A generation ago, large technology consulting and system integration (SI) firms based largely out of India disrupted the SI industry with their low cost, offshore model for both technology development as well as business process outsourcing. Over the intervening time, economic forces have moved to counteract their advantage, as SIs from other countries with low-cost skilled labor entered the fray, combined with the entry of large North American and European players, who rapidly ramped up their technology teams in India and elsewhere to compete head-to-head with the Indian providers.
In response, the Indian SIs have been “moving up the food chain,” offering higher margin and value-added services like architecture and strategic management consulting. Today, however, a new disruptive force has once again targeted this dynamic market: digital transformation.
Once again, the Indian SIs are faced with a fundamental change to their business model, as they struggle to piece together the strategic business aspects of digital transformation with the necessary technology elements in order to maintain and grow their customer base around the world. For such firms, this transformation is a double-edged sword: they must support their client’s transformation initiatives while they simultaneously weather their own complex internal business transformations.
The Current State of the Indian SI Market
For this article I interviewed senior executives at two of the five largest Indian SIs: Cognizant Technology Solutions and Wipro. Cognizant reported annual revenues of $8.84 billion with its Q4 2013 results in February of this year. Teaneck, New Jersey-based Cognizant has a large presence in India, but does not see itself as an Indian SI as it began in the US as a division of Dun & Bradstreet and positions itself as a global company. Bengaluru-based Wipro has annual IT services revenues of $4.7 billion. Also on the list: Tata Consultancy Services (TCS) at $13.4 billion total revenues (self-reported), as well as Infosys at $6 billion and HCL at $3.9 billion (2013 IT services numbers as per an HfS Research report).
Read the rest of the article at http://www.forbes.com/sites/jasonbloomberg/2014/09/04/digital-transformation-drives-disruption-for-indian-system-integrators/.
Image Credit: Ryan Ready
