals that things are getting better. But an IT services bellwether doing well does not automatically result in UK IT professionals benefitting. In fact it could be a sign that things are getting worse for them because so much work is done offshore.

 

It goes for any of the service providers now. IBM, HP, Capgemini, Steria and many, many more have delivery capability in India. Large businesses also have their own captives in low cost destinations like India.

 

But there could be a glimmer of hope because many of the Indian companies are realising the importance of local delivery. The likes of Wipro and HCL are talking it up. The Indian suppliers are not just providing businesses with low cost services but are providing technology to support strategic growth strategies. As a result there is no reason why UK workers cannot work for them in UK customers. Or is this wishful thinking?

 

Some of these firms add thousands of workers every quarter. But how many are UK workers?

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Do we have any statistics for Indian recruitment in the UK?

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TCS's quarterly analyst presentations have a diversity section that shows the %ge of British employees (I think it is about 0.36% of total employees and about 660):

http://www.tcs.com/SiteCollectionDocuments/Investors/Presentations/TCS_Analysts_Q3_11.pdf

It has fallen from about 990 in March 2009.

When you consider the number of UK employees that TCS has acquired from taking over the IT operations from other companies (e.g. Safeway and L&G), TCS makes a lot more UK employees redundant than it ever hires.

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Oops I think it was Somerfields not Safeways.

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