'Indian IT firms missing out on opportunity in recession'

Indian information technology vendors may be missing an unfolding opportunity in the current American recession, Gartner India, the research firm, has warned.

With a clear focus on reducing costs, US firms are interested in offshoring, but Indian IT vendors don’t seem to have prepared their sales teams for this, it observes.

“Almost 30 per cent of the calls we have got from clients in the past three months are on decisions to try offshore servicing,” says Partha Iyengar, Gartner India’s vice-president and regional research director. “These clients are considering offshore for the first time. While many are saying that they want Indian firms to help them, their (the latter’s) sales teams are missing in action,” he told Business Standard.

The Indian vendors need to step up their sales and account management capability and strategy. “If a client goes to an MNC and talks about rate cuts, it is not easy. Their sales team immediately talks about a business strategy on the levers of getting cost down. That’s the evolution we need to see among Indian sales teams and their management,” says Iyengar.

He believes this lack of focus in sales teams is creating a vacuum in the market, which a lot of players from Europe and the US itself will eye. “A lot of firms that were late to the offshoring story are getting aggressive in getting the strategy in place, realising very well that the Indian players are missing. It’s a great competitive landscape for Indian firms,” Iyengar said.

He says while existing clients are looking at rate cuts, Gartner has been advising against it. “A rate cut of 10-12 per cent is just not possible. Besides, in the long run, it dents the relationship. We are telling our clients that rate cuts should be the last part of the conversation and they should focus on other levers to cut cost.”