NASSCOM 2011 - Sourcing is a Global Business

By Pa Consulting Group, PRNE
Sunday, March 13, 2011

PA Consulting Group's Alex Blues, IT Sourcing Expert, Reports on the Themes Discussed at NASSCOM 2011

LONDON, March 14, 2011 - According to industry experts at NASSCOM 2011, the recession in the IT
outsourcing industry is over. The industry is expecting growth in IT
outsourcing to increase from 16 to 18 per cent in 2010 to over 23 per cent in

Throughout the conference a number of topics have emerged as key. These

Cloud sourcing - there are people that are passionate about
Cloud, who believe that Cloud is going to be at the centre of the industry
very quickly, regularly citing statistics such as "25 per cent of all
outsourcing business will be Cloud-based in two years." The feeling is that
this will represent new business rather than replacing existing legacy
business. A key message about Cloud sourcing is that it will empower the
business user and the CIO really needs to watch out.

Others are slightly more hesitant, stating that Cloud sourcing
holds promise for new or peripheral applications, but that it will be some
time before it is suitable for core and critical applications. The general
conclusion seems to be positive and the key message is that the decision
maker is going to change from application owners to service owners.

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

Innovation - in 2010 innovation was driven by cost. In 2011,
innovation is being driven by many reasons. Cloud sourcing 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.

Alex Blues, IT sourcing expert at PA Consulting Group
concludes: "One thing is certain, change is happening but the industry is now
mature enough to embrace that change. So by next year's NASSCOM we will
probably see more IT outsourcing providers adding real value to their clients
through meeting specific business needs; stronger niche players and further
changes to the role of the CIO."

Notes to the editor

About PA Consulting Group

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From initial idea generation and strategy development through to detailed
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