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IT outsourcing companies: Indian quality ranking much higher than that of Western competitors

Frédéric Lasnier
Frédéric Lasnier
Chief Executive Officer

According to a survey of 3,700 clients, Indian IT services companies wipe out their European competitors in terms of quality, turning offshore delivery into a superior model. Are you surprised? I’m not, and neither are those working at the core of long distance projects…

The European study conducted by Whitelane Research reveals two things about the quality of IT outsourcing companies. The most striking-one refers to the ranking domination by the Indian providers that monopolize the first 3 positions and occupy a total of 6 out of the first top 10 positions. The second-one is that France occupies 6 positions out of the 22 listed, coming third after the Americans and Indians, but way ahead of European competitors. British and German providers seem to be lagging behind as far as quality is concerned.

I will limit myself to commenting upon the Indians’ performance, which is, in my opinion, worth commenting upon a little bit more. I further note that Indian IT services companies are best ranked in France, despite a growing market share which is, nevertheless, lower than in the rest of Europe. This certainly foreshadows very high gains in terms of market share in France.

For Western companies, the bad thing is that low cost now goes with higher quality

I think this ranking will take everyone by surprise except the offshore and nearshore IT services companies which invest more heavily than their Western counterparts in service quality, internalised production methods which increase the teams’ responsibility, as well as in technical and methodological training. An internalised production logic at the client’s premises has two major consequences. The first one is, beyond any doubt, marketing attractive: the development of a culture specific to each client service centre around the latter’s specific identity.

The second-one is related to the fact that this focus on quality is embodied, on the one hand, by dedicated teams which are more stable than traditional staff augmentation resources (contrary to what old school IT services companies say), and the real management of results, KPIs, participation in methodological or architectural meetings with a partnership spirit on the other hand. All of that happening in a properly equipped business environment. Client visits at our premises are an opportunity for privileged exchanges which favour contributions at every level of the client and provider’s decision-making process. As a result, offshore IT services companies, which represent a safer environment by definition, and which create a specific intimacy, develop customised in-house cultures that clients can properly perceive and appreciate. This culture subsequently feeds off the success obtained day by day with the clients, a reality confirmed by all our visitors.

Last but not least, a thing I’ve noticed is that remoteness creates less and less problems when time difference is not too unfavourable. The reason for that is that long distance communication is constantly improving thanks to adapted tools and especially to efficient telecom networks.

European nearshore providers would probably be ranked much higher

At Pentalog we also measure our customers’ satisfaction and recommendation rate. Their satisfaction rate is based on more or less the same criteria used by Whitelane Research and has recently reached 83%, whereas their recommendation rate varies between 91 and 95%, depending on the year. Eastern European providers are not ranked in this study since they are too small, but their performance would probably be even higher.

Because they have been so heavily criticised by competition, offshore IT services companies have become way better and are now targeting the highest quality level!

Finally, this ranking is a biter bit story mixed with Western vanity, as it is usually the case with so many other sectors. When only commenting upon one’s competitors with contempt, relentlessly restating the same thing for 10 years without even looking serious, one will always fall flat on his face. Although seldom, I even felt a bit of racism during polite conversations, and of typically French colonial condescendence about this topic from some CEOs of IT services companies. How can we constantly deny that those companies obtaining the best margins can invest in quality, exports and R&D and that, in the end, they are always the winners?


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