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New Operating Model Needed for Growth of IT Sector

by: Sarah Joson

Thursday, February 16, 2012 | Outsourcing News |

Advisory services firm KPMG and India’s National Association of Software and Services Companies (Nasscom) recently released a study called “Hub & Spoke Operating Model for the Indian information technology and business process outsourcing (IT-BPO industry)”, which states that new strategies are needed for growth and Indian IT companies can undertake global hubs and lead the IT outsourcing sector, so long as the Indian government and other notable organizations are in favour of their plans.

The report shows that clients and providers prefer flexible models that can help them manage multiple locations, reinforce partnerships, and build their brand. The model that is expected to accomplish all these goals is the Hub & Spoke model, which basically means having several locations that will perform the back end processes, while assigning a central ‘hub’ or a core facility for the entire operation.

The hub will also be responsible for management-related work such as skills development, customer support, monitoring, and even employee management roles. The spokes will then be regarded as flexible delivery centres which can be modified based on the requirements of the company.

Genpact’s President and CEO NV ‘Tiger’ Tyagarajan said the Hub & Spoke model can lead to more opportunities for IT providers, especially for India, a prime destination for ITO/BPO services due to several factors such as availability of workers, lower costs, and skill advantage.


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