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Europe’s reluctance to send information technology and other business processing work to India might be changing, based on recent financial results from companies that specialize in handling “IT and business process outsourcing” work. It looks like this is a trend that will last more than a quarter.
Many European companies have shied away from sending work overseas, unlike American firms that jumped in feet first, seeking to cut IT costs by as much as 70 percent despite the barrier between two kinds of English. Add to that countries such as Germany and France, where the divide is between two languages altogether, and outsourcing faces a larger challenge.
Big companies that deal with IT and business process work have found that establishing a beachhead near the client seems to make a difference. By hiring small numbers of local consultants, they can send most of their work to Indian offices while presenting familiar images and voices.
U.S.-based Cognizant, which has about 75 percent of its staff in India, grew European revenue more than 7 percent quarter on quarter for the two consecutive quarters that ended Dec. 31. Cognizant provides data management services to French drugmaker Sanofi SA and manages computer systems at Dutch financial services company Rabobank N.A. Other clients include AstraZeneca Plc and Philips Electronics.