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November 17, 2004 MIS 680 International HR

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  • 1. November 17, 2004 MIS 680 International HR BRYAN HARGREAVES JASON AUSTIN JONATHAN MUEKE KERRY OLIVER SRIRAM KOTHANDARAMAN IT DESTINATION OF THE WORLD
  • 2. Agenda
    • Geography
    • Demographics
    • Government
    • Culture
    • Economy
    • IT Industry
    • Company Showcase
    • Issues
    • Summary
    • Vs Pakistan
    • Questions
  • 3. Geography
  • 4. Geography
    • 5,000 year old civilization
    • 325 languages spoken – 1,652 dialects
    • 18 official languages
    • 29 states, 5 union territories
    • 3.28 million sq. kilometers - Area
    • 7,516 kilometers - Coastline
    • 1,000,000,000 people in 2000
    • Political Map of India
  • 5. Geography
    • 2.4% of the world's land area, support over 15% of the world's population
    • Over 30% of Indians younger than 15 years
    • More than 70% live in more than 550,000 villages
    • Remainder in more than 200 towns and cities
  • 6. Demographics
    • Age structure
        • 0-14 years: 32.2%
        • 15-64 years: 63%
        • 65 years and over: 4.8%
    • Religions
        • Hindu 80%
        • Muslim 13.4%
        • Christian 2.3%
        • Sikh 1.9%
        • Others 2.5%
    • Sex ratio
        • 1.07 male(s)/female
  • 7. Factors that Influence the IT Outsourcing Environment Level of Economic Growth Political System Culture IT Outsource Readiness IT Outsourcing Environment
  • 8. Government
    • Sovereign, Socialist, Secular, Democratic Republic
    • Form of government
      • Parliamentary, based on universal adult franchise
    • Legislature
      • Parliament, consists of President and the two Houses, known as Rajya Sabha (Council of States) and Lok Sabha (House of the People )
    • Executive
      • Consists of President, Vice-President and Council of Ministers led by the Prime Minister
    • Judiciary
      • Independent of executive
  • 9. Government
    • Constitution
      • Adopted on 26 November 1949 and came into force on 26 January 1950
    • Federal Government
      • President is the constitutional head of Executive of the Union
      • Real executive power vests in a Council of Ministers with the Prime Minister as head
      • The Council of Ministers is collectively responsible to the Lok Sabha, the House of the People
  • 10. Government
    • State Government
        • The Governor- Representative of the President, is the head of Executive
        • Real executive power rests with the Chief Minister who heads the Council of Ministers
        • The Council of Ministers of a state is collectively responsible to the elected legislative assembly of the state
  • 11. Government Indian Parliament Official Web Site
  • 12. Government
    • Some Indian Government Websites
    • President of India
    • Prime Minister Of India
    • Ministry of Defense
    • Ministry of Environment and Forest
    • Ministry of Education
  • 13. Government
    • Customs Regulations are good for IT industry
    • Reduction of import duty on Computer Software from 114% to 0% including
      • Data
      • Sound or images
      • Source code or object code
      • CD- ROMs containing educational, journals, periodicals, or newspapers
    IT Policies
  • 14. Government
    • NASSCOM - National Association of Software and Service Companies -Secured tax exemption from profit on exports
    • Income Tax Policies since 1990 have encouraged exports of computer software and technical services
    • Tax deductions on IT profits let firms establish themselves
    • By 2010 the Indian Government will slowly begin to reduce the Income Tax deduction amounts
    IT Policies
  • 15. Government
    • New revenue for the Indian Government will go toward IT industry development
    • Laws and Regulations- Information Technology Act 0f 2000
      • Bill addresses jurisdiction, privacy, liability, uniform laws for electronic commerce, content regulation, and taxation.
      • Digital signatures are now acceptable and equal to hand signatures
      • Outlines penalties for IT criminal activity
    IT Policies
  • 16. Government
    • National Long Term IT Policy
      • Deregulation and de-licensing of import of software productivity tools
      • Insistence of higher quality through ISO 9000 standards or equivalent
      • Introduction of special incentives for increasing the language advantage for other languages such as Russian, Japanese, Chinese
      • Encourage mathematical talent into mathematically oriented software
      • Enforcement of copyright laws
    IT Policies
  • 17. Government
    • National Long Term IT Policy
      • Incentives for R&D
      • Deregulation of fiber optic linkages
        • Example- project for a National Internet backbone supporting 10mbps or more including series of Urban data networks
    IT Policies
  • 18. Government
    • Software Development Parks
    • Example - TIDEL Park
    • http://www.tidelpark.com /
    IT Policies
  • 19. Culture History
    • Indus Valley Civilization (up to 1500 BC)
    • Brahmanic Ages (1500 BC - 1000 AD)
    • Islamic period (1000 AD - 1750 AD)
    • British Rule (1750-1947)
    • The Indian Republic (1947-present)
  • 20. Culture Religion
  • 21. Culture Hindu Caste System
  • 22. Culture Hofstede Comparison
  • 23. Culture Business Etiquette – Appearance
    • Men are generally expected to wear a suit and tie for business
    • Women should wear conservative dresses or pantsuits
    • When dressing casual, short-sleeved shirts and long pants are preferred for men; shorts are acceptable only when exercising. Women must keep their upper arms, chest, back, and legs covered at all times
  • 24. Culture Business Etiquette – Behavior
    • Never point your feet at a person. Feet are considered unclean. If your shoes or feet touch another person, apologize
    • Business lunches are preferred to dinners. Hindus do not eat beef and Muslims do not eat pork
    • Whistling is impolite and winking may be interpreted as either an insult or a sexual proposition
  • 25. Culture Business Etiquette – Communications
    • There are more than fourteen major and three hundred minor languages spoken in India. The official languages are English and Hindi. English is widely used in business, politics and education
    • The word "no" has harsh implications in India. Evasive refusals are more common, and are considered more polite. Never directly refuse an invitation, a vague "I’ll try" is an acceptable refusal
    • Titles are very important. Always use professional titles
  • 26. Culture
  • 27. Culture Education – IT rank within Asia Asiaweek.com – 1999 data
  • 28. Culture Indian Institute Of Technology
    • “ IIT has probably produced more
    • millionaires than any other undergraduate institution.”
    • “ Indians, most of whom graduated from IIT, founded about 10 percent of the start-ups in
    • Silicon Valley between 1995 and 1998.”
    • http://shantanunigam.tripod.com/html/iit_good.htm
  • 29. Culture Indian Institute Of Technology
  • 30. Economy
    • GDP composition
      • Agricultural 23%, Industry 28%, Services 48%
  • 31. Economy
    • GDP ~ $3.033T USD (9% IT sector)
    • GDP Real growth rate ~ 8.3%
    • Investment ~ 23.1% of GDP
    • Poverty ~ 25% below poverty line
    • Labor force ~ 472 million (60% agricultural, 17% industry, 23% services)
    • Unemployment ~ 9.5%
    • Exports ~ $57.24B USD:
      • US 20%, China 6%, UK 5.2%
    • Imports $74.15B:
      • US 7%, UK 5%, China 5%
  • 32. Economy
    • After Independence
      • door closed to foreign investors
      • Gov’t was “interventionalist”, monopolized media, aviation, banking, and telecommunications
    • Gandhian self-sufficiency or "swadeshi" that had inspired the Independence movement
    • Policy-makers favored socialist economic planning with limited free-marketeering
  • 33. Economy
    • Private companies moved into agriculture, industry and the production of consumer goods
    • By 1990, Country was broke
    • Foreign exchange reserves were at an all time low.
    • The World Bank and the IMF agreed to bail out India
    • India joins Structural Adjustment Program
  • 34. Economy
    • In five years India became one of the world's top ten emerging markets
  • 35. Economy
  • 36. Economy
  • 37. Economy
  • 38. Economy
    • FDI in India
      • FDI conference index (AT Kearney) ranks India as third best destination for FDI (overall) behind China and USA
      • In 2003, India was ranked 3 rd
      • India displaced US as second place for FDI among manufacturing investors.
      • Telecom and Utility investors rank India 2 nd (up from 5 th in 2003)
  • 39. Economy
    • FDI in India
      • India (along with China) dominate the top two positions for:
        • Most positive investor outlook
        • Likely first-time investments
        • Most preferred offshore investment locations for business processing and information technology services
  • 40. IT - Access
    • Teledensity at 6.0
      • Significantly lower than other developing countries. Mainly because of low per capita income and low level of urban population
      • World average at 15
      • Increased from 3.6 in 2001 – to 6.0 in 2004
    • 48,917,000 land lines (2003)
    • 23,154,400 mobile phones (2003)
    • 7.2 computers per 1,000 people
    • 86,871 internet hosts
    • 18,481,000 internet users
  • 41. IT - Access
    • Age
      • 68% users between the age of 15 and 30 use the internet
    • Gender
      • Male: 76%, Female 24%
        • USA moved from similar profile to 49:51 ratio
    • Usage purpose
      • Email - 90%
      • Information - 50%
      • Chat - 43%
      • Academic - 41%
      • Entertainment - 27%
  • 42. IT - Access
    • Time Spent
        • < 1/2 hr 21%
        • 1/2 hr - 2 hrs 64%
        • > 2 hrs 15%
    • Point of Access
        • Home 25%
        • Cyber Cafe 30%
        • Work 29%
        • Others 16%
  • 43. IT - Infrastructure
    • Telecommunications
      • Grown by over 20% on a year to year basis since 1997
    • Power
      • 6 th largest power generator in the world
      • Regular, reliable un-interrupted power
    • Roads
      • 3.3 million KM’s of road (2 nd largest in world). ½ of them paved
      • Roads & highways improved over last few years. Most cities linked
  • 44. IT – Major Locations
  • 45. IT – Economic Growth
    • Inward FDI
      • US largest investor
        • Microsoft, Oracle, Cisco, Intel, Dell
    • Job creation
      • 40% compounded annual growth rate (2 million jobs by 2008)
    • Real estate demand/growth as a result of business relocations
  • 46. IT – ecommerce
    • Low e-commerce activity
      • Low personal computer and Internet base
      • lack of security
      • high access costs
      • Small number of credit cards (5 million)
    • Dominated by low value products
      • Music, greeting cards and gifts, books and magazines, food stuffs and beverages
    • E-commerce is picking up
      • Increase from 4.5 billion Rs. In 2000 to an estimated 252 billion Rs. in 2005 (233 billion from B2B e-commerce)
  • 47. IT – Outsourcing
    • Software development
      • Evolution
        • Started in 1984
        • 160 fortune 500 companies in 1998
        • 250 in 2004
      • Abundance of English speaking skilled IT workers at low cost
      • 30% to 50% cost savings
      • Reliable communication infrastructure
      • Time zone advantage
      • Good export relationships
  • 48. IT – BPO
    • Business process outsourcing (BPO) is the act of transferring some of an organization's repeated non-core and core business processes to an outside provider to achieve cost reductions while improving service quality
    • 75% of US and European multinational companies now use outsourcing or shared services to support their financial functions
  • 49. IT – BPO
    • Kinds Of Service
      • Customer Support Services
      • Technical Support Services
      • Telemarketing Services
      • Employee IT Help-desk Services
      • Insurance Processing
      • New Business / Promotion
      • Policy Maintenance / Management
      • Data Entry Services / Data Processing Services
      • Scanning, OCR with Editing & Indexing Services
      • Book Keeping and Accounting Services
      • Internet Search, Product Research, Market Research, Survey, Analysis.
        • Technical support
        • Customer service
      • 54% growth from 2002 – 2003
  • 50. IT – BPO
    • Industry had a growth rate of 54% in 2003-04
    • BPO COMPANY
    • Outsourced Product Development (OPD)
    • R&D, prototyping, development, testing, maintenance, support and development of next generation of the products
  • 51. IT – BPO
  • 52. IT – BPO
  • 53. IT – Success factors
    • Trade organizations
      • National Association of Software and Service Companies (NASSCOM)
    • Indian Diaspora
      • Keep it’s edge in outsourcing due to influence of the Indian Diaspora in the UK & the US
    • Quality, speed, process orientation all at an attractive price
  • 54. INFOSYS
    • Started in 1981
    • Offers its service in the following areas
      • Enterprise IT programs
      • Communications and Internet technology product development
      • Engineering product design and data management
    • 1999 the company became the first Indian company to list in NASDAQ
    • In 2004 the company crossed a billion dollar in annual revenue
    • Market cap of 16.13 billion dollars
  • 55. INFOSYS
  • 56. Hot off the Press !!! India is magic in software: Steve Ballmer
  • 57. AMERICAN BRAND NAMES
  • 58. Issues
    • Patenting Intellectual Property
    • Boredom and Health concerns of Employees
    • Dwindling Pricing
    • Growing Competition
      • China factor
    • Security
    • Attrition
  • 59. Summary
    • Why Invest in IT in India?
      • Large pool of IT skilled labor
      • Good government polices on inward FDI
      • IT friendly import and export regulations
      • English widely spoken and understood
      • India enjoys the confidence of global corporations
      • Mature Industry
      • Relatively cheap labor
      • Of the 23 software companies in the world that have achieved the prestigious SEI-CMM Level 5, 15 of them are Indian
  • 60. Factors that Influence the IT Outsourcing Environment
    • Economy
    • Fast Growing
    • Stable
    • FDI Friendly
    IT Outsource Readiness
    • Government
    • Democracy
    • Stable
    • IT Friendly
    • Culture
    • English
    • Education
    • Resource Pool
    • Invest In
    • Offshore Development Center
    • BPO center
    • OPD center
  • 61. Vs Pakistan
  • 62. Vs Pakistan
    • Geography & Demographics
      • 803,940 sq. km (~ 2x California)
      • Border w/ India – 2912 km.
      • Coastline 1046 km
      • 141,553,775 people
      • 41% under the age of 15
      • Life expectancy ~ 61 years
      • Religion – 97% Muslim (77% Sunni)
      • English is official language of most government ministries. Official language is Urdu even though less than 10% of population speak it as primary language.
      • Literacy – 37.8%
  • 63.
    • Economy
      • GDP ~ $318B USD
      • GDP Real growth rate ~ 5.3%
      • Investment ~ 12.9% of GDP
      • Poverty ~ 35% below poverty line
      • Labor force ~ 44 million (44% agricultural, 17% industry, 39% services)
      • Unemployment ~ 7.7%
      • Exports ~ $11.7B:
        • US 22%, UAE 9%, China 6%, UK 7%, Saudi Arabia 5%
      • Imports $12.51B:
        • UAE 12%, China 12%, Saudi Arabia 11%, US 7%, UK 5%,
      • 2004 FDI ($950M), 2003 FDI ($798M), 2002 ($485M)
    Vs Pakistan
  • 64.
    • IT Industry and Issues
      • 2002 ~ Ministry of IT created
      • Exports $35 million worth of software a year as compared to $8 billion from India
      • Reasons Pakistan is not a significant player:
        • low production of IT-trained workforce (~ 800 per year)
        • underdeveloped and fragmented IT industry
        • lack of any initiative from existing industry leaders,
    Vs Pakistan
  • 65.
    • IT Industry and Issues
      • To compete:
        • Educate workforce to the int’l educational standards,
        • incorporate new technologies and modern management practices into its industry,
        • focus on building an information-based economy
      • Ex: October, 2004 ~ IT ministry approves Rs 236 million for ten IT projects for advancement of IT in private sector
    Vs Pakistan
  • 66. QUESTIONS ?