Latest news with #CognizantTechnologySolutionsCorp.
Mint
4 days ago
- Business
- Mint
IT companies are hunting deals rather than waiting for clients to float tenders
The country's largest information technology (IT) services companies are actively hunting for deals rather than waiting for clients to float tenders, as uncertain macroeconomic conditions and a need to outperform competition are prompting IT outsourcers to become deal hunters. While IT service providers, including Cognizant Technology Solutions Corp. and Zensar Technologies Ltd, said they are bagging deals through such client mining efforts, peers Birlasoft Ltd and Firstsource Solutions Ltd are focusing on creating large deals. Also Read | Mary Meeker's AI report: Decoding what it signals for India's tech future 'See, there are two types of large deals. One, where things are coming as RFPs (request for proposals) in the market. And the second is where you have to create large deals. So the pipeline for where we are trying to proactively create large deals is very good. The pipeline for RFPs where anyway the probability of selling is very low, that is fairly muted, and that has been muted for us for quite some time," said Manish Tandon, chief executive of Zensar Technologies, during the company's post-earnings conference on 25 April. Zensar ended last fiscal with $624.5 million in revenue, up 5.4% on a yearly basis. IT outsourcers generally win large deals through RFPs, which include a client floating a tender for IT-related work. Multiple IT outsourcers bid for such contracts and pitch their offerings to the client. Ultimately, the tech services company bidding a low price and doing more for less is awarded the contract. Also Read | AI-first startups outpace SaaS firms in funding race However, such RFPs are rare in this macroeconomic situation, with governments imposing tariffs on imports. This is causing companies to pull back their tech expenditure, which is considered non-essential at times of such uncertainty. As a result, tech services companies are actively mining clients to bag deals. Finding deals Last week, Nasdaq-listed Cognizant announced that it bagged two deals through its mining efforts, fetching upwards of $500 million in revenue. Surya Gummadi, the company's Americas president, said in a fireside chat with Bank of America analyst Jason Kupferberg last week that both mega deals came after Cognizant passed on artificial intelligence (AI)-led productivity gains to clients, leading to additional investments in IT work. 'Both the mega deals that I spoke about, they were originated by us, they did not come from an RFP," said Gummadi, adding that 'the ideas originated from us." Cognizant ended last year with $19.74 billion in revenue, up 1.98% year-on-year. Also Read | Tech industry fights to save clean-energy tax credits While Cognizant and Zensar spoke about client mining paying dividends, two of its peers highlighted a shift in focus. 'We have identified an existing very senior leader to take the mantle of opening accounts, and we have identified about 19 or 20 accounts that we are going to go after, so that we can create pipeline and close them," said Angan Guha, chief executive officer (CEO) of Birlasoft, in a post-earnings call with analysts on 29 May. His views were echoed by a larger peer, which is the newest entrant to India's $1 billion IT club. 'We are engaged very deeply with all our existing customers. And at this stage, we are trying to see how we can help them and use the current environment actually to our advantage to provide them proposals which allow them to create operational efficiencies further in their business," said Ritesh Idnani, CEO of Firstsource Solutions, as part of his prepared remarks during the post-earnings analyst call on 28 April. Active search Notably, each of the companies ramping up new deal creation,except Cognizant, earns less than $1 billion in revenue annually. Firstsource Solutions and Birlasoft reported $944 million and $635 million in revenue for the year ended March 2025, respectively. At least one analyst attributed the drive to a lack of macroeconomic clarity. 'As it is, demand is slow, and outsourcing deals have slowed down because we are entering a weak economic situation. In such a scenario, IT outsourcers have to create their own demand rather than just for deals to come to them through RFPs," said Pramod Gubbi, founder of Marcellus Investment flip-flops and an uncertain demand environment have prompted large Fortune companies to stop awarding large IT deals. Gubbi added that smaller IT outsourcers first try to win small deals and get a foot in the door of large clients. Once they have a fair understanding of the client's IT systems and the extra IT work that they can do to modernize them, they mine those accounts for more IT work. A second analyst attributed the reason behind companies chasing large deals to eliminating competition. 'The moment a deal gets into the RFP stage, there will be price competition. If IT service providers have an existing relationship with the client, they will understand the problem and will try to proactively create a solution that can help them get ahead of their competition and eliminate chances of a price war," said Abhishek Kumar, research analyst at JM Financial. Kumar added that AI is an integral part of such conversations when it comes to creating large deals. Another analyst said this was an effort by IT outsourcers to increase their footprint in their accounts. "This is an aggressive move to encourage enterprise clients to consolidate more of their services with them, and benefit from economies at scale, take advantage of more automation and AI," said Phil Fersht, CEO of HFS Research. The bid to push clients for more business comes as Fortune companies are narrowing the number of IT outsourcers they work with.
Yahoo
07-02-2025
- Business
- Yahoo
IT and BPO Services Market in India to Grow by USD 214.8 Billion from 2025-2029, Boosted by Rising Cost Pressure, with AI Impact on Market Landscape
NEW YORK, Feb. 7, 2025 /PRNewswire/ -- Report with market evolution powered by AI - The IT and BPO services market in India size is estimated to grow by USD 214.8 billion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of 12.3% during the forecast period. Rising cost pressure to maintain in-house it systems is driving market growth, with a trend towards increased adoption of application outsourcing. However, lack of effective communication between client and vendor poses a challenge. Key market players include Accenture PLC, Automatic Data Processing Inc., Cognizant Technology Solutions Corp., ExlService Holdings Inc., Firstsource Solutions Ltd., Genpact Ltd., HCL Technologies Ltd., Hinduja Group Ltd., Infosys Ltd., International Business Machines Corp., Morae Corp., Serco Group Plc, Srisys Inc., StarTek Inc., Sutherland Services Inc., Tata Consultancy Services Ltd., Tech Mahindra Ltd., TTEC Holdings Inc., Wipro Ltd., and WNS Holdings Ltd.. AI-Powered Market Evolution Insights. Our comprehensive market report ready with the latest trends, growth opportunities, and strategic analysis- View Free Sample Report PDF Forecast period 2025-2029 Base Year 2024 Historic Data 2019 - 2022 Segment Covered End-user (Finance, Insurance, Telecom, Healthcare, and Others), Type (Export and Domestic), Product (IT services, BPM, and Software and research and development), and Geography (APAC) Region Covered India Key companies profiled Accenture PLC, Automatic Data Processing Inc., Cognizant Technology Solutions Corp., ExlService Holdings Inc., Firstsource Solutions Ltd., Genpact Ltd., HCL Technologies Ltd., Hinduja Group Ltd., Infosys Ltd., International Business Machines Corp., Morae Global Corp., Serco Group Plc, Srisys Inc., StarTek Inc., Sutherland Global Services Inc., Tata Consultancy Services Ltd., Tech Mahindra Ltd., TTEC Holdings Inc., Wipro Ltd., and WNS Holdings Ltd. Key Market Trends Fueling Growth Companies are turning to IT and Business Process Outsourcing (BPO) service providers in India for application development services to stay competitive in the market. The complex and costly nature of application development makes it beneficial for organizations to outsource this function. IT and BPO service providers offer modular architectures and compatibility with advanced IT infrastructure like the cloud. They also develop intelligent applications capable of handling multiple features and large data volumes. Effective application portfolio management is a priority for service providers to add value. DevOps and Agile methodologies are increasingly used for software development, enabling automation and improved business processes. Leading vendors like Accenture Plc and International Business Machines Corp. Offer application outsourcing services, contributing to the market's growth. The IT and BPO services market in India continues to grow, with trends including data processing, forms processing, and running support. Businesses require troubleshooting and problem resolution for their computer software, hardware, peripherals, and up-selling, promoting, and cross-selling opportunities. Insurance processing and claims are key sectors, with policy maintenance and management also in demand. Data entry, conversion, and financial services such as accounts receivables, financial statements, and bank reconciliations are common requirements. Form processing services, including online forms, payroll processing, medical billing, and contact centers, are also popular. Artificial intelligence and niche BPO services are emerging trends, driven by skilled labor, incentives, tax breaks, and macroeconomic factors. B2G, B2B, and B2C enterprises are significant clients, with technology spending and consulting services also contributing. IT associations play a crucial role in shaping the industry's growth, which is expected to contribute significantly to India's GDP. Insights on how AI is driving innovation, efficiency, and market growth- Request Sample! Market Challenges • Clear and effective communication is essential for the successful implementation of IT and BPO services in India. Vendors must maintain open lines of communication with clients to deliver services on time. Technical communication in outsourcing contracts is necessary to minimize risks and build trust. Misunderstandings can arise due to language and cultural differences, leading to potential system failures. Effective communication is crucial in various IT service delivery processes, including application development, testing, and system integration. Ineffective communication between clients and vendors can negatively impact the growth of the IT and BPO services market in India. • The Indian IT and BPO services market is experiencing significant growth, driven by increasing technology spending from B2B, B2G, and B2C enterprises. However, challenges persist. Niche BPO services face stiff competition due to the availability of skilled labor and incentives like tax breaks. Macroeconomic factors, such as GDP growth and Internet penetration, provide a favorable environment. However, the use of Artificial Intelligence (AI) technologies and automation in ITES requires internal resources and core competency development. Pestle analysis reveals challenges like BPO attrition, wage structures, and data security. Surveys conducted by IT associations indicate the need for process automation, intelligent workflows, and cloud technology adoption. BPO services include horizontal services like payroll and accounting, and vertical-specific services like telemarketing, social media marketing, and customer service. Government initiatives, such as cloud technology and process automation, are essential for businesses to remain competitive. CRM and ERP systems, personalized services, and data security are key areas of focus for businesses. The Internet of Things and automated workflows are emerging trends. Business scheduling and automated workflows are critical for efficient operations. In conclusion, the Indian IT and BPO services market presents opportunities and challenges. Businesses must focus on developing AI technologies, addressing attrition, and adopting cloud and automation to remain competitive. Consulting services and outsourcing services can help businesses navigate these challenges. Insights into how AI is reshaping industries and driving growth- Download a Sample Report Segment Overview This it and bpo services market in India report extensively covers market segmentation by End-user Type Product Geography 1.1 Finance- The finance sector, including banking and financial institutions, was a significant contributor to the IT and BPO services market in India in 2023. The increasing number of banking and finance institutions has led to a growing demand for customer retention solutions, driving the adoption of IT services for IT infrastructure management and BPO services for customer support and sales. Global banking and finance institutions rely on India for their IT and BPO services, fueling market growth. However, regulatory challenges, such as stringent licensing requirements for new banks, may hinder the growth potential of the banking sector in the IT and BPO services market during the forecast period. Despite these challenges, the finance segment is expected to experience moderate growth due to the continued demand for IT and BPO services to streamline operations and enhance customer experience. Download complimentary Sample Report to gain insights into AI's impact on market dynamics, emerging trends, and future opportunities- including forecast (2025-2029) and historic data (2019 - 2022) Research Analysis The IT and BPO services market in India has been witnessing significant growth due to various factors. The country's large pool of skilled labor, incentives in the form of tax breaks and subsidies, and macroeconomic factors such as favorable business environment and stable political conditions have made India an attractive destination for businesses seeking BPO services. B2G, B2B, and B2C enterprises across the globe are increasingly outsourcing their non-core functions to India to reduce costs and focus on their core competencies. The ITES industry in India offers a wide range of services, including horizontal services like data processing, forms processing, and running support, as well as vertical-specific services tailored to industries such as healthcare, finance, and retail. The adoption of artificial intelligence (AI) technologies in BPO services is a game-changer, enabling automation of repetitive tasks and improving efficiency. Technology spending on AI and other advanced technologies is expected to increase in the coming years. However, internal resources and core competency in AI technologies are essential for successful implementation. Pestle analysis reveals that the BPO services market in India faces challenges such as increasing competition, changing regulatory environment, and customer expectations for higher quality and faster turnaround times. Payroll, accounting, telemarketing, IT hardware, software, and peripherals are some of the common services offered by BPO providers in India. Up-selling and cross-selling are also essential strategies for BPO companies to grow their revenue streams. Market Research Overview The IT and BPO services market in India continues to grow, driven by various macroeconomic factors such as a large pool of skilled labor, incentives in the form of tax breaks and subsidies, and increasing technology spending by B2G, B2B, and B2C enterprises. The market encompasses a wide range of services including niche BPO services, horizontal services like payroll and accounting, and vertical-specific services such as insurance processing and claims handling. Artificial intelligence (AI) technologies are increasingly being adopted in the industry, leading to process automation, intelligent workflows, and personalized services. Cloud technology and business scheduling are also becoming essential components of the ITES industry. Surveys conducted by IT associations reveal that wage structures, data security, and attrition remain key challenges for the industry. However, the adoption of automation, CRM, ERP systems, and automated workflows is helping to address these issues. The Indian IT and BPO services market is expected to grow further, fueled by the increasing number of Internet users and improved telecommunication and internet penetration. The market is also witnessing an upswing in the adoption of IoT, data processing, forms processing, and running support services. Consulting services and outsourcing services are also gaining popularity, with up-selling, promoting, and cross-selling becoming key strategies for growth. The industry is expected to continue its growth trajectory, driven by the need for cost-effective solutions and the availability of a large pool of skilled labor. Pestle analysis reveals that the industry is facing challenges from regulatory changes, increasing competition, and changing customer preferences. However, the industry's core competency in providing cost-effective services and its ability to adapt to changing technologies make it a resilient and dynamic market. Table of Contents: 1 Executive Summary2 Market Landscape3 Market Sizing4 Historic Market Size5 Five Forces Analysis6 Market Segmentation End-user Type Product Geography 7 Customer Landscape8 Geographic Landscape9 Drivers, Challenges, and Trends10 Company Landscape11 Company Analysis12 Appendix About Technavio Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions. With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios. Contacts Technavio ResearchJesse MaidaMedia & Marketing ExecutiveUS: +1 844 364 1100UK: +44 203 893 3200Email: media@ View original content to download multimedia: SOURCE Technavio Sign in to access your portfolio
