IT Services Captive centers should be an integral part of the CIOs’ strategy: Zinnov

~ IT Services Captive market in India is expected to be USD 3.4 Billion for 2010 ~~IT organizations are going through series of changes due to convergence of technological changes ~

Bangalore, February 16, 2011: Zinnov Management Consulting, a Leading Management Consulting firm, today released a first-of-its kind study on the IT captives, titled, “IT Services Captives Landscape in India - Way Forward.” The study targeted at the changing roles of CIOs in Indian MNC R&D centers in India, brings to light that IT organizations are going through a series of changes due to convergence of major technologies such as cloud computing, business intelligence, enterprise mobility and social media.

Setting stage; the study reads that the recent global downtime has resulted in some very key changes in the way business was being perceived until now. Getting closer to customers to realize their strategy is the most important priority for CEOs today. In also adds that CEOs have realized the impact of technology as one of the major external drivers to enhance business growth. And therefore, we see the role of CIOs evolving to support business decisions and market penetration. Most of the global enterprises have considered increased spend in IT which is in line with NASSCOM Estimates of IT services spend being USD 574 Billion in 2010.

The study highlighted that the current IT services captive landscape is indeed bright with mushrooming of many captives in the recent past. The IT Services Captive market in India is expected to be USD 3.4 Billion for 2010 growing at a CAGR of 21 percent from 2003.

Speaking about the report, Mr. Chandramouli C.S, Director-Globalization Advisory, Zinnov Management Consulting Pvt. Ltd said, “The IT Services Captives in India have evolved over the years and surely moved up the value chain. With the total revenue of USD 3.2 Billion coming from them; Testing Services, Application Development and Maintenance (ADM) are the prime focus areas for these centers”.

We have seen that these IT Services Captives are increasingly using their India delivery base to offer services beyond application development- such as testing, infrastructure management and consulting services. They indeed have helped CIOs’ keep up with both business & IT changes”, he added.

Additionally, the study brought to light that IT vendors in the recent past have failed to address the changing IT needs of organizations owing to a gamut of reasons:

• Most service providers have developed excellent expertise in ADM and Infrastructure Management, while their maturity levels in System Integration and IT consulting is low
• There is still lack of flexibility and agility amongst service providers
• IT vendors focus on maintaining margins either by increasing utilization or by hiring inexperienced low cost resources
• Attrition continues to be a key concern area for most of the vendors which has led to productivity issues.
• Management bandwidth including leadership skills at middle management levels have not kept pace with the customer expectations

The study very strongly said that the IT Services Captive landscape indeed looks bright with mushrooming of many captives in the recent past. Companies like Tesco, Barclays have moved up the value to deliver high value IT services. Going forward, the Indian IT landscape is going to witness a strong growth in IT Services Captives thus making it imperative for captives to adopt best practices and address challenges to deliver true value to the HQ organization.

About Zinnov Management Consulting Pvt. Ltd

Founded in 2002, Zinnov – meaning Zeal in Innovation – is a leading management consulting company providing services in the area of Offshore Advisory, Market Expansion and Human Capital Optimization to Fortune 1000 companies. Zinnov works collectively with clients to tackle prevailing organizational challenges by analyzing the changing dynamics, improving performance, and building institutional capability. The services delivered to its clients through advanced reasoning and analytical techniques, provides solutions that help in integrating organizational vision, business definition and processes.