Against the popular belief that the large customer companies choose only the bigger service providers, Continental Group, the world’s fourth largest tire manufacturer, set a different precedent. They were not afraid to pull out of a bad deal with IBM, which was one of the biggest outsourcing deals in Europe in 1995. They pulled out of the $1 billion deal because “the cost was too high, the quality low, and the technology outdated,” says Paul Schwefer, VP and CIO, Continental Group. Continental chose Ideafarms for taking up niche services for the company. Why? “An IBM or an HP will not understand our business culture,” says Schwefer. “Moreover, they cannot take quick decisions. I am looking for agility.”

Agrees Malhotra, “Most business heads are technophobic and the IT guys don’t want to know business. We bridge this gap by being bilingual. Our people understand what business guys are saying and, therefore, what technology would be required to translate that into action.”

Boutique firms have less satisfied employees: Like the big providers, the niche ones are not immune to attrition. Yet, employees are their most important assets — the loss of one individual might mean the loss of a customer to them. So they spend a lot of time in hiring the best talent and focusing on knowledge-management and employee-retention practices.

Small is Here to Stay
A popular perception is that the niche firms don’t have the fuel that will last them for very long. But these providers themselves believe that they are here to make their mark.

“For the next two to three years, the big players will be occupying center stage,” says Pradeep Rathinam, President, North America, Aditi Technologies, a boutique firm specializing in product development, and high-end architecture development and maintenance. “But as individuals keep attaining a great degree of expertise, some big firms will face the problems of churn, as some already are. Employees would increasingly seek exposure and growth. That’s where boutiques will catch on in hunting and targeting talent from the big firms.”

“Small companies are focused on selected domains and, therefore, downtime for ramping up to the required knowledge level is minimal,” adds Menon.

IT goes without second thoughts that the decision to choose a particular boutique provider must always be taken very cautiously. One must always do necessary background research and be sure about the credentials of the company, else they might end up being cheated. The market is full of those fraudulent setups that call themselves IT firms, who are known to run away with your money, abandoning the contract.