Bangalore: Union IT and Communication Secretary Rajeeva Ratna Shah on June 12 cautioned the Indian Information Technology Enabled Services (ITES) industry not to indulge in cut throat competition on the price front to bag outsourcing contracts from its customers.

"The value proposition of quality should not be diluted due to lower prices and negotiations with customers should be such that you do not "cut the throat" of your competitors," Shah told over 600 industry delegates at the inaugural of the "NASSCOM ITES BPO Strategy Summit 2003".

"Very often we have seen competitiveness is lost when you at costs and eventually the companies lose their business," he said.

Stating that the Indian ITES industry had globally established itself for "price and quality", Shah said it was paradox that the industry, which is seeing more and more outsourcing from India, is also facing pricing pressures.

Terming the reason for pricing pressures was due to lack of standardisation, he said, the BPO industry should replicate the IT services industry in attaining standardisation through certification.

"The software industry has achieved this with the SEI-CMM level four certificatio and there is an emerging standard in BPO called ESCM which you could adopt," Shah said.

He said ensuring standardisation would help ITES firms to command on the price front due to quality processes.

PTI