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Offshore Billing Rate Analysis | Offshire Insights

OffshoreInsights Research & Solutions Private Limited
OffshoreInsights Research & Solutions Private Limited
OffshoreInsights Research & Solutions Private LimitedPrincipal Analyst & CEO at OffshoreInsights Research & Solutions Private Limited

During 2010 and H1-2011 billing rates remained stable. However, from H2-2011, in light of growing demands, the rates increased by 5%-8%. Vendors juggle with multiple forces - tight economic situation, flat budgets, rising cost structures, increased competition and new initiatives to increase productivity value.

Offshore Billing Rate Analysis | Offshire Insights

1 of 18
Sudin Apte, CEO and Research Director
October, 2011
Goals for the presentation
• To provide Offshore Insights’ research and data about
  offshore billing rates – from India and China
• To put forward analysis of top trends in billing rates
  and why rates are changing the way they are
• To provide additional information about billing rates
  for special or high-end services and how those rates
  vary from typical application work
Offshore Billing Rate Analysis
              Premise                                Agenda
During 2010 and H1-2011 billing rates
remained stable. However, from H2 –        Research methodology and
2011, in light of growing demand, the      assumptions
rates increase by 5%-8%
Vendor cost structure – salaries, real     Offshore billing rate data –
estate, training for example – is also     India and China
rapidly increasing, especially in India.
But rising competition is not allowing
vendors to raise the billing rates         Qualitative assessment &
                                           offshore trends
Vendors juggle with multiple forces –
tight economic situation, flat budgets,
rising cost structures, increasing
                                           Discussions and Q&A
competition, and new initiatives to
increase productivity and value
Research Methodology
 Tapped into Offshore Insights’ on-going research of
  billing rates, cost structures and contract terms and
  negotiations

 Studied published data/financials on vendor web
  sites about offshore volume and offshore rates

 Conducted primary research to update the data
  • Client interviews
  • Vendor interviews

 Reviewed secondary/public domain information
  about foreign exchange fluctuations expected
Offshore Billing Rate Analysis | Offshire Insights
Offshore Billing Rate Data – In local Currency
INDIA (INR)
 Job level   Experience   Daily rate   Daily rate   Daily rate    % Growth % Growth
               bracket     CY 2010      CY 2011       2012       (‘10 to ‘11) (‘11 to ‘12)
Senior
Manager
Manager
Senior
               Restricted Access. Only for Offshore Insights Clients.
Consultant
Consultant
Junior

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Offshore Billing Rate Analysis | Offshire Insights

  • 1. Sudin Apte, CEO and Research Director October, 2011
  • 2. Goals for the presentation • To provide Offshore Insights’ research and data about offshore billing rates – from India and China • To put forward analysis of top trends in billing rates and why rates are changing the way they are • To provide additional information about billing rates for special or high-end services and how those rates vary from typical application work
  • 3. Offshore Billing Rate Analysis Premise Agenda During 2010 and H1-2011 billing rates remained stable. However, from H2 – Research methodology and 2011, in light of growing demand, the assumptions rates increase by 5%-8% Vendor cost structure – salaries, real Offshore billing rate data – estate, training for example – is also India and China rapidly increasing, especially in India. But rising competition is not allowing vendors to raise the billing rates Qualitative assessment & offshore trends Vendors juggle with multiple forces – tight economic situation, flat budgets, rising cost structures, increasing Discussions and Q&A competition, and new initiatives to increase productivity and value
  • 4. Research Methodology  Tapped into Offshore Insights’ on-going research of billing rates, cost structures and contract terms and negotiations  Studied published data/financials on vendor web sites about offshore volume and offshore rates  Conducted primary research to update the data • Client interviews • Vendor interviews  Reviewed secondary/public domain information about foreign exchange fluctuations expected
  • 6. Offshore Billing Rate Data – In local Currency INDIA (INR) Job level Experience Daily rate Daily rate Daily rate % Growth % Growth bracket CY 2010 CY 2011 2012 (‘10 to ‘11) (‘11 to ‘12) Senior Manager Manager Senior Restricted Access. Only for Offshore Insights Clients. Consultant Consultant Junior
  • 7. Offshore Billing Rate Data – Client view in Constant Currency (US$) - India Job level Experience Daily rate Daily rate Daily rate % Growth % Growth bracket CY 2010 CY 2011 2012 (‘10 to ‘11) (‘11 to ‘12) Senior Manager Manager Senior Restricted Access. Only for Offshore Insights Clients. Consultant Consultant Junior
  • 8. Offshore Billing Rate Data – In local Currency China (CNY) Job level Experience Daily rate Daily rate Daily rate % Growth % Growth bracket CY 2010 CY 2011 2012 (‘10 to ‘11) (‘11 to ‘12) Senior Manager Manager Senior Restricted Access. Only for Offshore Insights Clients. Consultant Consultant Junior
  • 9. Offshore Billing Rate Data – Client view in Constant Currency (US$) -China Job level Experience Daily rate Daily rate Daily rate % Growth % Growth bracket CY 2010 CY 2011 2012 (‘10 to ‘11) (‘11 to ‘12) Senior Manager Manager Senior Restricted Access. Only for Offshore Insights Clients. Consultant Consultant Junior
  • 10. Rate data additional information  Most vendors maintain US$ rate cards as basis as most clients are US based. Further, they hedge the foreign exchange to minimize the fluctuation losses and get predictability in local currency  The rates in tables are for typical work – Application development and support, infrastructure, typical package implementation and maintenance work.  Restricted Access. Only for Offshore Insights Clients.
  • 12. Top factors impacting the billing rates Restricted Access. Only for Offshore Insights Clients.
  • 13. Offshore Billing Rate Dynamics Factors allowing vendors to cut rates Billing Rates Net impact Factors pushing costs up
  • 14. Factors pushing costs up Restricted Access. Only for Offshore Insights Clients.
  • 15. Factors allowing vendors to cut costs Restricted Access. Only for Offshore Insights Clients.
  • 16. Net effect on billing rate behaviour  Vendor total costs up by 10%  They absorb part of this by settling for lower profitability  Top vendors get selective in type of work and volume  Billing rates go up by 3% - 5% In local currency
  • 18. Want to know more? Email – shashank@offshoreinsights.com Phone - +91 20 24549851/52 Research Garage, 12 Shailesh Society, Ganesh Nagar, Pune – 411 052, INDIA