Most clients looking at increasing IT spending in 2013, says survey

The information technology (IT) outsourcing industry, hit by a slowdown in major markets such as the US and Europe, now has reason to cheer.

According to a report by advisory and research firm Offshore Insights, now, global clients seem to be more positive than in the last two years, and this may result in a rise in IT spending next year.

The report said India would see its IT offshoring market grow 15-18 per cent in 2013, primarily driven by North America, as Europe would continue to lag for another year. “The mood of global clients is positive and spending is likely to increase in the coming year. Though the growth is not in the same proportion as what the industry saw two years ago, many clients intend to spend more in the coming year,” said Sudin Apte, chief executive and research director, Offshore Insights. The survey, conducted between mid-September and mid-November and covering 270 decisions makers in IT companies across North America and Europe, said about half the respondents expected their IT spending to rise up to 10 per cent in 2013.

BOOM TIME PREDICTED

• According to a report published by advisory and research firm Offshore Insights, the mood of global clients looks positive compared to the last two years, which may result in an increase in IT spending in 2013
• The study also said that India would see the IT offshoring market growing by 15-18% in 2013, driven mainly by North America, as Europe continues to lag for another year
• The survey was conducted between September and November among 270 IT decision-makers of corporates located across North America and Europe

In terms of business outlook for 2013, about 36 per cent of the respondents said next year might be somewhat challenging, while 32 per cent said it would be a good year. The report said decision makers in North America were more positive than those in Europe. For India’s $70-billion IT services industry, North America is the largest market, accounting for about 60 per cent of the total exports.

The report said enterprise applications, apps integration and modernisation would emerge as high-growth areas, those in which clients were ready to spend.

However, dissatisfaction among clients was also rising, with most saying IT outsourcing vendors weren’t investing enough time and people in furthering ties, the report said. The clients also said vendors weren’t showing flexibility towards the price model. Global IT outsourcing firms were fast catching up with Indians companies, in terms of cost saving, quality, and software processes, the report said.

Among their priorities for 2013, global clients are looking at consolidating their vendor base and renegotiating rates. They were also looking at moving from a time-and-material model to a fixed-price model, the report said.