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IT Consulting: The unpenetrated market - Views on News from Equitymaster
 
 
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  • Mar 19, 2007

    IT Consulting: The unpenetrated market

    Many of the top Indian IT firms are focusing on IT consulting services during the last few years. With a market size of around US$ 50 bn, it is still one of the most unpenetrated segment in the Indian IT market. Through this article, we try to look into the IT consulting market and what opportunities it offers to the Indian IT majors.

    What is IT Consulting?

    IT consulting is a service that focuses on advising companies on how to use information technology in the best possible way to meet the business objectives. IT consulting, in addition to advising, also includes implementation, deployment and administering the IT systems on behalf of the company.

    Major players in India and across the globe

    In India the companies, which are offering services in IT consulting includes iGate, Infosys, Satyam, TCS and Wipro. Global majors include IBM, Accenture, Affiliated Computer Services, Unisys, Cognizant and Hewlett Packard.

    Indian IT companies in consulting

    IT consulting is a specialised job and requires skilled manpower/consultants. Gone are those days when the Indian IT companies can boast of plentiful and cheap manpower. Indian IT industry is facing a severe crunch of talented and skilled professional required for these types of jobs. For the IT companies to move up the value chain, they have to focus on high-end value creating services rather than sticking to the low-end tasks of application development and maintenance.

    Consulting revenue as a % of total revenue
    Name of the company % of revenue How the service is rendered
    Satyam Computer Services Limited 5%

    Satyam renders its IT consulting through the UK based Citisoft Plc., which it acquired during FY06. Citisoft specialises in business and system consulting and has offices in London and Boston and a wholly owned subsidiary Citisoft Inc. in the US.

    Infosys Technologies Limited 4%

    Infosys has its separate wholly owned subsidiary named Infosys Consulting Inc., which the company established in April 2004 and services around 55 clients in the US. Investment as on 31st March 2006 in Infosys Consulting Inc was US$ 17 m.

    Tata Consultancy Services 3%

    To expand into the consulting domain, TCS acquired FNS, a banking product company in Australia.

    Wipro Limited 1%

    Wipro, as of now, does not have a separate entity for its consulting business. However, in May 2006, it acquired a Europe based retail solution provider (Enabler) that specialises in consulting and implementation of integrated solutions and effective support of retail system.

    Challenges from global players
    Indian IT bellwethers are relatively new in the business of IT consulting whereas their global counterparts like IBM, HP, Unisys and Accenture derive a greater chunk of their revenues from the consulting business. They have been around in this business for a very long time and possess the required expertise in this field, which is the key to success in this business. While this in itself poses a serious challenge to Indian IT companies that are trying to penetrate deeper into the consulting domain, non-availability of skilled consultants in future might also hurt prospects.

     

     

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    S&P BSE IT


    Aug 17, 2017 03:37 PM

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