OUTSOURCING in IT has been prevalent in the mature economies since 1990’s, primarily to bridge the skill and resource availability gaps. Turn of the century saw the advent of outsourcing in offshore model, where third world countries like India, Philippines, China, Taiwan, Malaysia and few others destinations started fulfilling the requirements of developed world, be it for software, applications, voice processing, data processing, manufacturing or logistics.

In early 2000’s with the increase in automation, there was a lot of innovation in the area of outsourcing. Resources and task fulfillment were no longer the prime drivers for outsourcing but business outcome and unlocking value became the mantra.

In India, the rapid growth in several sectors likes telecommunications, infrastructure, pharmaceuticals, hospitality, logistics, power and transport, required rapid IT automation with infusion of resources, processes and practices to sustain the scale and operations thereof.

Organisations at various stages of growth chose different models to suit their objective e.g. business transformation, scale with speed, operational excellence, unlocking value etc.

The point of inflexion for IT outsourcing in India came in early 2004, when a few path-breaking historical deals were done in the area of telecommunications and FMCG. One of these deals was a classic match of the vision of two big organisations; both were able to leverage each other’s strengths to have a win-win situation. ‘One relied on scale with speed, while the other's vision centered around a utility computing, leading to both companies reaping huge benefits: be it reaching the top market position or increasing shareholders value or gaining many other such deals. Needless to say, at the time of agreement both organisations took and shared a calculated but huge risk, but at the end there was a big success story to tell.

Many other outsourcing deals followed. However, the advantage and USP gained by the early movers was not realised to its full extent by the late adopters of this model. Some of the late entrants even faced quality issues due to stretched resources or limited bandwidth of particular skills, leading to delays in delivery and overall business dissatisfaction.

BY RAJEEV BATRA  CIO, Sistema Shyam Teleservices THE AUTHOR HAS over 15 years of experience in decision-making positions in the IT departments of telcos.