India’s outsourcing firms are getting nervous. They
may still be leading A. T. Kearney’s global list of
top players, but changes are afoot. One big sign:
pharmaceutical giant AstraZeneca’s announcement
last year it would cut its annual IT spend by half.
Outsourcing organizations are trying to adapt to a
changing landscape by creating their own software
solutions—rather than competing for programming and other IT service contracts through cheap
labor costs alone.
The number of global
IT business process outsourcing deals shrank
in each of the last three
years, from 1,473 in 2013
to 891 in 2015, according to KPMG. A few tech
trends are converging to
reduce the profitability
of outsourcing firms:
cloud computing solutions, sophisticated new
automatic coding programs and declining IT budgets at many global
companies. In an interview with The Wall Street
New Value Proposition
To chart a healthier future, Infinite Computer
Solutions sponsored a US$20 million project
last year to develop proprietary messaging software that it hopes to market to U.S. telephone
companies, The Wall Street Journal reported. Of
course, some major companies may decide to
bring software development projects in-house
Only the
Agile Survive
Robotic Hospitality
The Henn-na Hotel in Nagasaki, Japan claims to be the
pinnacle in efficient lodging. Almost everything, from
check-in to baggage transport, is done without the help
of humans. Staff at the hotel—which translates literally to “Strange Hotel”—are robots.
A Japanese-speaking humanoid and English-speaking
dinosaur robot staff the reception desk at the hotel.
Other high-tech features include facial-recognition
technology instead of
room keys and radiation
panels that use body
heat to adjust room temperature. (Human staff
members are available to
assist in emergencies.)
The project’s benefits
go beyond novelty value.
Huis Ten Bosch Co., the
company behind the
hotel and nearby theme
park, said a robotic staff
will reduce labor costs
by about 70 percent.
Rooms start at about US$200 a night. A second stage
of the project, slated for completion this year, will
double the number of rooms. —Kelsey O’Connor
Robots handle
luggage storage
and staff the
front desk,
below.
“I can’t be a
plain vanilla
service
provider
based on
cheap labor
anymore.”
—Upinder Zutshi, Infinite
Computer Solutions Ltd.,
Bengaluru, India, to The
Wall Street Journal
theEdge
