High attrition rates cost dear to clients

"High attrition rates result in higher costs for the outsourcing customer. Smaller IT services industries in Latin America, Eastern Europe and Russia have more stable IT workforces", a report has said.

The report said that though Indian service providers offer strong English skills, they have limited non-English capabilities.

It noted that the language issue works both ways and Russian, Chinese and Latin American service providers have weaker English skills than their Indian competitors.

Although India is a stable democracy, many companies are concerned that its "relationship with Pakistan and China, natural disasters, and cultural and religious diversity may destabilise the country and are looking to non-India locations in order to minimise the risk of geo-political destabilisation", the report said.

It also noted that major Indian service providers were not resting on their low-cost, high-quality laurels and ignoring foreign competition.

They were expanding globally and in their non-English capabilities. TCS has opened Spanish and Portuguese-centric development centres in Brazil and Uruguay and is investing in innovative service delivery models.

Wipro is working with a large automotive manufacturing company and creating a factory model for delivering application integration.

Companies are also investing in expanding their consulting capabilities to provide higher value transformation services, the report said