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IT firms move closer to clients

Indian IT companies are increasing their manpower count closer to client locations in order to grab projects that offer higher margins, reports Venkatesh Ganesh.
Hindustan Times | By Venkatesh Ganesh, Mumbai
UPDATED ON JUL 23, 2007 05:25 AM IST

With the strong rupee eating away profits, Indian IT companies are increasing their manpower count closer to client locations in order to grab projects that offer higher margins.

Recently, Infosys co-chairman Nandan Nilekani, after stepping down as CEO, said he would now be based in the USA and spend more time working out new business models, negotiating for projects with higher rates and more high-margin deals around Infosys Consulting. TCS, Wipro and Satyam Computer Services are all increasing their on-site efforts through deployment of additional manpower.

In the recently announced results, TCS global head of human resources S. Padmanabhan said the company added about 1,000 employees across all its global subsidiaries, which number about 150, and a majority of them would be groomed to be the “face of the company”.

Infosys, through its global internship programme, has trained a couple of batches of 200 workers from different countries who will be groomed to undertake different roles in their respective locales.

"Deploying manpower on on-site locations is not something new, but projects with good margins are increasingly a mix of onsite and offshore," says Ram Mynampati, board member and president, commercial and healthcare business of Satyam.

Industry experts believe that as Indian IT majors have aspirations to be global consulting companies, then it is crucial to have a diversified workforce and a lot of times with nationals who are familiar with market conditions. "Earlier, if a company outsourced work to Indian companies, it was not basic run-of-the-mill stuff. Now, as Indian companies are looking to move up the value chain, with higher billing, companies want to have a touch-point in their respective locations," says William McArter, president of Mastek's US operations.

Recently, all IT majors have offered wage hikes for employees who are deployed on-site and are asking them to service more than a single client. "Earlier, if an employee was servicing a single client, now two employees are being asked to service three clients," says Pradeep Mukerjee of Tholons, an offshore advisory firm. Analysts also see this increase in employee productivity as a move to counter international software companies such as IBM, EDS and Accenture who score higher on this front.

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