Next big outsourcing is in Europe, UK

The next big opportunity for outsourcing lies in Europe and the UK, and Indian companies should tap these to expand their horizon.

This would also help the country post a 40 per cent growth in the outsourcing segment, according to N Chandrasekharan, executive vice-president and head global operations, Tata Consultancy Services (TCS).

"The European market is the biggest opportunity for Indian companies, next only to the US. The country can post a 40 per cent growth, by taking a 'go-direct-to-market' approach and a combination of India and other nearshore-based delivery operations," Chandrasekharan said, at the India Leadership Forum-Nasscom 2006.

The right strategy and approach, may be acquisitions, were the right way to gain an entry into the European markets, he added.

Business Standard Editor (New Media) Govindraj Ethiraj was the moderator. He opened the session by stating that Indian companies had to tap the emerging opportunities in global outsourcing.

Nasscom President Kiran Karnik said, "UK is one of the major destinations, not only as a potential market but as a development centre. The industry trend in the recent years is expansion of the Indian IT industry's presence from beyond traditional destinations to newer geographies."

According to NIIT CEO Arvind Thakur, Indian IT majors have to harness local talent to tap domestic markets and de-risk the revenue model by reducing their dependence on one geographical region. This is doubly important as the industry's focus is no longer on the English-speaking countries.

Indian companies have begun to focus on the UK and European markets as a major portion of their revenue comes from these geographical locations.

Ovum Senior Analyst Dominique Raviart said Indian companies have the necessary bandwidth and ability to rake in the potential of the European countries and how to do this rightly is the moot question.

"We should have a sustainable business model, which should be different from that of others. By now Indian companies have the size and scale. It is only a question of putting in the resources," he added.