Success and failure of firms in the IT outsourcing industry

Abstract

In the year 2004 amidst the hype against outsourcing heard in the wake of elections something important happened: the first few IT outsourcing companies crossed the threshold of billion dollars in revenue (viz. TCS, Infosys, Wipro). Although there has been much attention given to the outsourcing and the models of IT outsourcing, not much has been heard on the actual players and their dynamics. The primary objective of this thesis is to explore the outlook and behavior of the IT outsourcing companies, the factors driving their growth, their business and marketing strategies, threats from competition, and limitations to growth. 1 have tried to study the factors to which the success and failure of IT firms can be attributed. For the ease of study, I have categorized them under Marketing, Strategy and Organizational factors. Case studies have been developed to present the happenings of the business, its key players, project scenarios, milestones, organizational structures etc. and relevant data in a narrative fashion, which then is laid open to exploration and further investigation using a variety of tools. The approach of system dynamics meshes well with the case study method as in essence it tries to model the real world descriptively. I have used system dynamics to study the inter-relations between the various factors in play. The end objective of this study is to deliver a set of recommendations and frameworks for success and failure in the IT outsourcing space, which can be used as recommendations for: Existing players in the IT outsourcing space. New entrants to the IT outsourcing industry. Employees working in IT outsourcing companies. HR and Project Managers of IT outsourcing companies.