Monday, December 18, 2006

Indian firms: moving into high-value strategic advice

Forbes has an interesting article titled the consultants from chennai (through Sadagopan's Weblog).
The article starts by pointing out that Indian firms are moving into high-value strategic advice faster than anyone had expected. From being purely providers of cheap call-center services and payroll processing, they are moving up the value ladder. They offer product design, software design, chip engineering and the kind of corporate asset-deploying advice once the sole domain of Western firms like McKinsey & Co. and Booz Allen Hamilton. Forrester's Stephanie Moore thinks that a lot of consulting deals won by the Indians in the last few years have really shocked the industry – IBM, EDS & Accenture’s have not come to terms with this.

Look at a few cases that demonstrate this : Northeast Utilities in Hartford, Connecticut consolidated three customer information systems into one, and six call centers into two. Global firms and Indian headquartered firms competed for this opportunity. The usual providers of this kind of advice are firms such as IBM, Capgemini and Accenture , the well-known shops that sponsor golf tournaments and run ads during the Super Bowl. These firms bid on the aforementioned projects, but they lost. The winners came from Bangalore and Chennai, firms such as I-flex Solutions, Mphasis BFL Group, Infosys Technologies and SlashSupport. In the case of Northeast Utilities, Infosys got the strategic advice business while IBM got left with the scut work of moving the company's 2 million customer records from the old system to the new. Seven years ago GE Appliances entrusted Satyam to prepare only engineering drawings and blueprints for its home business. Four years later Satyam was doing tear-down analysis of all its products and its competitors' products. Now it's the only point of contact for GE Appliances' vendors and components suppliers, and it has also taken over the design of nearly all new product features. Multinationals are relying on Indian firms for fundamental missions.

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