Communications and Technology Industry Research

Zinnov has released the results of a study conducted on offshoring of Infrastructure Management Services (IMS) to India. The study forecasts that offshoring of IMS to India will grow from $1.4 billion to $4.2 billion towards the end of 2010.

 

The hardware support services will account for the majority of these revenues. Zinnov is a management consulting company that provides its services in the area of Offshore Advisory, Market Expansion, and Human Capital Optimization to Fortune 1000 companies.

 

According to the report, the banking, financial and insurance segment (BFSI) in India will represent the largest market for IMS at 43 percent. The high tech/telecom, manufacturing and retail industries will be the next biggest consumers of offshored IMS services at about 12 percent each.

 

The report states that the trend of keeping the majority of IMS in-house or outsourced to "near-shore" locations (e.g. in North America changing. Infrastructure Management Services are ideal for offshoring given the relative disconnect between clients' core business offerings and these "back-end" services.) The cost savings (between 40 and 60 percent) and 24x7 operations are cited as the main growth drivers of the offshored IMS industry.

 

Another reason for the growth in IMS offshoring is due to the type of service level agreements (SLAs) that western multinationals are negotiating with their vendors. Clients are increasingly dealing in "managed services" agreements with vendors to mitigate the risks associated with offshoring. The managed services model includes language in the SLA that ties pay to performance. Call center services and back office processing have also benefited from this model of offshoring.

 

According to Vamsee Tirukkala, co-founder & managing principal of Zinnov, “The offshoring of IMS to India is clearly a huge growth area for both American and Indian vendors with the available talent in that country. And, as western companies continue to put an ever greater premium on holding down costs, we expect this growth to extend well into the next decade.”

 

Zinnov works in tandem with clients to tackle organizational challenges, improve performance and build institutional liability. The advisory services of Zinnov are categorized into planning, set up and capability management. These services help clients to reduce time, money and risks involved in planning and setting up global outsourcing initiatives.