IT Service companies moving up the value chain

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Indian IT-service company has evolved since last two decades and has gone through many high and lows on periodic basis due to cyclical global crisis primarily in the United states of America (the market which generates 85% of the IT sector revenue...
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Indian IT-service company has evolved since last two decades and has gone through many high and lows on periodic basis due to cyclical global crisis primarily in the United states of America (the market which generates 85% of the IT sector revenue). Till late 90's the industry was engaged in projects which were primarily maintenance projects and essentially catering to the lower end of the outsourcing value chain. On one hand the industry has been matured over a period of time and at the same time it has also reached it's saturation point . This sector has been witnessing tremendous pressure on the margin and the profitability . The IT sector is also witnessing cost pressure due to exponential rise in the labor cost in one hand and tightening IT budget of fortune 500 companies. The sector has realized that the only way to survive and sustain would be to climb and cater to the higher end of the outsourcing value chain. From mere technology solution provider the IT sector has geared up to position itself as the Business Solution provider and during this transition the vital requirements of the industry has been to acquire and build domain expertise on respective business verticals e.g. in order to clinch the outsourcing projects from say Insurance sector the expected expertise from the IT-Service company to have the in depth domain knowledge of the insurance sector. In order to move up the value chain, IT sector has started building up a strong consulting wing which works in tandem with Business development team and prepare business proposition to the CXO community.

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