Contrary to the initial discomfiture amongst Indian IT companies of a slowdown in outsourcing business, there is an emerging feeling now that the economic slump may actually help them in the short term as competing destinations may not be an option for risk-wary clients.

Published media reports indicated that customers of IT outsourcing work may seek out India over other offshore destinations, given their comfort factor with the Indian work culture and ethos. So, countries in Latin America and Southeast Asia may have to wait for the promised growth as clients may work with known vendors.

A report in the Hindu Business Line quoted industry experts to state that since the clients are getting increasingly risk wary, there is a chance that work would come to known destinations. It quoted Sudin Apte of Forrester Research as saying that such a move would benefit India IT firms by providing them time to analyze the slump and prepare for any after-effects.

The article quotes Infosys CEO Kris Gopalakrishnan as saying that offshoring IT projects to new destinations would include reviewing and auditing which would be an additional cost burden in view of the transaction costs. So, predictability is very crucial and customer comfort with Indian tech firms is very high globally, he said.

The newspaper quotes Tholons Consulting official Vinu Kartha as saying that clients would have to set aside fresh investments to start operations in a new destination, either by way of setting up a captive or engaging a third-party vendor. And this is a business challenge in terms of expenditure, he adds.

This could provide a breather for Indian IT firms for the next two to three quarters as clients are more comfortable with existing vendors though they caution that this is only a short-term phenomenon as in the long-term price factors would ensure that clients seek out new destinations for their IT outsourcing.