Som Mittal PM Conference 15th Nov09

IT as a catalyst for Business Transformation The Power of Project Management 15th November, 2009 | Hyderabad

About NASSCOM Represents IT/BPO/Products/Engineering Industry Over 1300 members – Includes Indian Companies, MNCs and Captive units • Policy Advocacy – Partnership with the Government • Industry Development – Research, Events, Forums, Market development • Enabling Environment – Entrepreneurship, Innovation, Resource building, Security initiatives, Infrastructure • Global Trade Development – Policy advocacy, Market development, International Partnership, WTO/Bilateral engagements • Sustainability - CSR initiatives, Gender inclusivity, Driving Inclusive Growth, Green IT Initiatives

Indian IT – BPO Industry continues to grow Break-up of Exports by service line, FY2009E Exports generate 3/4th of total revenues

Industry employs nearly 2.2 Million professionals Direct Employment („000), • Almost 8 million indirect job FY08-FY09 opportunities created • 60% of the total cost is talent linked 10% • On an average, companies spend up to 40% of a staffer‟s annual salary on training • Implementing global best • 7.5% of the current workforce are foreign nationals; 20% increase in foreign nationals employed in FY09

Industry‟s impact on the Indian economy Rapid growth in the last decade Areas of Impact Impact Industry size (exports Domestic and domestic) Exports Employment • 45% of new urban jobs created Creation (1995-2005) • Supported 6-7x increase in Contribution tertiary education in IT/BPO to Education exporting states as compared to 52 other states • Women in the workforce Diversity and estimated to be 30% +31% p.a. Global • 30% of employees have worked Exposure outside India 40 6 • Exports offset close to 65 per Contribution 2 cent of India‟s cumulative net oil 4 to Exports imports over past decade 2000 2008 5

Focusing on Balanced Regional Growth 43 new locations identified for IT-BPO delivery New Delhi, Noida, 17% Gurgaon •Presently 97 percent of business coming from 6 major cities •Emergence of 43 tier 2/3 cities Mumbai, 15% •On an average costs in tier 2/3 Pune cities is 28% less than leader Others 3% cities • By 2018, 40% of IT-BPO exports will originate from non-leader Hyderabad 14% locations Chennai 15% •What is required is social infrastructure Leader Cities New Emerging Cities Bangalore 36%

FY10 outlook: Software and Services Indian IT-BPO sector-Export Indian IT-BPO sector- Domestic revenues revenues (USD billion) (INR billion) Growth of 15- 18% Growth of 4-7%

Investment in E-Governance >$10bn across 200,000 locations National E-governance Plan (NeGP) set-up to speed up E-governance at State and Central level National E-Governance Program - Mission Mode Projects (MMPs) Central (9) State (11) Integrated (7) • Income Tax • Agriculture • e-Biz • Central Excise • Land Records - 1 • EDI • Passport/Visa • Land Records - NLRMP • Transport • India Portal • Immigration • Treasuries • CSC • MCA 21 • Commercial Taxes • NSDG • National ID / UID • Gram Panchayats • Pensions • Municipalities • e-Courts • e-Office • Police - CCTNS • e-Procurement • Employment Exchange • Banking • e-District • Insurance NeGP COMPONENTS • Policies, Standards and Guidelines • Capacity Building and Training • Infrastructure • Awareness & Assessment • (SWAN, CSCs , SDC ) • Technical Assistance • Support Infrastructure

Institution supporting NeGP - NISG(National Institute of Smart Governance) NISG Process Proposal Approved & Contract Awarded 53 Companies/Firms/ Academic Research NISG Institutes and Society 8 Individuals/Domain Experts Sent for NISG Approval Line Ministries/ PSUs/ State Govts Empanelled Nominates Consultants Min 5 Consulting Firms Short listed NISG Bid is Issued Prepares Objective / Vision Document Techno Commercial Stakeholder Consultations/ Proposal Workshops AS-IS Study Consulting Firm TO-BE Study Selected Business Process Quality Reengineering Submits Submits the Front ending with Line Technology Solution Deliverable Deliverables Ministries/ Departments Design & Development Ensure Deliveries Detailed Project Report (DPR) RFP‟s Bid Process Management Programme Management Reviewed NISG Project Manager Change Management By NISG Training

Current scenario – Delivery approach Multi-client solutions/ products Domain Client interface expertise Customer End-to-end delivery intimacy Delivery “Offshore-onsite” excellence delivery model Large enterprises SMBs Large enterprises SMBs (Fortune 1000) Developed markets Emerging markets (e.g., BRIC)

Future scenario – “Step-out” business models Industry utility/ platform Multi-client Reusable components player solutions/ products SaaS-enabled SMB player Reinvented services Vertical specialist (e.g., clinical research) Domain Service through SMBs expertise Process reengineer (e.g., “gold standard” F&A) Multitier Delivery Customer intimacy Customer specialist Lean factory Delivery excellence Value-chain specialist BRIC specialist (e.g., IV&V)* Large enterprises SMBs Large enterprises SMBs (Fortune 1000) Developed markets Emerging markets (e.g., BRIC)

Global mega trends that will impact business and society Macroeconomic and 1 Shifting centers of economic activity – Emerging Asia demographic trends 2 Shrinking working age population 3 Increased internet and mobile connectivity Social and environmental trends 4 Demand-supply gap in key natural resources 5 Major shifts in industry structures and regulatory control Business and 6 Redefinition of corporate boundaries technology trends 7 Technology transforming – Governments and corporations

Economic and Demographic shifts significant Regional share of global GDP Comparison of population shifts Per cent Est. GDP CAGR Working age (15-60 years) Retiree (60+ yrs) Per cent, 1990-2025 100 Middle East and Africa 4.2 40 Latin America 90 41 UK 3.4 Asia (except Japan) 80 6.3 39 70 14 Japan 1.4 60 16 37 Italy 50 Europe 2.1 55 40 Germany 53 30 18 20 North America 3.0 750 60 10 India 0 920 1990 1995 2000 2005 2010 2015 2020 2025 2008 2020 Significant shift

Industry would witness higher growth in new markets and verticals Total revenue potential for global sourcing, 2020 USD billion 380 1,500 230 190 200 500 Up to 80% of growth from markets that are not core today Core markets Growth in core New verticals in New customer Outsourcing Total 2008 markets developed segments market in new addressable • 6 verticals countries • SMBs geographies market in 2020 • N. America, • Public sector • BRIC Europe, Japan • Healthcare • Large enterprises • Media • Utilities Creation of local jobs due to need for local knowledge; Broadening of workforce; Talent pool to service innovation needs – inclusion of strategic leadership and core delivery roles Source: McKinsey Analysis

Changed landscape and Innovation-led growth transforming business IT/BPO industry revenue potential USD billion Industry landscape in 2020 225 ▪ Globally dispersed footprints; decoupled value 50 Domestic chains ▪ Integrated solutions across end-to-end value chains 4x ▪ Shift to greater proportion of proprietary offerings in revenue mix 175 Exports ▪ Global people supply chain with globalized recruiting and talent practices 59 ▪ Innovation-led, end-to-end transformation 12.4 ▪ Several integrated players, multiple co-existing 46.3 business models FY2009 2020 ▪ Converged business models, rendering geographic boundaries obsolete

The industry‟s impact on India‟s economy and society by 2020 Areas Contribution of Indian technology-business services by 2020 • 6% of annual GDP Economy • 28% of annual exports • 30 million urban employment (direct and indirect) • Significant job creation in rural and non-metro areas Employment • Increased diversity (women are 50% of the total workforce) • Significant career opportunities due to globalised and location- independent models Growth outside metro • Infrastructure development cities – 8-10 satellite townships around Tier-1 cities – 10-15 Tier-2 cities with upgraded basic and business infrastructure • Provide solutions at a fraction of cost of traditional solutions & Reduced fiscal burden reduce public spend on these areas (healthcare, education, fin. & public services) • Improve transparency Globally reputed • Additional revenues of USD 50-80 bn innovation driving additional innovative solutions GDP contribution of 1.5-2%

Five-fold vision needs to be launched • Intellectual property framework • Winning through the downturn (especially enforcement) • Reinvented business models • Centers of Excellence • Tapping into new verticals, Building a Catalysing • Entrepreneurship geographies, customer segments preeminent growth beyond innovation • Robust domestic demand today‟s core hub in India markets 5 1 • Tertiary Developing a Five Establishing education high caliber 4 themes 2 India as a trusted quality and talent pool of • Improved global hub for scale up over 4 million 3 infrastructure (e.g., professional • Curriculum and people services satellite townships) faculty • Corporate development Harnessing ICT for inclusive governance growth • Risk management and security • ICT solutions for healthcare, education, • Global branding financial services, public services • Connectivity and access (e.g., broad-band rollout) • Soft infrastructure (e.g., IT literacy) Source: McKinsey Analysis; NASSCOM Analysis

Points to ponder for PMI (1/2) How does the future of PMI change and evolve during the future? • Changing customer profile/needs o Is the client the customer or is the end-user the customer? o How will we get customer empathy? o Going beyond SLAs and milestones o Flexibility, rapid changes and acquisitions • Changing work profile o More innovation and transformation driven o Long term project increases uncertainty o Profit & Loss back ended • Changing profile of contracts o New business models o More outcome based o Risk with vendor

Points to ponder for PMI (2/2) • Evolving risks o More and more work becoming mission critical • Role of Project management in service delivery • Increasing Government buying o Increasing role of technology in Government • Multiple projects need convergence • Change management and improvement needed Project Management over the next years will dramatically evolve to address the above

Thank You

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Som Mittal PM Conference 15th Nov09

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Som Mittal PM Conference 15th Nov09 — Presentation Transcript