IT adopts the no-shore model, where employees' location doesn't matter

Topics IT Industry

Not just major IT firms, mid-tier players, too, are harnessing benefits from this model
The offshore-focused Indian IT outsourcing services industry is seeing an addition to its growing list of terms and expressions — “No shore”.

Industry experts say one of the biggest changes the pandemic has brought is the way the industry operates. While for clients it has led to increased outsourcing, they are no more worried about which shore the service providers are executing the project in — offshore, onshore or near-shore — because remote working has become the standard norm in the industry, giving rise to a “no shore” kind of model.

“We are now in the world of ‘no shore’,” said Thierry Delaporte, chief executive officer and managing director, Wipro. “The question is not so much whether you are based in an onshore or offshore (location). You need to be part of a single team and we need to leverage the scale we have in some countries like India.”

Large Indian IT players such as TCS, Infosys, and Wipro have allowed over 95 per cent of their workforce to work from home and stick to the proportion in the foreseeable feature. Keeping its benefits aside, companies are witnessing greater flexibility in terms of creating teams across geographies and creating conditions for more women to join the workforce.

Service providers are leveraging their global reach to get projects done through their remote workforce, either operating from home or any other location, in any of their global locations, based on their skillsets and expertise.

“As long as they have the talent, they are able to connect and deliver the project. Whether you are working from Sydney, New York, Chennai or Kolkata, it doesn’t matter because the net has become much wider in the form of a ‘talent cloud’,” said N Ganapathy Subramaniam, chief operating officer, TCS, India’s largest IT services firm.

“Our operating model is bringing together a team of talent across the globe with the right cost structure ... It is a multi-shoring model and a no-shore one. It is democratisation of the talent base,” Subramaniam added.

Not just major IT firms, mid-tier players, too, are harnessing benefits from this model.

“In the past, talent came to us. But the new model gives us access to talent wherever they are. The two biggest benefits would be access to better talent (for companies) and a significantly higher participation of women in the workforce over the next seven-eight years. Retaining women talent has been one of the biggest issues over the past 30 years,” said Sanjay Jalona, managing director and chief executive officer (CEO), L&T Infotech.

However, analysts flag downside risks in this. One is “uberisation” of the workforce where IT companies may no longer stay relevant. “The remote-working and gig-based model infrastructure always existed but no company moved towards it because it was difficult to police the delivery sufficiently. But if the Covid-19 situation continues, there is a disaggregation. There is also a possibility of employees directly working for the clients and IT firms as intermediaries may no longer be relevant,” said Sid Pai, founder of venture-capital firm Siana Capital and a longtime IT industry executive.

Peter Bendor-Samuel, founder and CEO of global IT outsourcing consultancy firm Everest Group, said: “The new work-from-home reality is changing the operating model for global services though it is not doing away with it.”

“In one way, it is lowering the cost of the offshoring model. It is also clear that the huge Indian talent market is well positioned to participate in parts of this new model though the incumbents will have to work hard to shift their operating models or they will be left behind,” he added.

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