Partnerships between Like-Minded Co.s Work Well in the Mid-Market

Global Services magazine, May 21, 2009.
This article discusses the opportunities that exist for mid-sized IT services companies during recession and how they are better positioned in handling the needs of their customers.

Mid-sized service providers are better able to understand the needs of mid-market customers, reveals a buyer of outsourcing services
By Imrana Khan

Mid-sized service providers are a better suit to handle mid-market customers. At least that’s what such customers feel. Reasons: Their responsiveness, flexibility, and proactive approach in understanding real business issues.

“For customers like us that have dynamic requirements and a strong sense of urgency, its beneficial working with a mid-sized firm as we gain the flexibility, attention and support that is a must for success for both parties,” said one of ValueLabs’ customers Surojit Bagchi, Vice President, Technology, IRISS Electronic Travel Distribution, a mid-size integrated reservations, invoicing and settlement system provider and serves as a single point connection between the Airlines and Agents. In tough times, “It is evident that our premise for outsourcing is validated in terms of accessibility to senior management, responsiveness and flexibility and willingness to go the extra mile,” he added while revealing the reasons behind choosing a mid-sized outsourcing partner like ValueLabs.

Small and mid-sized service providers such as ValueLabs that employs about 1,500 people and offers offshore software product development, QA / testing and knowledge-process outsourcing services to startups and mid-sized companies, are also cashing on this opportunity.

“While these are tough times, there are opportunities for IT companies that are agile and customer-focused. Recession has forced companies worldwide to cut costs, improve operational efficiency and look for greater value for their investments. Customers are now looking for service providers that are flexible, responsive and proactively align themselves with their goals effectively,” said Ram Manjeri, SVP, Sales and Marketing, ValueLabs. “Global slowdown has not impacted all the industries uniformly. Despite the grim macroeconomic situation, certain industries and horizontals are still doing well and are displaying good potential for growth. Healthcare, Telecom, Media and Entertainment industries are expected to continue their robust growth at least in the near term. Essential technology services such as infrastructure management will continue to do well even in a slowdown.”

Also, the provider agrees that it’s been difficult for the company to make its new customers stick to them in a recessionary environment. And hence, many of its new customers have canceled their partnerships in the recent past. However, many existing outsourcing relationships have gone deeper, and the company has been able to live up to its customers’ expectations and add extra value to each outsourcing deal.

“Mid-size companies seem to take far better care of their employees, and have a sense of belonging and being a part of the team — so attrition and surprises are lower, while providing an avenue for developer growth and access to bleeding edge innovation when engaging with fast paced startups,” said IRISS’ Surojit.

“Well-run mid-sized companies will continue to focus on these opportunities and will fare well in these times. Also, there will be clear opportunities in the regions beyond the U.S. and Europe. At the end of the day, companies that continue to provide strong value and innovative solutions will emerge stronger,” stated Ram.

Even though the company foresees many opportunities ahead for itself, it also predicts growth to decline. It’s not expecting to reach its annual growth rate of 65 percent and might end up posting a growth of between 30 to 40 percent, as per the spokesperson. However, the OPD firm also believes that its strong fundamentals have been able to run its business smoothly without major hiccups in economic downturn.

“It may be surprising to many, but we had anticipated this slowdown for over three years now,” said Ram. The recession can be handled strategically, if one is proactive. The time is extremely challenging but not for the companies that have kept their eyes on fundamentals. In 2005, the company hired 200 fresh grads who generally take eight to nine months to deliver. A year later the company foresaw the recession and hired lesser number of new recruits.

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