How to Create the Next Outsourcing Giant Like Infosys or TCS?
For decades, India has been the world’s top destination for IT services and business process outsourcing. Global giants like Infosys, TCS, Wipro, and Cognizant were born in India and have powered the country’s rise as an economic powerhouse.
As the outsourcing industry matures, what does it take to create the next outsourcing behemoth? This post analyzes the success strategies of Infosys and TCS and provides a blueprint for aspiring entrepreneurs to build the next outsourcing giant.
The Rise of Infosys and TCS: Key Success Factors
Infosys and TCS are two of India’s biggest IT services and consulting companies. Founded in the 1980s, they rode the first wave of IT outsourcing and grew rapidly along with the Indian IT industry. Some key factors drove their meteoric rise:
Filling the Offshoring Gap
In the 1980s, Western companies began looking to offshore IT services to lower costs. Indian firms like Infosys and TCS capitalized on this trend by providing high-quality technology talent and solutions at a fraction of the price. They filled a crucial gap in the global IT services market.
Focus on Excellence
From the beginning, Infosys and TCS focused on recruiting the best engineering talent in India and training them to deliver outstanding services. Their technical and process excellence built a reputation that attracted top global clients.
Strong Visionary Leadership
Legendary founders like N.R. Narayana Murthy (Infosys) and F.C. Kohli (TCS) provided visionary leadership and instilled a culture of innovation. This helped the companies grow rapidly and stay ahead of trends.
Robust Business Models
Both companies pioneered the Global Delivery Model to leverage India’s talent pool in delivering complex projects. They also focused on long-term client relationships and end-to-end offerings. This provided a solid foundation.
Brand and Scale Building
Infosys and TCS invested heavily in building their brand as premium providers of technology solutions. They expanded across geographies and service lines to achieve scale and emerge as full-service providers.
By getting these elements right in the early years, Infosys and TCS gained an unbeatable edge that propelled them to the top.
Blueprint for Building the Next Outsourcing Giant
The success of Infosys and TCS provides important lessons for aspiring entrepreneurs. Here is a blueprint based on their playbook:
Start by Identifying a Key Market Gap
Look at the global IT services market to find gaps in delivery models, offerings, geographies, or client segments that remain underserved. Develop solutions specifically targeting that space.
For example, software testing remains a huge opportunity. Many smaller companies like ZenQ have found success by focusing on specialized areas like test automation.
Build a Skilled and Scalable Talent Engine
Access to a large pool of skilled technology talent has been a major driver for Indian IT companies. Build your talent pipeline by:
- Recruiting from Tier-2/3 engineering colleges with good quality curriculum. Tier-2 talent is more affordable.
- Conducting intensive training programs on technical and soft skills.
- Creating opportunities for continual learning and career growth to retain talent.
- Establishing partnerships with colleges to customize curriculum and training programs.
Deliver Excellence Consistently
Excellence is table stakes to succeed in this business. Some areas to focus on:
- Robust processes: Invest in frameworks for project management, quality control, and information security right from the start. Getting these right will help deliver seamless services as you scale.
- Domain expertise: Build specialized capabilities in high-demand areas like cloud, analytics, user experience etc. Domain expertise earns client trust.
- Automation: Automate repetitive processes using AI/ML to improve efficiency, speed, and consistency.
- Certifications: Getting internationally recognized quality certifications builds credibility with global clients.
Develop a Clear Technology Vision
To emerge as a leader, you need a technology vision that anticipates where the market is heading. For instance, shifting focus to digital services allowed many companies to stay relevant. Some technologies to consider:
- Cloud, containers, and microservices
- Data analytics and AI/ML
- Advanced automation
- Blockchain
- Quantum computing
- IoT and smart devices
The vision should guide investments in building expertise and IP. It will also help attract the right technical talent.
Build Effective Client Relationships
Clients have plenty of options today, so you must differentiate yourself. Ways to earn client loyalty:
- Understand their business needs and act as a strategic partner, not just a vendor.
- Provide customized solutions tailored to their specific requirements. Don’t be afraid to co-innovate.
- Offer pricing models like outcome-based pricing that provide business value.
- Help clients stay ahead of technology shifts that impact their business.
- Invest in account management and customer success skills.
Be Flexible and Adaptable
The technology landscape evolves rapidly. You need to adapt business models and offerings nimbly to industry disruptions. For instance, the shift to the cloud required companies to transition from traditional licensing models to SaaS subscriptions. Leaders like Infosys have managed such transitions well.
Pursue Strategic Growth
Once you achieve product-market fit and initial traction, focus on strategic growth:
- Expand to new regions and client segments.
- Broaden service capabilities through partnerships and acquisitions.
- Pursue large deals to acquire anchor clients that can accelerate your growth.
- Build a global delivery model that provides scale and flexibility.
Develop a Strong Culture and Brand Image
A distinctive, client-centric culture like Infosys’ founders instilled plays a huge role in success and talent retention. Promoting your brand image as a next-gen, quality-focused company also helps attract clients and talent.
The Future is Bright for Outsourcing
While early pioneers captured much of India’s outsourcing boom, there remain substantial new opportunities:
- Many global businesses still rely heavily on legacy systems and have yet to truly harness digital transformation and emerging technologies like AI, blockchain, etc. This provides an estimated $200 billion opportunity by 2025.
- Disruptions due to the pandemic have also accelerated digital adoption across industries. Developing solutions for a post-COVID world can open new avenues.
- Niche areas like cloud orchestration, MLOps, IoT, and network virtualization have seen the rise of startups like Druva, Uniphore, and ElasticRun. They point to the potential for specialization.
- New demand is opening up as regions like Latin America, Southeast Asia, and Eastern Europe embrace outsourcing. Geographic expansion early on can be rewarding.
By applying the strategies outlined in this post, forward-thinking entrepreneurs can capitalize on such opportunities and chart the path to build the next outsourcing powerhouse from India!
