Service logistics and the evolving competitive landscape: A case study of the Indian IT services industry

Jari Kettunen, Krishanu Rakshit, Markku Mikkola

    Research output: Chapter in Book/Report/Conference proceedingConference article in proceedingsScientificpeer-review

    Abstract

    The leading Indian IT service providers are actively expanding their operations around the world. While this development translates into new demands and threats for many Western technology and professional services companies, it also provides them with new business opportunities. The main objective of this case study is to help Western technology and professional services companies analyse the situation and develop competitive and co-operation strategies vis-à-vis the Indian IT majors. The paper describes how IT services are exported from India and identifies the major strengths, weaknesses and coping strategies of the Indian IT services export industry. Finally, alternative competition and co-operation models are proposed on the basis of identified comparative advantages. In total, 14 semi-structured interviews were carried out with top and mid-level executives at four major IT services companies in India in August 2005. In addition, six interviews were conducted at the Indian Institute of Management Bangalore with academics possessing applicable areas of expertise. Apart from these interviews, various sources of secondary information were used, including data and reports from industry associations, research organisations, business periodicals and academic publications. An important factor contributing to the success of the Indian IT services export industry has been the application of the global delivery model, supplemented by a steady supply of fresh graduates at low cost and an ability to offer a wide selection of services for many lines of business. On the other hand, employment costs in India are rapidly increasing. The development of well-known product brands and IPR has also proved difficult for most Indian IT companies. These two factors erode the Indian cost advantage and add to the challenge of maintaining good profit margins in the future. Our findings suggest that while Western technology and professional services companies can often enhance their competitiveness by investing in customer intimacy and IPR development, smaller companies in particular should also explore the prospects of establishing partnerships with the Indian IT majors. Such co-operation may involve, for example, technology licensing, joint solution building and international marketing. The biggest Indian IT service providers possess ample resources and a global reach, and they are actively looking for new ways of improving their position in the global software product market. The key is to identify each others' comparative advantages and to assess the potential benefits of establishing strategic co-operation against related investment, counterfeit and defection risks
    Original languageEnglish
    Title of host publicationProceedings of the 13th International Symposium on Logistics, ISL 2008
    Subtitle of host publicationIntegrating the Global Supply Chain
    Place of PublicationNottingham, UK
    PublisherUniversity of Nottingham
    Pages506-513
    ISBN (Print)978-0-85358-219-9
    Publication statusPublished - 2008
    MoE publication typeA4 Article in a conference publication
    Event13th International Symposium on Logistics, ISL 2008 - Bangkok, Thailand
    Duration: 6 Jul 20088 Jul 2008
    Conference number: 13

    Conference

    Conference13th International Symposium on Logistics, ISL 2008
    Abbreviated titleISL 2008
    CountryThailand
    CityBangkok
    Period6/07/088/07/08

    Keywords

    • service logistics
    • IT services
    • India
    • exports
    • competition
    • competitive advantage
    • partnership
    • comparative advantage
    • acquisition
    • product business
    • IPR
    • SME

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  • Cite this

    Kettunen, J., Rakshit, K., & Mikkola, M. (2008). Service logistics and the evolving competitive landscape: A case study of the Indian IT services industry. In Proceedings of the 13th International Symposium on Logistics, ISL 2008: Integrating the Global Supply Chain (pp. 506-513). University of Nottingham. http://www.isl21.org/wp-content/uploads/pdf/13thISLProceedings-Bangkok-Thailand.pdf