Friday, August 28, 2009

A perspective on competitive positioning of IT Services companies?

Not every IT services company have the same strengths or short-comings, nor do they claim to differentaite themselves similarly in the market-place. Their differentiators are often subtle and somtimes it makes it very difficult for clients to make an objective selection or short-listing of an IT services firm. The choice of a right IT services firm for a desired service (AM, AD, Consultng, Trasformation) varies widely be some key factors

1. Cost (Delivery, Year-on-Year Savings, etc)
2. Quality (People, Delivery, case studies, Services, etc.)
3. Capital (experiences, Assets, capabilities, productized services, etc.)
4. Flexibility (ability to meet client diverse requirements and remodel their delivery to suit client requirements)
5. Scalability (size, ability to grow in size and scale to provide services across the regions where client may require servie)
6. Portfolio (the ability to handle different portfolio of services, products, etc.)
7. Commercial/contractual limitations (FX, COLA, Tax treatment, Partnerships, Jt. GTMis etc.)

There are lot of other soft factors (relationship, ongoing service, prior experience, preferences, perceptions, etc). These often tend to not very objective.

The perception that I document here are based on the insights of different IT service providers in the market. These are not based on any objective assessment (based on factors listed above), survey results or facts. Some of these could be superficial/erroneous, neverthless I would take a pass at it for some top-tier companies in India that seemed to have being great offshore players:

TCS - Cost Leader
Wipro - Quality Leader
Infosys - Flexibility Leader
HCL - Commercial/Contractual Leader
Cognizant - Scalability Leader

For the large tier 1 vendors their
IBM - Portfolio/Capital Leader
HP - Portfolio/Capital Leader
Accenture - Multiple dimension (difficult to clearly get their sharp market position)
Cap Gemini - Unknown

There are lot of niche companies whose positioning has superceded the above common factors. These niche players are identified below:

Tech Mahindra - Telecom Services (this assessment is before Satyam was acquired)
Sasken - Embedded Product development

What are the other factors and perceptions you share based on your insights?

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