The document presents an analysis of offshore billing rates from India and China, highlighting stability in rates during 2010 and early 2011, followed by an anticipated increase of 5%-8% due to growing demand. It discusses the various factors influencing rates, including vendor cost structures and competition, while also detailing specific rate data categorized by job level experience. The insights are intended for clients of Offshore Insights, providing contextualized information for billing rate dynamics in the offshore services market.

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