Chennai: As the ongoing recession in many foreign countries causes a reduction in IT spends, facilitating a decline in the number of projects signed, Indian IT companies are now moving towards domestic market and calling back many of their successful professionals from on-site locations to India. They would focus on domestic software projects, reported The Economic Times.
Pari Natarajan, CEO, Zinnov, a management consulting firm said, "If Indian IT companies don’t look at the domestic market now, then the likes of IBM and Accenture will dominate. It is likely that they will lose key accounts to them. So, there is an increase in the quality of employees working on domestic projects."
"The strategy would work better for the top IT firms in India wanting to gain ground with their global peers like IBM and Accenture, who have been strengthening their India revenues over the years," said, Dipatarup Chakraborti, a principal research analyst, Gartner.
In a tough economic situation IT firms are asking employees to move towards destination where more opportunities are available. For instance, HCL Technologies has sent out an internal mail to employees last month which indicates a shift towards favorable locations. The mail spoke about moving employees across work locations within the current city and to any domain where there is opportunity.
"The situation is bad, because clients want lesser resources onsite, so the employees are being brought offshore to work on the same client or in domestic projects, which all Indian IT companies are trying to grow now," said an official from a top IT company, under anonymity.
The new strategy is also expected to improve the utilization rates in the companies. Currently, TCS has high utilization rate compared to other companies as TCS deploys additional resources in domestic projects.
Indian IT firms were not much bothered in making use of domestic market, but worsening crisis in major market overseas and promising nature of Indian market force them to focus on local projects. Nasscom estimates that domestic IT services market in India would be approximately $8 billion for the financial year 2008.
"The margins are better now because companies have a better idea about how to price their projects here. Also, they can use the processes and solution components that they used for their clients globally for the domestic clients," Natarajan , Zinnov, added.