Skip to main content
  • login
  • contact
  • language
    • English
    • Français
    • Español
    • Português
    • Deutsch
    • 简体中文
    • 日本語
  • search
X
GEP Logo GEP Logo
  • Company
    • Leadership
    • Customers
    • Partners
    • Sustainability at GEP
    • News
    • Events
    • Culture
    • Mission & Vision
    • Awards & Recognition
  • Solutions
    • Strategy
      • Procurement Consulting  
        • Procurement Transformation
        • Digital Procurement Transformation
        • Opportunity Assessment
        • M & A Services
        • Strategic Cost Management
        • Supply Risk Management
      • Supply Chain Consulting  
        • Environmental, Social and Governance
        • Socially Responsible Sourcing
        • Supply Chain Strategy
        • Supply Chain Diagnostics
        • Inventory Optimization
        • Network Optimization
      Software
      • GEP SMART  
        • Procurement Software
        • Direct Procurement Software
        • Indirect Procurement Software
        • Digital Procurement Transformation
        • Master Data Management
        • AP Automation
        • Spend Management
        • SMART S2P Technology
      • GEP NEXXE  
        • Supply Chain Visibility and Execution
        • Supply Chain Planning
        • Supply Chain Collaboration
        • Supply Chain Control Tower
        • Should-Cost Modeling
        • Inventory and Warehouse Management
      • GEP CLICK  
      • GEP MINERVA  
      Managed Services
      • Procurement Outsourcing  
        • Source-to-Contract
          • Spend Analysis
          • Strategic Sourcing
          • Category Management
          • Supply Market Intelligence
          • Tail-Spend Management
          • Procurement Support Services
        • Procure-to-Pay
          • Cost Recovery & Invoice Auditing
          • Accounts Payable
      • Supply Chain Outsourcing  
        • Planning & Forecasting
        • Inventory Management
        • Logistics Management
        • Supply Chain Data Management
        • Supply Chain Risk Management
  • Industries
    • Automotive
    • Chemicals
    • Consumer Packaged Goods
    • Energy & Utilities
    • Financial Services
    • Government & Nonprofit
    • Industrial Manufacturing
    • Life Sciences
    • Oil & Gas
    • Retail
    • Telecommunications, Media & Technology
    • High-Tech
    • Media & Entertainment
    • Software, Social & Platforms
    • Telecom
    • Travel & Hospitality
  • Knowledge Bank
    • Digital Transformation
    • Software & Technology
    • Strategy & Planning
    • Operations
    • Procurement
    • Sustainability
    • Insights From the Top
    • COVID-19 Resource Center
    • Inflation Strategies
  • Careers
    • Join Us
    • GEP Per Se
    • Campus Connect
  • Partners
   
  • GEP Strategy ›
    • GEP Strategy
    • ‹ Back
      • Procurement Consulting ›
        • Procurement Consulting
        • ‹ Back
          • Procurement Transformation ›
            • Procurement Transformation
            • ‹ Back
              • Procurement Strategy
              • Org. Design & Implementation
              • Capability Building
              • Change Management
              • Governance & Performance
              • Processes & Policies
              • S2P Operations
              • Sourcing & Category Management
              • Technology
          • Digital Procurement Transformation
          • Opportunity Assessment
          • M&A Services ›
            • M&A Services
            • ‹ Back
              • M&A Clean Room
          • Strategic Cost Management ›
            • Strategic Cost Management
            • ‹ Back
              • Zero-Based Budgeting
          • Supply Chain Risk Management
      • Supply Chain Consulting ›
        • Supply Chain Consulting
        • ‹ Back
          • SUSTAINABILITY AND RESILIENCE
          • Environmental, Social and Governance
          • Socially Responsible Sourcing
          • Scope 3
          • PLAN
          • Digital Planning, S&OP, S&OE
          • Collaborative Planning
          • PROCURE
          • Source To Contract
          • Procure To Pay
          • MAKE
          • Inventory Strategy & Management
          • Operations & Manufacturing Excellence
          • DELIVER
          • Network Strategy & Optimization
          • Warehousing & Transportation Management
  • GEP Software ›
    • GEP Software
    • ‹ Back
      • GEP SMART ›
        • GEP SMART
        • ‹ Back
          • Procurement Software
          • Direct Procurement Software ›
            • Direct Procurement Software
            • ‹ Back
              • Bill of Materials Management
              • Data Analytics & Reporting
              • Inventory Management
              • Master Data Management
              • Quality Management
              • Supplier Collaboration Portal
              • Supply Chain Operations
          • Indirect Procurement Software ›
            • Indirect Procurement Software
            • ‹ Back
              • Source-to-Contract
              • Spend Analysis
              • Savings Project Management
              • Category Management
              • Contract Management
              • Savings Tracking
              • Sourcing
              • Supplier Management
              • Procure-to-Pay
              • Guided Buying
              • Procurement Portal
              • Catalog Management
              • Order Processing
              • Invoice Management
          • Digital Procurement Transformation
          • Master Data Management
          • Product Accessibility
          • AP Automation
          • Spend Management
          • SMART S2P Technology
      • GEP NEXXE ›
        • GEP NEXXE
        • ‹ Back
          • Supply Chain Visibility and Execution ›
            • Supply Chain Visibility and Execution
            • ‹ Back
              • Inventory and Warehouse Management
              • Logistics Visibility
              • Control Tower
          • Supply Chain Planning ›
            • Supply Chain Planning
            • ‹ Back
              • Supply Chain Control Tower
              • Should-Cost Modeling
              • Demand Planning
              • Supply Chain Bill of Materials
              • Supply Chain Direct Sourcing
              • Supply Planning
          • Supply Chain Collaboration ›
            • Supply Chain Collaboration
            • ‹ Back
              • Forecast Collaboration
              • Purchase Order Collaboration
              • Quality Collaboration
              • Capacity Collaboration
              • Quality Management Software
          • Supply Chain Control Tower
          • Should-Cost Modeling
          • Inventory and Warehouse Management
      • GEP CLICK
      • GEP MINERVA
      • Innovation ›
        • Innovation
        • ‹ Back
          • Emerging Technologies
          • Native to Cloud
          • Native to Mobile
          • One Unified Platform
          • Security
          • User-Centric Design
  • GEP Managed Services ›
    • GEP Managed Services
    • ‹ Back
      • Procurement Outsourcing ›
        • Procurement Outsourcing
        • ‹ Back
          • Source-to-Contract
          • Spend Analysis
          • Strategic Sourcing ›
            • Strategic Sourcing
            • ‹ Back
              • MRO
              • CAPEX
              • Logistics
              • Packaging
              • IT & Telecom
              • Energy
              • Direct Materials
          • Category Management ›
            • Category Management
            • ‹ Back
              • Contract Management
              • Supplier Performance Management
              • Savings & Compliance Tracking
          • Supply Market Intelligence
          • Tail-Spend Management
          • Procurement Support Services ›
            • Procurement Support Services
            • ‹ Back
              • eSourcing
              • Supplier Performance Management
              • Savings & Compliance Tracking
              • Sourcing Support
          • Procure-to-Pay
          • Cost Recovery & Invoice Auditing
          • Accounts Payable
      • Supply Chain Outsourcing ›
        • Supply Chain Outsourcing
        • ‹ Back
          • Planning & Forecasting
          • Inventory Management
          • Logistics Management
          • Supply Chain Data Management
          • Supply Risk Management
  • Industries ›
    • Industries
    • ‹ Back
      • Automotive
      • Chemicals
      • Consumer Packaged Goods
      • Energy & Utilities
      • Financial Services
      • Government & Nonprofit
      • Industrial Manufacturing
      • Life Sciences
      • Oil & Gas
      • Retail
      • Telecommunications, Media & Technology
      • High-Tech
      • Media & Entertainment
      • Software, Social & Platforms
      • Telecom
      • Travel & Hospitality
  • Knowledge Bank ›
    • Knowledge Bank
    • ‹ Back
      • Digital Transformation
      • Operations
      • Procurement
      • Software & Technology
      • Strategy & Planning
      • Sustainability
      • Podcasts
      • Insights from the Top
      • COVID-19 Resource Center
      • Inflation Strategies
  • Company ›
    • Company
    • ‹ Back
      • Leadership
      • Customers
      • Partners
      • Sustainability at GEP
      • News
      • Events
      • Culture ›
        • Culture
        • ‹ Back
          • GEP Core Values
          • Women@GEP
          • Diversity
          • GEP Cares
      • Mission & Vision
      • Awards & Recognition
      • Contact Us
  • Global Presence ›
    • Global Presence
    • ‹ Back
      • Americas ›
        • Americas
        • ‹ Back
          • English
          • Español
          • Portugués
      • Europe ›
        • Europe
        • ‹ Back
          • English
          • Deutsch
      • Asia-Pacific ›
        • Asia-Pacific
        • ‹ Back
          • English
          • 中文
      • Middle East ›
        • Middle East
        • ‹ Back
          • English
          • العربية
  • Contact Us
  • Careers ›
    • Careers
    • ‹ Back
      • Join Us
      • GEP Per Se
      • Campus Connect
  • Language ›
    • Language
    • ‹ Back
      • English
      • Français
      • Español
      • Deutsch
      • Português
      • 简体中文
      • 日本語
  • Rapid Response from GEP
  • BLOGS
  • Strategy
  • Technology
  • MIND
Contact Us
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Breadcrumb

  1. HOME
  2. BLOG
  3. MIND
  4. IMPACT US ELECTIONS INDIAN OUTSOURCING SECTOR
Blog Image

Impact of U.S. Elections on the Indian Outsourcing Sector

December 16, 2016 | IT & Telecom Blogs

The results of the U.S. Presidential elections have elicited nervous and unsure responses in the last few weeks from IT outsourcing major players. The Indian-dominated offshore IT services market has already been in the doldrums due to weak quarterly results and rather pessimistic forecasts issued by most Indian IT services – the rising ‘threat’ of Robotics Process Automation and intense competitive rivalry on new contracts/renewals, where an increased propensity to multi-source while shortening contract duration has challenged top and bottom lines of the outsourcing markets. And Trump’s victory isn’t likely to elevate their spirits, at least in the shorter term.

Donald Trump’s big promise during his much-talked about 18-month campaign has revolved around getting offshored jobs back to the United States. This clearly leads to tightening of immigration and offshoring policies to curb or limit outsourcing – the route that most U.S. corporations take to yield the benefits of labor arbitrage. Trump’s position could deliver a telling blow to the Indian IT outsourcing business, which derives nearly 60% of its revenues through businesses in the United States.

Challenges About to Hit the Indian Outsourcing Business

The mix of temp vs permanent staff is about to drastically change:

  • Trump’s key delivery mechanism to address his election rhetoric of “downsizing” the outsourced portfolio will revolve around hiking the minimum H1B salaries from existing US$ 60K to US$ 100K – a staggering 67% hike! Additionally, he also mentioned levying a 35% tax on products made by American firms that either outsource jobs overseas or build manufacturing facilities in other countries. This poses serious questions on the viability of upcoming outsourcing deals, as such measures will neutralize the “value” propositions of onboarding H1Bs/L1s/B1s on complex engagements onshore. This is expected to hit the competitiveness of the Indian outsourcing majors and is likely to threaten their very existence.

Cloud-based service delivery and automation will expand the competitive footprint:

  • The hike in fees for the temporary workforce is expected to make maintenance and support activities very tedious for the enterprises, as, from their perspective, salary hikes are expected to spike the costs of maintaining legacy systems and processes. Standard solutions that do not have a heavy offshore-reliant approach and automation initiatives that lessen the dependence on labor are expected to become highly popular, and widely adopted approaches with the enterprises whose offshore-reliant IT and BPO contracts are nearing their respective anniversaries. This is going to further introduce a cluster of cloud and automation service/solution providers in an already cluttered and fragmented market and is expected to lend an added edge to existing competitive rivalries.

I foresee challenging times ahead for the Indian IT and BPO suppliers – and their recent quarterly announcements and tepid forecasts for the next year lends support to my view. One can expect large scale consolidation to happen in the industry. Smaller outsourcing organizations may lose relevance and struggle to survive while the bigger organizations with a wealth of cash deposits will look to acquire or partner with U.S.-based start-ups (to strengthen the digital portfolio) or U.S.-based established firms (consulting firms can be a likely ally for strengthening the consulting capabilities of the outsourcing majors) to impact the nationality mix of their workforce.

We recommend that sourcing and procurement executives, anchoring key outsourcing contracts for their respective organizations, to take a hard and honest look at the viability of their supplier partners to sustain and survive amidst the mentioned challenges and the upcoming competitive onslaught. They should make future partnership decisions only when this essential due-diligence measure has been considered and executed.

 

Add Comment +

FEATURED POST

...
Supply Chain Strategy Blogs

How to Effectively Monitor Scope 3 Emission Reporting From Your Supply Chain

...
Supply Chain Software Blogs

From Cost to Resiliency: How Supply Chain Priorities Have Changed

    BLOG CATEGORIES

  • Marketing Blogs
  • Professional Services Blogs
  • Pharma and Life Sciences Blogs
  • IT & Telecom Blogs
  • Logistics Blogs
  • Chemicals Blogs
  • Energy & Utilities Blogs
  • Market Intelligence Blogs
  • Oil and Gas Blogs
  • MRO Blogs
  • Facilities Management Blogs
  • Supply Chain Blogs
  • Human Resource Blogs
  • Procurement Process and Excellence Blogs
  • Agro Blogs
  • CAPEX Blogs
  • Direct Materials Blogs
  • Packaging Blogs
  • Automotives Blogs
  • Healthcare Blogs
  • Corporate Travel Blogs
  • Metals & Minerals Blogs
  • Technology Blogs
  • Awards and Events Blogs
  • Category Management Blogs

TAGS

sustainability
Procurement Software
supply chain strategy
Inflation
Russia-Ukraine War

By checking the box below, you consent to GEP using your personal information to send you thought leadership content – such as white papers, research reports, case studies – and other communications. GEP representatives may contact you to provide additional information or answer questions.

If at any point in time you decide to withdraw your consent, you may unsubscribe by emailing your request to us at privacy@gep.com.

Please refer to the GEP Privacy Statement to understand how we manage and protect your personal information.

Terms of Use | Privacy Statement

Contact Us

Ask Us

Send us your question(s)

RFP

Request for a business proposal

Feedback

Share your thoughts, comments and suggestions

Demo

Schedule a live demo of our software

Discover
STRATEGY
Strategy
  •   Procurement Consulting
  •   Digital Procurement Transformation
  •   Strategic Cost Management
  •   Opportunity Assessment
  •   Supply Chain Risk Management
  •   Supply Chain Consulting
  •   Supply Chain Strategy
  •   Supply Chain Diagnostics
  •   Inventory Optimization
  •   Procurement Transformation
  •   Sustainability and ESG Consulting
SOFTWARE
Software
  •   Procurement Software
  •   Supply Chain Software
  •   Source-to-Contract
  •   Procure-to-Pay
  •   Supply Chain Planning
  •   Supply Chain Collaboration
  •   Supply Chain Visibility & Execution
  •   Supply Chain Control Tower
  •   Should-Cost Modeling
  •   Inventory & Warehouse Management Software
  •   Source-To-Pay Software
MANAGED SERVICES
Managed Services
  •   Procurement Outsourcing
  •   Strategic Sourcing
  •   Tail-Spend Management
  •   Category Management
  •   Procurement Support Services
  •   Supply Chain Outsourcing
  •   Supply Chain Planning & Forecasting
  •   Inventory Management
  •   Logistics Management
COMPANY
Company
  •   About Us
  •   Leadership
  •   Customers
  •   Sustainability at GEP
  •   Careers
  •   News
  •   Awards
  •   Partners
  •   Contact Us

Fresh Insights, Now on Your Phone

  • Dowmload On The App Store Button
Stay Connected
  •  
  •  
  •  
  •  

Latest Tweets

  • We’re glad to welcome our new class of Technology interns who’ve joined through the GEP Internship Program 2023. He… https://t.co/jwJcZT1a6s

  • How can organizations track and report #ESG metrics accurately? #GEP shares a six-point framework to help leaders d… https://t.co/AdrBBSruH6

  • With #CAPEX continuing to be a top priority for #CFOs, how can companies mitigate #SupplyChain #inflation risks? So… https://t.co/4cSw24jmcq

  • The GEP African Ancestry Network is observing #BlackHistoryMonth with an information series, focused on how the Bla… https://t.co/MXdyHe6kI8

  • What effective real estate practices can financial firms adopt to reduce carbon emissions and succeed at #ESG trans… https://t.co/xx7Zrh5yrs

  • We are delighted to announce @SubhashMakhija1, #GEP #CEO and Co-Founder, as the newest member of the CNBC CEO Counc… https://t.co/MNJXch4Vte

  • #Procurement leaders must develop a spend category management plan to power them through 2023 and beyond. #GEP’s Ry… https://t.co/5JxFw1UbsY

  • How can #automotive companies get the EV transition right? Electric vehicles may be the right option, but it’s not… https://t.co/WmGNCK6sFw

  • Conquering 2023 Supply Chain Setback - 31 Jan 2023 https://t.co/wg0MdRATfh

  • On the occasion of Republic Day in India, GEP Hyderabad held an art competition and GEPpers showed their creativity… https://t.co/NSHrXILbiv

  • We're proud to announce the extension of our #procurement services agreement with @Macys's Inc. to help drive… https://t.co/Hgn4uaGbW0

  • The #SupplyChain and #procurement #software market is in flux amid #MnA. If your software provider gets acquired, w… https://t.co/orQlKUZB4X

  • #SupplyChain #disruptions are a reality in today's unpredictable world. Learn how @gepsoftware has helped #SGS resp… https://t.co/jA2GnbWIBg

  • What steps can companies take to achieve #ESG goals effectively? Well, they can start with #procurement. Learn how… https://t.co/HGEfNyGdeD

  • #ElectricVehicles are a key part of the auto industry's plan to become #NetZero by 2050. But EVs aren't enough on t… https://t.co/YlEoys6vTA

  • Why did Asahi choose #GEP as their #procurement and #SupplyChain partner? Check out this video featuring Carmen Rad… https://t.co/RmstcfJXtm

  • GEPpers know how to have a good time! Check out a glimpse of our Winter Party at the GEP Prague office. We are hir… https://t.co/BqVK6XkpHv

  • #Inflation has dampened expectations for GDP growth and raised the risks of a #recession. What can #procurement lea… https://t.co/Hn1R5bxZXn

  • 4D seismic #technology is opening deep-sea #OilAndGas reserves for exploration, lowering costs and optimizing reser… https://t.co/Omq51vlEq7

© Copyright GEP 2022. All rights reserved. Terms of Use | Privacy Statement | Cookie Policy |   | Quality Policy | GEP Logo