New IT Outsourcing Rates Report Helps Clients Negotiate with Indian Vendors, Cut Costs

The release describes a research report about IT outsourcing rates. IT executives will be interested in this report, which is based on interviews with Indian IT outsourcing vendors, that compares the rates of the vendors.

FOR IMMEDIATE RELEASE

CONTACT:
Eric J. Carrig
Pipal Research Corporation
Chicago, IL 60606
Phone: 312-341-1747
http://www.pipalresearch.com   
eric.carrig@pipalresearch.com   

New IT Outsourcing Rates Report Helps Clients Negotiate with Indian Vendors, Cut Costs

Chicago, IL, July 9, 2002 --

Client organizations seeking to renegotiate their IT outsourcing contracts should act soon because Indian IT outsourcing vendors are offering rates that are 40 percent to 50 percent lower than they were in 1999 and 2000, around when many clients entered into their contracts.

According to a report published by Pipal Research Corporation, which studied the rates offered by a variety Indian vendors, even if companies are not outsourcing IT functions, now is a great time to initiate discussions to take advantage of these lower rates. But time is of the essence because Indian IT outsourcing vendors have said in interviews with Pipal that they plan to increase rates by five-to-ten percent in 2002.

We discovered that not only can client companies reduce onsite, offshore and blended rates by up to 50 percent, they often can obtain better IT skills and more qualifications at lower rates," said Eric Carrig, research manager with Pipal.

Larger, more skilled and global Indian IT vendors offer rates as low as $21/hour for offshore work and smaller firms may go well below $20/hour," Carrig said. For onsite projects, the larger vendors offer rates near $65/hour and smaller firms may drop rates into the mid-$50/hour range. For blended work, clients should seek hourly rates slightly above $30/hour for larger firms and just under $30/hour for smaller firms."

Through interviews with senior sales managers at Indian IT vendors, Pipal Research also discovered that a Fortune 500 financial services company with 500 FTEs under consideration could save up to 40 percent from its current IT outsourcing relationship and nearly 24 percent even if it switched to a larger, perhaps more skilled and experienced, firm.

In addition to providing the rates different Indian IT outsourcing vendors offer, this report also covers:

•   Descriptions of the types of IT outsourcing vendors from India
•   A case study about the savings a company realized it could capture by using this benchmarking information on rates
•   An overview of the IT outsourcing market, including a description of the different types of IT outsourcing relationships and a comparative analysis of different countries as outsourcing destinations
•   Detailed profiles of select Indian IT vendors.

For more information, please contact Eric Carrig, at Pipal Research Corporation at 312-341-1747 or email us at eric.carrig@pipalresearch.com.