US$104 billion IT consulting industry to witness increased offshoring - Everest/Bernstein joint research

Demand drivers have changed, enabling growth to buck economic trends, says report

Delhi NCR/Gurgaon, November 3, 2008 ─ Fundamental changes in the drivers of the IT consulting market have ushered in a new market paradigm – manifested by healthy demand, lessened economic sensitivity, and central roles for globalization and offshoring. The shortage of IT talent in developed countries and the growing sophistication of offshore IT labor markets are supporting healthy growth in the IT consulting market, according to a market analysis and survey of 15 IT consulting companies by the Everest Research Institute and Bernstein Research.

The IT consulting market, estimated at US$104 billion, has shifted its value proposition to meet growing needs of vertical industry buyers seeking solutions for business changes, regulatory issues, access to new technologies, and heightened needs for specialized talent, according to the study, Reading the Alphabet Soup: SI, PI, ERP, etc. – The Changing Drivers of IT Consulting.

Says Gaurav Gupta, Country Head & Principal, Everest Group, "As a result of globalization, the industry is now looking at more and more specific IT consulting tasks that can be offshored. Suppliers have engaged IT talent in low-cost geographies like India, Eastern Europe and South/Latin America, to provide activities such as ERP implementation support, clearly indicating an increase in offshorability of all IT consulting activities except such few highly interactive ones that necessitate an onsite presence."

The Everest-Bernstein research of the IT consulting market analyzes these shifts in demand drivers, details findings from interviews and profiles the consulting capabilities of 15 participating IT services companies surveyed for the study: Accenture, Atos Origin, CSC, Cognizant, EDS, Perot Systems, Genpact, HCL, L&T Infotech, Patni, Sapient, Satyam, Softtek, TCS, and Wipro.

Rod Bourgeois, Senior Analyst of Bernstein Research, argues, "In the past, killer software applications and the economic cycle were the primary drivers of IT consulting demand, but our research has emphasized that today's consulting market is characterized by lessened economic sensitivity and supported by a diverse set of demand drivers that vary substantially by industry vertical."

Source : Equity Bulls

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