Western Companies Avoid Outsourcing in India

More and more foreign companies are seeking out Bulgarian IT firms to act as partners to help them win government projects. This was announced by Andrey Bachvarov, Business Development partner at Sciant.

“We have been approached by several foreign companies from Italy, Germany and the UK who need business partners to score contracts in EU government projects,” Bachvarov said.

There are between two to four IT tenders announced by the Bulgarian government every month with values ranging from 500 to a million EU.

But the way the EU finance is structured, it is impossible for a Bulgarian company to get it by themselves, or for a foreign company to qualify without a Bulgarian partner, he added.

Bachvarov said that that was not the only reason why Bulgaria has been attracting Western European investors.

A recent report from Forrester Research says that Indian companies’ profits are shrinking because many of them expanded too fast.

According to Forrester analyst Stephanie Moore, one of the biggest outsourcing companies, Tata Consultancy Services, saw its net profit decline 34 per cent last year. Another company to suffer was Infosys, which had weak fourth quarter growth and low 2006 full-year guidance had worried investors.

The report says that buyers need to beware of the dangers that this growth represents for them. These include poor infrastructure, communications and a developing skills shortage.

One of the areas that customers are starting to report is poor services from Indian outsourcers who are unable to keep up with demands being placed on them.

According to Bachvarov the report is good news for Bulgarian companies.

“India has been the traditional place for English speaking countries to outsource their IT. However with serious concerns on what will happen to businesses which outsource there and Eastern Europe fast being identified as having much more innovative developers, it is likely that more IT business will come Bulgaria’s way”, Bachvarov said.