GARTNER: Gartner Says Indian CIOs Must Consider Offshore Outsourcing
Gartner Says Indian CIOs Must Consider Offshore Outsourcing
Indian organizations feeling pressure of IT skills shortage and inadequate services standards from local service providers
Mumbai, India, June 11, 2007 - Indian organisations facing the daunting challenge of an IT skills shortage and "second-class" treatment from local service providers must consider offshore outsourcing to obtain high-end IT services, said Gartner Inc.
"India is witnessing a severe shortage of skilled IT resources at all levels of the IT personnel chain," said Linda Cohen, vice president and distinguished analyst for Gartner's IT sourcing group. Demand for skilled IT personnel by initiatives like the Indian government's recent national e-governance program (NEGP) and resource hungry Indian offshore service providers are outstripping local supply. Rapid economic growth in India is exacerbating the problem. Local chief information officers (CIOs) are finding it difficult to manage the shortage of skilled local IT resources as internal business units become even more demanding in the area of IT requirements and schedules.
"Local service providers lack adequate focus on the Indian domestic market, widening the demand-supply gap by not allocating enough quality resources for Indian customers," added Ms. Cohen. "Service providers typically allocate the best resources to their global flagship customers that pay in dollars and yield better margins. This is particularly true with Indian service providers".
India is undergoing massive economic growth. Gross domestic product (GDP) grew 9.2 percent in fiscal year 2006 (April 2006 through March 2007), which was second only to China among the major economies of the world. A recent Gartner survey conducted among more than 1,400 CIOs worldwide showed that IT budgets in India had the highest growth of 16.19 percent, compared with an average of 3.16 percent in the rest of the world.
These challenges and market conditions require Indian CIOs to look beyond the limits of their own geographical boundaries, much like their Western counterparts. Gartner predicts Indian companies will increasing go offshore in their sourcing strategies, which will result in outsourcing deals offered by some Indian companies that include higher end parts of service (for example, design and architecture, and business consulting) delivered from other parts of the world.
"This global sourcing model will become business-as-usual for Indian organizations," said Arup Roy, senior research analyst for Gartner's IT services market group. "Indian companies will increasingly source IT skills from nearby Singapore and Hong Kong. The market has already seen the first signs of this trend. For example, the Indian embassy outsourced its visa collection and delivery services to a U.S. company. Many Indian IT firms with operations spread across the U.S. and Europe are now outsourcing a part of their administrative work locally".
Gartner recommends Indian CIOs to:
* Develop innovative programs for retaining the talent they already have. Alternative sources of talent, such as recruiting from small and mid-tier cities, should be considered. Companies must invest heavily in training, even while knowing they will lose some of their training investment to competitors.
* Evaluate offshore outsourcing or staff augmentation from other parts of the world in their sourcing strategy. This will create a sense of competition among the local vendors, potentially increasing their focus on local opportunities.
* Consider Tier 2 and Tier 3-level Indian service providers for their key capabilities in various aspects of IT delivery. The right provider can provide domestic resources and perhaps a higher level of attention to issues and demands
Press contact:
If you would like to speak to a Gartner spokesperson or to receive further information, please contact Laurence Goasduff at Gartner Public Relations, on +44 1784 267 195 or email her at laurence.goasduff@gartner.com.
About Gartner
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the indispensable partner to 60,000 clients in 10,000 distinct organisations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, we work with every client to research, analyse and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,800 associates, including 1,200 research analysts and consultants in 75 countries. For more information, visit www.gartner.com.
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NewMarket China, Inc. Announces Digital Multimedia Outsourcing Contract With RNM Design of California
Company to Provide Digital Architectural-Rendering Visualization Services
DALLAS, TX--(Marketwire - June 11, 2007) - NewMarket China, Inc. (OTCBB: NMCH), the China regional subsidiary of NewMarket Technology, Inc. (OTCBB: NMKT), announced today a contract with RNM Design of Newport Beach, California. NewMarket China is a growing technology company focused on the rapidly growing Chinese domestic market and is a provider of offshore software development and maintenance services to global customers. NewMarket China was independently publicly listed by its parent company, NewMarket Technology, in October of 2006. NewMarket China went on to close 2006 with over $29 million in revenue, and has forecasted $40 million in revenue for 2007.
RNM Design (www.rnmdesign.com) has engaged NewMarket China to provide offshore outsourcing services to develop a digital multimedia architectural rendering visualization video-based on RNM Design's architectural plans for a new large mixed-use commercial and residential development in Almaty, Kazakhstan. RNM Design has provided Architectural Design, Regional, Urban and Community Planning services for nearly 50 years and is currently involved in numerous international projects in Kazakhstan, Pakistan and Istanbul, Turkey.
NewMarket China is providing the service with the company's recently announced partner Crystal Information Technology Co., Ltd. (www.crystalcg.com) of Shanghai. The companies have entered into a contract to cooperatively provide Multimedia Outsourcing Services to customers in North America, Latin America and beyond. Crystal is a high-tech multimedia company with an impressive portfolio that includes architectural renderings, fully animated construction demonstrations, and urban planning videos. Crystal's more notable projects include full motion architectural renderings for all of the 2008 Beijing Olympic venues as well as the 2010 World Expo venues in Shanghai.
Crystal recently participated in the May 2007 U.S. Multimedia Road Show hosted by NewMarket China and the Shanghai Multimedia Industry Association (SMIA). NewMarket China is working with the Shanghai Multimedia Industry Association to help member companies expand into U.S. markets. The SMIA works to standardize its industry in an effort to build a better business environment for multimedia services in Shanghai. The SMIA is a member of the International Federation of Multimedia Associations (FIAM) and is the authority on the multimedia industry in Shanghai, with more than 148 member companies. The SMIA has extended its influence beyond Shanghai by networking with many other government organizations, media outlets and corporations throughout China. Beyond China, the SMIA has membership in associations and organizations in more than ten countries.
To be added to NewMarket China's corporate e-mail list for shareholders and interested investors, please send an e-mail to ir@newmarketchina.com.
About NewMarket Technology Inc. (www.newmarkettechnology.com)
NewMarket assists clients maintain the delicate balance between maintaining legacy systems and gaining a competitive edge from the latest technology innovations. NewMarket provides certified integration and maintenance services to support the prevailing industry standard solutions to include Microsoft, Cisco Systems, SAP, Siebel, Oracle and Sun Microsystems. Concurrently, NewMarket continuously seeks to acquire undiscovered emerging technology assets to incorporate into an overall product portfolio carefully packaged to complement the prevailing industry standard solutions. NewMarket delivers its portfolio of products and services through its global network of Solution Integration subsidiaries in North America, Latin America, China and Singapore. NewMarket maximizes shareholder return on investment by independent listing of consolidated regional and emerging technology subsidiaries in order to issue subsidiary stock in shareholder dividends. NewMarket ranked Number Five on Deloitte's 2006 Technology Fast 500, a ranking of the 500 fastest growing technology, media, telecommunications and life sciences companies in North America. Rankings are based on percentage revenue growth over five years, from 2001-2005. The Company grew from less than $1 million in revenue in 2001 to over $50 million in profitable revenue in 2005.
About NewMarket China, Inc. (www.newmarketchina.com)
NewMarket China, Inc. is a leader in the rapidly developing Chinese software engineering market providing high quality outsourcing services to global customers. In addition, the firm is a systems integrator and value added reseller of major global hardware brands in the Chinese domestic market. NewMarket China has established and continues to grow a highly capable network of Chinese IT Service partners providing domain expertise in telecommunications, multimedia, ERP and finance. Headquartered in Shanghai, NewMarket China bridges the gap between Western and Eastern business cultures to realize the advantages of the high quality, low cost technology products and services available in China. In doing so, the firm assists its clients in overcoming the challenge of taking a business global. NewMarket China comprehends the differences in business processes, communications and cultures between the United States and China, and provides its clients with an established partner who provides a winning environment for global relationships and transactions. While most firms see China as merely a cost saving alternative, NewMarket China recognizes that China represents a huge growth opportunity for its customers and supports them in localizing their products and services, and in identifying complementary revenue streams within the Chinese Market.
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Biomed Outsourcing Report: Competitive Outsourcing Opportunities - China vs. India
June 11, 2007 - DUBLIN, Ireland--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/reports/c59299) has announced the addition of Biomed Outsourcing Report: Competitive Outsourcing Opportunities-China vs. India to their offering.
This issue comparative analyzes the life sciences industry and outsourcing opportunities in China and India.
The Life Sciences Industry in China article discusses specific developments in China from changes in the R&D paradigm in China to changes in the healthcare system enabling the development of the biopharmaceutical industry. Specific sectors discussed include: biologics, pharmaceuticals, bioservices, and chemicals.
The Outlook on India article discusses the market size, growth anticipated, therapeutic area targets, the top ten companies in India, and the current outlook in India.
A Supportive Environment for Outsourcing to China provides an overview of the impact of strong government support, an emerging middle class, low R&D costs, the availability of talented, low-cost human capital and other special resources on the biotechnology, pharmaceutical and outsourcing sectors.
Outsourcing to India analyzes the impact of India's cost advantage, research infrastructure, the clinical market and growth on outsourcing opportunities for both.
Western companies and Indian service providers.
Challenges to Overcome extends the discussion to intellectual property protection, the need for a strong capital market, better regulatory compliance, and the management of language barriers in China.
Policy Changes Required to Enable Outsourcing in India discusses how rigid administrative price controls, higher import tariffs and tax, and India's patent law are considered to be the main barriers for the Indian pharmaceutical industry.
Business Models Operating in China and India compares various business models including partnerships, mergers and acquisitions, joint ventures, and relocation with outsourcing relationships.
Various company case studies have also been chosen to demonstrate the opportunities available in China and India and how multinational companies, emerging companies, and contract research organizations are taking advantage of these opportunities.
Cases include:
MNCs: AstraZeneca China and India, Eli Lilly China and India, Pfizer China and India, Quintiles Asia, Quintiles India.
CROs: Bridge Pharmaceuticals Inc., Shanghai Genomics Inc., Starvax Inc., Wuxi Pharma Tech Co. Ltd., Biocon India Group, Syngene, Clinigene, Matrix Laboratories, Siro Clinphama.
Companies Mentioned:
- AstraZeneca China and India
- Biocon India Group
- Bridge Pharmaceuticals Inc
- Clinigene
- Eli Lilly China and India
- Matrix Laboratories
- Pfizer China and India
- Quintiles Asia
- Quintiles India
- Shanghai Genomics Inc.
- Siro Clinphama
- Starvax Inc.
- Syngene
- Wuxi Pharma Tech Co. Ltd.
