Industry news

Readers, it has finally happened. The Round-Up has now got sufficient evidence to show it might not be the infallible journalistic entity you all thought it was. I must apologise, profusely, for an inaccuracy that was published in last week’s news Round-Up. Thanks to Brian Daly at Unisys, we at sourcingfocus.com are able to right that wrong. When the Round-Up wrote about the Landis+Gyr ITO contract with Unisys last week, I also reported about 1,300 jobs that were cut on Monday. This, however, is where the inaccuracy lies. Mr Daly aptly notified sourcingfocus.com that the job loses had indeed happened five months before, in December, and not that Monday. For this inaccuracy, the Round-Up is extremely sorry. At sourcingfocus.com we appreciate, and in some cases, rely on our reader’s comments and input. After all, as the Round-Up has only recently recognised, no one is perfect.

Apart from the woe of recognising my fallibility, I have been consumed this week with interest in Research and Marketing’s recent report, ‘e-learning Outsourcing 2009: Advantage India’. It seems the outsourcing community can now add another string to its bow. The report explains how, in recent times, corporations, educational institutions and governments have started re-examining the way training and education are imparted. e-learning has now become a crucial part of their strategy to deliver knowledge. But maintaining e-learning systems within the organisation equals more costs. The solution? Outsource, and don’t look back – more international organisations, realising cost advantages, are moving from dealing with local e-learning service providers to directly approaching Indian companies. And yes, surprise, surprise this report does highlight India’s capabilities in e-learning outsourcing.

According to the article, revenues from the Indian e-learning offshoring industry stand at approximately $341 million at the end of calendar year 2008. While the economic recession will impact the growth in the industry for the next 6-8 quarters, the market will recoup and grow much faster, until 2012. The report estimates the market size will reach $603 million by the end of calendar year 2012. There is just no stopping them!

We all know that India is more than proficient in the outsourcing sphere. This report highlights just another example of this. It also seems the recent elections in the country will serve to increase India’s economic growth. As Hamish McRae wrote in the Independent this week, ‘It won’t just be Land Rover and Jaguar that will be rescued by an Indian company; the direct influence of its economic power will go far beyond the odd takeover’.

That said this weeks sourcingfocus.com’s news has seemed to state otherwise. A.T Kearny, a global management consultancy firm, has released a paper that asserts that deteriorating cost advantages and improved labour quality are driving a dramatic shift in the geography of offshoring.

It’s certainly a confusing world out there. It just shows that you need a great news source like sourcingfocus.com to make sense of it all (last weeks’ error aside).

While India, China and Malaysia retain the top three spots they’ve occupied since the inaugural GSLI in 2004, a fundamental shift in the index has taken place as once strong Central European countries have yielded ground to countries in Asia, the Middle East and North Africa.

The GSLI analyses and ranks the top 50 countries worldwide for locating outsourcing activities, including IT services and support, contact centres and back-office support. Each country’s score is composed of a weighted combination of relative scores on 43 measurements, which are grouped into three categories: financial attractiveness, people and skills availability and business environment.

My memory does serve me well enough to remember that last week, I too was hinting at the demise of the Indian outsourcing empire. Not sure where I stand now…all those mixed messages!

I think sourcingfocus.com has confused us all enough for one week. On to more concrete news items. MTV has signed up HCL to be its digital platform development partner.

The partnership aims to help MTVN brands manage the technology behind its digital content creation, media asset management, community networking and cross-brand programming. No confusion there then.

Another new contract has come in the shape of Unisys and TravelSky. TravelSky, a provider of information technology solutions for China’s air travel and tourism industry, has extended its licences with Unisys China for Unisys server technology through to December 2011.

TravelSky Vice President, Mr. Rong Gong, commented, “This supports our aim to make TravelSky one of the most reliable travel systems in the world while satisfying the ever-increasing growth of China’s aviation market.”

Let’s just hope those are green electric planes for all our sakes.

Amid the latest ‘dramatic shift in the shape of global offshoring’ that outsourcing advisors are all too ready to predict, it may be time for a rest. A little time to mull it all over, thank goodness it’s the weekend…

For all its rapid developments in other aspects of business, China has never really been perceived as one of the most attractive locations to which core business operations could be outsourced. This could be about to change according to sourcing industry commentators, KPMG.

In launching their report entitled A new dawn: China’s emerging role in global outsourcing, KPMG’s Advisory practice suggests that China is no longer the 'quiet man' of the outsourcing industry.

Over recent years, China has made major strides in laying the groundwork for a diverse and successful outsourcing market. Central and local authorities alike have demonstrated a quiet determination to promote IT and other business services industries in locations across the country, the report says. The quiet progress which has marked the early development of the Chinese outsourcing industry is about to catapult it to the forefront of the global outsourcing market according to the consultancy firm.

Edge Zarrella, Global Head of IT Advisory and a partner in the Hong Kong firm, explained: “China has been quietly asserting its position in the global outsourcing industry, attracting little in the way of fanfare. Having conceded a significant head start to the now established outsourcing centres like India, it suffered somewhat from the trend for multinationals to place all of their outsourcing work in one location.

“Two things have changed recently. Firstly, the plan enacted by the Chinese government in 2006 to develop 10 internationally competitive outsourcing cities is bearing fruit. Secondly, there has been a realization amongst many major corporates that they can combine the complementary strengths of different outsourcing markets to meet the increasingly complex challenges which they face. This is a major — and timely — boost for the Chinese outsourcing industry as it means companies are no longer thinking of, say, China or India. Now they’re thinking about China and India.

“It’s for these two reasons that I believe that China is not one to keep an eye on in the future; it’s the one to keep an eye on now. China’s days as the quiet man of the industry, gently ambling along with the pack, are over.”

The report suggests that strategic decisions based on a choice of one or more outsourcing destinations require a complex series of evaluations and, ultimately, trade-offs. No single destination can offer everything on the checklist. Therefore, companies are now combining the complementary strengths of several markets. The result is more robust and flexible than relying on a single supplier.

However, while many companies are showing greater appetite for outsourcing diversification, they still want the reassurance of dealing with companies with global perspective and experience. This is where the Chinese government’s 1000–100–10 plan comes into play.

Launched in 2006 with funding in excess of US$1bn, the plan aimed to establish 10 Chinese cities as global outsourcing bases (subsequently increased to 20 cities in January 2009), to attract 100 international corporates to outsource to these locations and to develop 1000 Chinese outsourcing vendors to service this new client base. It was a breathtakingly ambitious plan but the results can be seen with Dalian, Shanghai and Beijing already ranked in the top ten most attractive cities for outsourcing It is reckoned that Shanghai could even challenge Bangalore for the top spot within two years, with Dalian and Beijing thought likely to make it into the top five.

Ning Wright, KPMG’s China Sourcing Advisory Leader and a partner in the Chinese firm, commented: “On current reckoning, China may have only around ten percent of the global outsourcing market. It also still faces the inevitable concerns around intellectual property protection — although huge strides forward have been made in this area — and how it can ride out the impact of the economic crisis. In addition, there is a growing clamour for a professional trade body to be formed to articulate the industry’s needs — just as NASSCOM does for India. However, you cannot fail to be impressed by the vision which China is demonstrating in building a potentially world-class outsourcing industry and the incredible pace at which it is turning that vision into reality.”

The spring 2009 KPMG Business Outlook Survey, which surveys around 1,400 service sector firms across the BRIC region (Brazil, Russia, India and China), has signaled a rise in business sentiment among BRIC service providers.

The net balance of firms forecasting growth of activity over the next twelve months has risen from +33.8 to +43.5. Optimism is highest in Brazil, while confidence has also rebounded strongly in Russia and India. However, sentiment in China has eased a little compared with the previous survey.

With activity and new business levels expected to increase during the next twelve months, BRIC service providers are set to step up their recruitment accordingly. The net balance for employment has improved from +17.1 to +22.5. Confidence regarding staffing levels is up in all four countries, with Brazilian firms particularly confident of an increase.

Ian Gomes, Chairman of KPMG's High Growth Markets Practice, commented, “The findings perhaps suggest that the BRIC nations can achieve reasonable growth rates this year, even as developed economies are set to contract. Clearly the extent to which the big emerging markets can take up the slack from the US, Europe and Japan will be a key determinant of global economic prospects.”

An extended summary of the report and information on the methodology can be found here

Ferrosan, an international consumer and healthcare company based in Denmark, and IBM have signed a seven-year IT infrastructure management contract.

Ferrosan has approximately 800 employees and operates in more than 70 countries, with more than 90% of its revenue generated outside Denmark. Under the terms of the agreement, IBM will provide Ferrosan with a private cloud infrastructure, comprising of virtual and physical IBM Power Systems and System x servers, associated software, network, storage and back-up services. Additionally, a Software Platform Management Services solution will be included for the majority of Ferrosan's 800 employees.

In the past, IT operations were managed separately at each Ferrosan location. The IT operation has now been centralised at IBM's Copenhagen Campus. The contract is an extension of the existing outsourcing agreement signed in 2006.

"We are very pleased to expand our collaboration with IBM. It is crucial for Ferrosan to have a solid partner manage our IT infrastructure. This agreement enables us to work closely with IBM to design the best possible solution for Ferrosan's organization; a solution that matches our goals and priorities perfectly. The agreement also enables Ferrosan to focus on business development and value-creating solutions based on IBM's solid IT foundation. Ferrosan looks forward to continuing the good collaboration with IBM," commented Frederik Boettger, Director of IT at Ferrosan.

MTV Networks (MTVN), creators of content for entertainment, has entered into an outsourcing services engagement with HCL Technologies Ltd.

The partnership aims to help MTVN brands in manage the technology behind its digital content creation, media asset management, community networking and cross-brand programming. HCL will work with Viacom's strategic and digital platform development team to set-up cross-brand initiatives and develop good practices in processes and technology.

The platforms include Media Player Development, Sites development, Social Networking Platform development, Games Development, Application and Data Platforms Support and development.

The work will be delivered offshore using HCL’s Chennai development centre. User Interface Design will be supported from Noida in India. "HCL's expertise in the media space will be critical as we continue to enhance and improve the efficiency of our digital platform infrastructure," said Joe Simon, Senior Vice President and CIO of Viacom.

HCL has also committed to join MTVN in building a Media Centre for MTV Networks which would be utilised by MTVN for mutually agreed upon media products development.

Outsourcing of some or all payroll sub-processes in two or more countries is an increasing trend for large multinational companies, according to a new study by the Everest Research Institute. Among the buyers of outsourced payroll solutions, 44 percent of buyers took a global approach during the 2007-2008 timeframe analysed by the Institute as compared to just 35 percent from 2003 to 2006.

Buyers are achieving 10-20 percent direct cost savings and, in some cases, savings of more than 30 percent, according to the Institute’s study, HRO Market Update: Multi-Country Payroll Outsourcing (MCPO): A New Approach to an Old Problem. While manufacturing continues to remain the leading adopter of MCPO, the financial services sector remains the second leading adopter despite a slowdown in decision making processes due to the economic crisis.

“MCPO enables North America-headquartered companies a strategic option in managing non-North American payroll requirements,” said Katrina Menzigian, Vice President, Everest Research Institute. “Historically, multiple challenges restricted MCPO adoption, but adoption is rising due to increased maturity of suppliers, availability of innovative technology solutions and multiple delivery options.”

The study analyses MCPO across dimensions that include market overview and key business drivers, buyer adoption, solution and transaction characteristics and supplier landscape.

Other findings from the report include:

• 66 percent of MCPO deals cover four or more buyer countries

• Companies find MCPO an especially attractive option for addressing issues of complexity in the Asia Pacific and EMEA regions

• Three dominant technology models prevail, with 76 percent of engagements leveraging an integrated hybrid technology solution

• Most buyers prefer variable pricing models and phased-in implementation in contracts

• Supplier ‘co-opetition’* is prevalent throughout the market, with partnerships forming key components of solution strategies

• Only a few suppliers have the capability to cover a high number of countries in each region

• Since 2007, offshore suppliers that combine ERP capabilities with a global sourcing delivery have entered the market – and more suppliers are expected to emerge this year

“Suppliers must continue to offer MCPO solutions that leverage buyers’ existing investments and can be implemented quickly to meet companies’ needs to cut costs in the current economy,” said Rajesh Ranjan, Research Director, HRO. “Partnerships are important to suppliers that seek to strengthen and broaden their service offerings, which will be important as new suppliers enter the market and compete for market share.”

Sourcingfocus.com readers can access an extract and make enquiries into purchasing the report here: HRO Market Update: Multi-Country Payroll Outsourcing: A New Approach to an Old Problem,

Deteriorating cost advantages and improved labour quality are driving a dramatic shift in the geography of offshoring according to the latest edition of global management consulting firm A.T. Kearney’s Global Services Location Index (GSLI), a ranking of the most attractive offshoring destinations.

While India, China and Malaysia retain the top three spots they’ve occupied since the inaugural GSLI in 2004, a fundamental shift in the index has taken place as once strong Central European countries have yielded ground to countries in Asia, the Middle East and North Africa.

The GSLI analyses and ranks the top 50 countries worldwide for locating outsourcing activities, including IT services and support, contact centres and back-office support. Each country’s score is composed of a weighted combination of relative scores on 43 measurements, which are grouped into three categories: financial attractiveness, people and skills availability and business environment.

Established Central European countries including Poland, the Czech Republic, Hungary and Slovakia, once among the premier offshoring destinations for Western Europe companies, have fallen significantly due to a rapid increase in costs driven by both wage inflation and currency appreciation against the dollar. Meanwhile, low-cost countries in Southeast Asia and the Middle East made significant gains this year as the quality and availability of their labour forces improved. Egypt, Jordan and Vietnam ranked in the GSLI’s top 10 for the first time ever.

“While cost remains a major driver in decisions about where to outsource, the quality of the labour pool is gaining importance as companies view the labour market through a global lens driven by talent shortages at home, particularly in higher, value-added functions,” said Norbert Jorek, a partner with A.T. Kearney and managing director of the firm’s Global Business Policy Council. “In response, governments all over the world are investing in the human capital demanded by the offshoring industry.”

The complete results of this year’s Index are provided below. A more detailed analysis and information on regional performance can be found at www.atkearney.com.

Highlights from this year’s GSLI include:

• The Middle East and North Africa is emerging as a key offshoring region because of its large, well educated population and its proximity to Europe. In addition to Egypt and Jordan, ranked at sixth and ninth, respectively, Tunisia (17th), United Arab Emirates (29th) and Morocco (30th) all rank among in the GSLI’s top 30 countries. “The Middle East and Africa area has the potential to redraw the offshoring map and in the process bring much needed opportunities for its large, underemployed educated class,” said Johan Gott, project manager for the Global Services Location Index.

• Saharan Africa also showed strength. Ghana ranked 15th, Mauritius 25th, Senegal 26th and South Africa 39th.

• Countries in Latin America and the Caribbean continue to capitalize on their proximity to the United States as nearshore destinations. Chile placed highest among countries from the region, ranking 8th on the strength of its political stability and favourable business environment. Other strong performers in the region include Mexico (11th), Brazil (12th) and Jamaica, which rose 11 places to rank 23rd.

• India, China and Malaysia continue to lead the index by a wide margin through a unique combination of high people skills, favourable business environment and low cost. In particular, India has remained at the forefront of the outsourcing industry and actually has become an enabler for industry growth through expansion of Indian offshoring firms into other countries.

• The United States, as represented by the onshoring potential of smaller “tier II” cities such as San Antonio, rose to 14th in the rankings due to the financial benefits of a falling dollar. The country is the leader in the people skills category and the combination of rising unemployment and political pressure to create jobs is increasing interest in onshoring possibilities among smaller inland locations. Similar trends are evident in the UK, France and Germany, all of which also rose in the GSLI.

• While the global financial crisis has slowed recent offshoring moves, the percentage of companies’ staff offshore may very well increase as a result of the crisis. Layoffs at home are not translating to layoffs among offshore workers as companies seek to maintain service but reduce costs. Additionally, offshore facilities tend to be more efficient because they are newer and lack years of inefficiencies often built up in onshore facilities.

“The dynamics of global offshoring are clearly shifting as companies re-evaluate the political risks, labour arbitrage and skill requirements in the context of the likely aftermath of the global economic crisis,” said Paul A. Laudicina, A.T. Kearney chairman and managing officer. “Risk management will take on new importance to protect global service delivery from interruption and ensure capabilities are strategically dispersed rather than concentrated in a few cost-effective locations.”

Global Services Location Index 2009

(number in parenthesis indicates ranking in 2007 GSLI)

1. India (position in 2007 GSLI: 1)

2. China (2)

3. Malaysia (3)

4. Thailand (4)

5. Indonesia(6)

6. Egypt (13)

7. Philippines (8)

8. Chile (7)

9. Jordan (14)

10. Vietnam (19)

11. Mexico (10)

12. Brazil (5)

13. Bulgaria (9)

14. United States (Tier II)* (21)

15. Ghana (27)

16. Sri Lanka (29)

17. Tunisia (26)

18. Estonia (15)

19. Romania (33)

20. Pakistan (30)

21. Lithuania (28)

22. Latvia (17)

23. Costa Rica (34)

24. Jamaica (32)

25. Mauritius (25) 26. Senegal (39)

27. Argentina (23)

28. Canada (35)

29. United Arab Emirates (20)

30. Morocco (36)

31. United Kingdom (Tier II)* (42)

32. Czech Republic (16)

33. Russia (37)

34. Germany (Tier II)* (40)

35. Singapore (11)

36. Uruguay (22)

37. Hungary (24)

38. Poland (18)

39. South Africa (31)

40. Slovakia (12)

41. France (Tier II)* (48)

42. Ukraine (47)

43. Panama (41)

44. Turkey (49)

45. Spain (43)

46. New Zealand (44)

47. Australia (45)

48. Ireland (50)

49. Israel (38)

50. Portugal (46)

*Based on lower-cost locations in each country: San Antonio (U.S.), Belfast (UK), Leipzig (Germany) and Marseilles (France).

ABB UK has operations in over 12 main locations, with around 2,300 employees. Previously, the company’s 14 UK business units used eight different ERP systems, built up through acquisitions and local implementations over a 20-year period.

TCS has migrated ABB UK’s Finance, Human Resources and Operations functions onto a single SAP ERP system. The aim of this migration is for greater transparency that will enable a granular view of consolidated information and create quick access to accurate data about all stock, or all business with one customer or supplier. ABB has also selected TCS to provide ongoing SAP support services to ensure the smooth running of the system.

“Harmonizing these processes has not only given us faster access to information, but stronger collaboration and sharing of best practice across divisions and business units. Overall this means it has given us greater agility, alongside the obvious cost-savings,” said Bill McLaughlin, Chief Financial Officer, ABB UK and Ireland.

According to a recent report UK businesses are taking six times as long as their US counterparts to react to the dramatic changes in the current market. This situation is largely due to the UK’s complex and time consuming employment laws, and is forcing UK businesses to respond to resourcing requirements a lot slower than they ought to as once someone is on the payroll, it becomes very difficult to let them go. The lure of lower IT costs is directing business owners towards considering a managed technology service over an in-house function, which with the right supplier can be a very cost effective move.

But is a managed service really right for the business? Cost is a key consideration in any tactical operational change but organisations must not only address the business plan as a reaction to the short-term macroeconomic climate, but must also consider how best to take advantage of the future market recovery.

An effective managed service offers the chance to reduce costs, improve operational performance and stability, add agility and mitigate risk. But achieving a managed service that delivers value requires some tough questions both internally and of potential suppliers, argues Scott Nursten, Managing Director, s2s.

As the effects of the recession are felt across every part of the UK economy, organisations are increasingly looking for ways to cut costs fast. For many organisations this has already resulted in a reduced in-house IT head count and attention is now being turned towards IT systems and services.

In addition to staff costs, organisations are questioning the energy footprint, data centre and office space requirements of internal IT resources. With shrinking revenue and a trend towards lower staff numbers across the board, fixed and inflexible IT costs which offer limited potential represent a significant business risk. This doesn’t have to be the case. Joining forces with the right supplier can offer controlled costs with the necessary flexibility to mitigate risk in the short term and drive business transformation when good times return.

But every organisation is now also aware of the risks associated with under-funded IT systems and the implications for stability, productivity and customer service. So while it is no surprise that increasing numbers are looking to assess the value of a managed IT service, the near universal focus on a cost-based decision is raising alarm bells.

Basing a key operational decision such as outsourcing IT solely on cost is not sound business practice. Not only are organisations potentially putting untenable pressure on suppliers, which is likely to lead to reduced levels of service and increased risk, but they are severely constraining their ability to react to the upturn as and when it arrives.

Without a doubt, a well run, efficient and effective managed service can deliver far more than cost savings. The expertise of a good managed service provider will deliver more from existing infrastructure allowing the business to ‘sweat the asset’ and improve the return from capital and operational expenditure.

Leveraging economies of scale, the Service Level Agreement (SLA) based contract should offer 24x7 UK based support at a level that completely eclipses the potential of an in-house team in terms of cost efficiency. It should also be based on a proactive strategy that means once a problem occurs, it either won’t happen again or the time to resolution decreases with every occurrence.

Critically, by opting for a third party resource an organisation can avoid the risk of being virtually held to ransom by experienced in-house staff for additional pay and benefits. The IT department is freed from the administrative overhead of employment regulations and resourcing issues and can focus on its primary purpose and objective: providing efficient platforms for business operations.

If the deal is structured correctly, a managed service should offer a company the agility to flex up and down as required. In the current volatile market, the ability to reduce IT costs or increase service level delivery in line with business performance is a compelling argument. Add to this the benefit of aligning IT services with the business’ security policy, ensuring compliance and data protection in this challenging climate and providing a critical edge in an increasingly competitive market place, and the true value that the right managed services provider can bring to an organisation becomes clear.

Yet a managed service is not the right solution for every organisation – however tight the situation may be today.

A key consideration is the level of talent and experience that exists within the IT team. While cutting costs is a primary goal today, business decision makers need to consider which actions best support the medium and long term key business strategies. Only through a broader and more holistic approach of both financial and strategic implications/drivers can the business arrive at the right decision.

When making any radical operational change such as outsourcing the IT function it is essential to understand the business case. What is the medium-term strategy? Does that include a new product or service launch that will require considerable IT input and support? Would a managed services provider be in a position to provide that level of insight? Indeed, would the organisation be happy to even share that strategic vision with a third party? And, critically, what is the risk associated with in-house IT versus a managed service?

If the business case stacks up, the pressure is now on to get the right contract to support the organisation not just through this recession but into the future. Check the contract! There are far too many managed services contracts that include massive hidden costs that can result in the overall deal costing up to three times the expected fee. The majority of contracts can also not be flexed up or down without incurring huge penalties, creating the same inflexible cost model as the in-house resource.

Furthermore the majority of contracts are designed from a legal rather than service level perspective. Understanding the business requirements and determining the right SLA is key – from the coverage required to the location of the support staff – if the overnight cover is in India, will the problem really be resolved by 8am?

And, of course, if a key objective is to mitigate risk, it is essential to undertake rigorous due diligence on potential suppliers. In this market there are clear signs that some organisations are struggling to keep afloat. In their bid to raise finance, many are looking to cut corners and are failing to focus attention on the provision of service to customers.

Before entering into any new contract, an organisation must be tough: verify the level of cash reserves, check the number and qualifications of staff today – and how that figure compares to 12 months ago. As an example, those providers working primarily in the finance sector may have genuine reasons for headcount reduction but they should be open to such questions.

A good provider should also be innovative as well as transparent. Costs today are an obvious driver and organisations should offer not only contracts that flex up and down in line with business needs but also newly designed services that offer a lower level of service, with less reporting, for example, to provide additional customer choice.

In a recession there is a very understandable temptation to look only at the cost aspect. But while that may help the business weather the storm in the short-term there is so much more to consider if an organisation is to determine whether or not a managed service is the right strategy.

Will a managed service deliver return on investment? Will the company be brave enough to outsource all IT functions to a third party, or will it opt to keep a couple of key staff ‘just in case’ – a move that may reduce the cost benefits? And has the organisation really assessed its business needs? Setting expectations in terms of up time, resolution time and business goals is key before, not during or after, discussions with potential providers.

It is only by undertaking a thorough price versus value comparison and assessing just how a managed service will affect the business when the economy improves that an organisation can make the right decision and, critically, opt for a provider that can actually deliver value to the business over the next few years, not just the next couple of months.

It's finally over. After four weeks of polling, with 6.5 million staff deployed to collect the votes of some 714 million eligible participants across 543 constituencies, the Indian general election finally reached its conclusion last weekend, with the Indian National Congress (INC) party declared the decisive victor.

It's now time for new prime minister Manmohan Singh to deliver on his promises - so what is this likely to mean for India's IT outsourcing industry?

In the short-term, the election result has already been good news. The Indian stock market leapt 17% on Monday, and many of the key beneficiaries in early trading were familiar names in the outsourcing world:

Infosys (INFY) up $4.15, or 10%, to $36.17

Cognizant (CTSH) up $1.06, or 4.1%, to $26.82

Wipro (WIT) up $1.22, or 11.4%, to $11.91

Over the longer term, the outlook is less clear. Certainly, business leaders have broadly welcomed the new government as one strong enough to deliver economic reform and perhaps avoid the internecine struggles that have hampered previous administrations. It's also felt that the INC is unlikely to turn its back on one of the brightest spots in the Indian economy. But nor have business leaders been slow to remind the Congress party of its responsibilities to the high-tech sector.

A case in point: in an official statement released on Monday, NASSCOM (the country's trade body for software and IT service providers) "welcomes the results of the election, which are indicative of a stable government at the centre". In the current global economic environment, it continues, "it is important that India has a stable and progressive political environment that can focus on long-term policies for the sustainable development of the country, even as it takes decisive steps to immediately put the economy back on a high-growth trajectory."

But the statement also goes on to propose a range of measures it believes the government should prioritise, including the extension of tax benefits and other fiscal incentives to the high-tech industry.

Similarly, Dr Ganesh Natarajan, CEO of Zensar Technologies, shared with me his thoughts on how the government can help companies like his. “Presuming the new government to be a stronger one, it will need to work on three important key areas to give relief to IT professionals," he says.

First, Software Technology Parks of India (STPI) facilities should be treated on a par with the country's Special Economic Zones (SEZs), with the same benefits and advantages extended to the companies that reside there, he says.

Second, the government must focus on the education and development of skilled labour. It's an area, he says, where many private-sector companies are interested in participating with the government. In particular, 'finishing schools' for would-be recruits are "the need of the hour", he says.

Third, the new administration must invest in infrastructure projects that will boost India's high-tech industry, according to Dr Ganesh. "The benefits will then percolate to various other parts of society," he says.

It's unlikely that the government will ignore such voices. After all, there are now 5,000 IT software and services companies at work in India, according to NASSCOM. Of these, some 60 per cent are homegrown players. They will expect to be heard - and will expect a robust response that reaps tangible results, as well.