Information technology service vendors must adopt distributed and low-cost global delivery models to stay ahead of the pack in outsourcing, a study has said.
According to Forrester Research analysts, an IT research firm, none of the services vendors is leading in low cost global delivery models and its adoption will take three to five years.
Although three major American onshore suppliers -- Accenture, EDS, and IBM -- and three Indian offshore suppliers -- Infosys, TCS, and Wipro -- are making a broad range of GDM investments, but no one is a clear leader yet.
As a result, suppliers are shifting their focus from
serving the needs of local clients, or supporting remote operations of multinational firms, to expanding their talent pools in developing areas like China and Southeast Asia.
"The grouped ranking of the vendors is an indication that the move to a low-cost GDM is at the beginning of an evolution which will take place over the next three to five years," said John C McCarthy, vice president, at Forrester Research, Inc.
"As providers expand into new locations, develop new capabilities and increase GDM services, they will face unique challenges."
Forrester sees the adoption of this distributed approach as a complex evolution with specific hurdles around account management, process, skill sets and culture.
Challenges for Indian suppliers (Infosys, TCS, and Wipro) include improving account management, moving away from technology-centric messages that often alienate business buyers, investing in vertical-specific skills, building out their middle management and becoming more multicultural organisations.
Hurdles for onshore suppliers (Accenture, EDS, and IBM) are motivating local sales people to sell their GDM capabilities, further investing in consistent global processes, expanding their offshore technical and quality skill sets.
The research, 'Low-Cost Global Delivery Model Showdown,' also presents a more in-depth look at the unique strengths of each supplier, including a second weighting toward a simple, basic delivery model.
