Recession in outsourcing sector is over. Day three Nasscom 2011

Here is PA’s Alex Blues’ take on the final day of the Nasscom India Leadership Forum.
Interestingly it appears the IT industry believes that the outsourcing recession is over.

See Alex’s introduction to Nasscom 2011 as well as his blog post on day one and day two.

Also see his posts from last year in this blog post.

Thanks for your contribution Alex.

Alex Blues, IT sourcing specialist, PA Consulting Group

“It is close of play at Nasscom 2011, which this year has changed from a large Indian conference to a large global conference in India.

It would appear from the twenty senior IT industry representatives we interviewed – including ten CEOs – that the recession in the outsourcing industry is over. The industry is expecting growth to increase from 16 to18 per cent in 2010 to in excess of 23 per cent in 2011 for IT, with BPO being just slightly lower.

The key to many of our discussions has been focus, by both domain and geography. There is a need to be consistent – a big change from three to five years ago when the offerings were very generic.

The market is no longer interested in the inputs. What the market is interested in is the business output. As a result, the economic buyer is moving from the application owner, often found in the IT department, to the service owner, who is often outside the IT department.

In 2010 innovation was driven by cost. In 2011, innovation is being driven by many reasons.  Cloud has sparked many debates, and while there is a majority verdict that it will change the shape of the industry, people still want to know ‘when will this happen?’. Other discussions have included; whether the cloud will add to revenues or cannibalise existing income, whether it will be used more widely – with new systems and in new geographies – or whether it will actually have an impact on the current systems of end users.

Consolidation has been and will continue to be a trend, particularly between the smaller suppliers. This will allow them to provide the focus I mentioned earlier in this blog, and makes my concluding thought a promising one – the market is definitely maturing.