IT Enabled Services


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  • The world is waking up to the opportunity that is India. - Spread over 3.3 million sq kms, the geographical spread and the regional diversity found in this country is unmatched by any other place in the world. - Our human capital is our most distinguishing factor.
  • Our socio-economic credentials are strong: - India is the largest and a most vibrant democracy. - In PPP terms, it ranks the 4th largest economy globally. - In fact, according to Goldman Sachs we are geared to be the world`s 3 rd largest economy by 2010.
  • Indian industry has a story to narrate to the world in almost every sector: - Hero Honda is the largest manufacturer of motorcycles . - India`s Pharmaceutical Industry is the 4th largest in the world. - The country is a global R & D hub. More than a 100 Fortune 500 companies have set up R&D facilities in India.
  • India is already termed as the ITES-BPO capital of the world, even when it`s IT spend is a small fraction of the US. The ITES-BPO sector in India grew at around 52% - from US$ 2.3 billion in 2002-03 to touch US$ 3.6 billion in 2003-04.
  • IT Enabled Services sector has emerged as a key driver of growth for the Indian IT Industry. - IT software and services industry in India accounted for 2.4 per cent of the country's GDP and 16 per cent of exports in 2002-03. - By 2008, the Indian IT software and services industry is projected to account for 7 per cent of India's GDP and 35 per cent of total exports.
  • ITES has the abilities and prowess to deliver along all segments from Specialised, Vertical-specific areas like - Medical transcription - Legal database processing - Digital content development/animation - Engineering and Design To the general fields like: - Telemarketing/pre-sales - Consumer care - Technical support - Back office operations – accounts, financial services, etc - Data processing
  • BPO services’ sales from India are set to grow from US$709 million in 2003 to about US$ 2572 million in 2006 at a CAGR of 52%. - The marketing BPO services are expected to grow from a US$ 609 million business in 2003 to US$ 2188 million in 2006 at a CAGR of 62%. .
  • For most ITES providers in India, a majority of the revenue comes from serving clients in industries such as banking and finance, insurance, e-commerce, software, telecommunications, media and entertainment, retail and airlines. -This trend is expected to continue as players choose to leverage domain experience. - As per IDC estimates, the Human Resources activity will represent the highest revenue opportunity for Indian companies going ahead. - It will account for a turnover of around US$ 25,555 million in 2006, up from US$ 7,373 million in 2001.
  • The BPO industry in India is witnessing a major change. - A number of leading software services companies have been making a foray into the ITES/BPO domain, either directly, or through mergers and acquisitions. Wipro Spectramind i s India's largest third party offshore BPO provider. It’s Business Process Outsourcing portfolio includes end-to-end solutions across a spectrum of services. HCL Technologies BPO, a wholly owned subsidiary of HCL Technologies Ltd, it provides a comprehensive range of services and its clients include among others global telecom majors and Fortune 500 Retail Conglomerates. The number of domestic players is ever increasing - Hinduja TMT, ICICI OneSource, Sutherland Technologies, Epicenter Technologies, 24/7 Customer, Datamatics Technologies
  • India is clearly emerging as the choice for global majors for basing operations in the ITeS segment. GE Capital International Services (GECIS) : GECIS is a world-class remote processing operation that services its clients from around the world through its IT-enabled services. GECIS is now a global company headquartered in India with operations in the Americas, Eastern Europe etc. Standard Chartered: One of the leading multinational BPO companies, it handles back-office work out of India for the company's global operations, including HR management and finance. American Express :uses its Indian BPO centre to undertake a whole host of activities like data management, information analysis and control operations. IBM acquired Daksh, a leading third party BPO service provider in India. The purpose being to enhance its ability to deliver customer relationship management and back-office services to its clients.
  • Indian IT players have in fact already made great strides in the ITES/BPO market. - What began as an activity that was confined to MNCs that set up captive ITES facilities in the country, India today has a large base of third party ITES/BPO companies that are bagging prestigious remote services projects from leading global organizations. - Like the IT services sector, Indian ITES-BPO companies are adopting global quality standards like six sigma, COPC, ISO 9001, etc. - While MNCs dominate the ITES - BPO space, an increasing number of Indian companies are making a foray into this sector, which are well-capitalised third party units. More than 210 companies are currently registered with NASSCOM.
  • The ITES–BPO sector has steadily increased its share in the total revenue of India’s IT software and services industry from 6.5% in 1998-99 and progressed to an estimated 29% in 2003-04.
  • The ITES/BPO segment is estimated to be one of the most significant business opportunities for the Indian software and services industry. - This sector is estimated to have register a growth of about 40% in 2004-05 to reach revenues of US$ 5.1 billion. - Various surveys estimate that the Indian BPO industry will have eight to ten $100-million third-party BPO companies. - The US$ 100-million mark is crucial because it gives the companies a critical mass to compete against multinationals such as EDS, Computer Sciences Corporation and Accenture.
  • Global business intelligence and consultancy firms such as Giga, Forrester Research and McKinsey & Co cite various reasons for the increase of offshore outsourcing by MNCs to India. - India's quality and cost benefit edge is one of the major draw. - According to a study by Forrester, India's edge over other competing nations in the IT outsourcing business is based on the country's decade old experience in this area, fluency in the English language, supportive government policy infrastructure, and high quality offerings - India also boasts of a large and rapidly growing number of IT-enabled services providers collectively covering a wide range of services, with different levels of complexity and value addition. - Another compelling rationale for IT-enabled services to base operations in India is that it allows to capitalise on time zone differences and provide services round-the-clock, every day of the week (24x7 services).
  • Global corporations are generating cost savings in the range from 40-60%, depending on the process off shored. - Manpower costs in India are 70-80% less than in the US and UK. - The real estate costs and General and Administrative (G&A) expenses are low in comparison with developed countries, which result in additional cost savings for customers.
  • India’s main competitive advantage in IT enabled services is its abundant, high quality and cost-effective pool of skilled manpower and engineers, backed by government support.
  • India has maintained its global competitiveness offering the best combination of cost-quality-scalability vis-a-vis competing offshore destinations such as the Philippines and China. - Indian productivity-quality-cost model has emerged as an optimal value proposition for the software and service industry Besides cost and abundance of knowledge professionals, there are other factors that make India a front-runner in attracting ITES-BPO business. Indian companies offer 20 % higher productivity in comparison to other competing countries like Philippines, Canada and Australia. - In terms of quality of services offered, India stands 30 % higher than any other region.
  • The Government of India recognises ITeS - BPO as a major thrust area and provides key incentives to industry players, some of which are as follows : - Sharing of bandwidth for disaster recovery and mission critical applications between multiple entities - Approved Internet and IPLC connectivity on the same LAN - Allowed connectivity of a LAN in an international call centre to a domestic ISP. This enables a call centre operator to choose his service provider. Competition is expected to drive down prices while offering a higher service-reliability value proposition - Duty-free imports of capital goods for BPO companies - The Government has also allowed total income tax exemption on export of IT initiative enabled outsourcing services
  • The Indian states are the pockets of growth, which have keenly nurtured the ITES sector. - Examples abound of the progressive incentives provided by some of the states in order to promote ITES : Andhra Pradesh - Data Protection and Consumer Privacy Act being formulated to reassure ITES companies and their customers of safety of their data. - Plans for setting up a virtual institute for ITES training - Special packages proposed for projects exceeding investment of US$ 11 million. Tamil Nadu - A draft ITES Policy, 2002 has been chartered which plans to make Tamil Nadu the global ITES capital. - Development of IT parks has been a focus - Priority sector status is to be assigned to ITES companies for loans from State Financial Institutions
  • In the A T Kearney ‘Offshore Location Attractiveness Index 2004’, India scores high on cost advantages, depth and breadth of offshoring experience, and people skills while China is a distant second. - New opportunities are now emerging in the Indian BPO sector. - The Indian BPO industry has extended its lines of service to value-added areas like : - package software implementation - system integration - R&D - engineering - engineering design - biotech research - research outsourcing - customer analytics - market research - equity research.
  • India offers a plethora of opportunities for business and investment in the ITES sector. - For information on the industry, for partnership and investment, you can contact the National Association of Software and Service Companies (NASSCOM).
  • IT Enabled Services

    1. 1. IT Enabled Services In the elite league
    2. 2. IT Enabled Services <ul><li>India - An Overview </li></ul><ul><li>Market and Growth Potential </li></ul><ul><li>Players </li></ul><ul><li>Opportunities </li></ul><ul><li>Why India? </li></ul><ul><li>Contact in India </li></ul>
    3. 3. India - An Introduction <ul><li>Population </li></ul><ul><li>States/UTs </li></ul><ul><li>Geographical Area </li></ul><ul><li>Sea Coast </li></ul><ul><li>Languages recognised </li></ul><ul><li>Business language </li></ul><ul><li>Per Capita Income </li></ul><ul><li>GDP </li></ul>Over 1 bn 35 3.3 mn sq kms 7,500 kms 22 English US$ 464 US$ 575.31 bn
    4. 4. India - Fast pace Growth <ul><li>Largest democracy </li></ul><ul><li>4th largest economy by PPP index </li></ul><ul><li>6th largest energy consumer </li></ul><ul><li>ForEx reserves skyrocket from USD 42 bn (2001) to </li></ul><ul><li>USD 123 bn (2004) </li></ul><ul><li>GDP growth to continue between 6-8% </li></ul><ul><li>3rd largest economy by 2050: Goldman Sachs </li></ul><ul><li>Leading in IT & BPO </li></ul><ul><li>Oil & Gas and Biotechnology sunrise industries </li></ul>
    5. 5. India - Leading the world <ul><li>Hero Honda - largest manufacturer of motorcycles </li></ul><ul><li>Moser Baer - 3rd largest optical media </li></ul><ul><li>manufacturer in world </li></ul><ul><li>Pharmaceutical Industry - 4th largest in world </li></ul><ul><li>Walmart, GAP, Hilfiger sources more than </li></ul><ul><li>USD 1bn worth apparel from India </li></ul><ul><li>100 Fortune 500 have set R&D facilities in India </li></ul><ul><li>including GE, Delphi, Eli Lilly, HP, Heinz and Daimler </li></ul><ul><li>Chrysler </li></ul>
    6. 6. IT Enabled Services <ul><li>India - An Overview </li></ul><ul><li>Market and Growth Potential </li></ul><ul><li>Players </li></ul><ul><li>Opportunities </li></ul><ul><li>Why India? </li></ul><ul><li>Contact in India </li></ul>
    7. 7. IT Enabled Services <ul><li>Key driver of growth for Indian IT industry </li></ul><ul><li>Market Size </li></ul><ul><li>2002-03 US$ 2.3 billion </li></ul><ul><li>2003-04 US$ 3.6 billion </li></ul><ul><li>Growth 52% </li></ul>
    8. 8. IT and ITeS Market 2002 - 03 2.4% of GDP 16% of exports 2008 7% of GDP 35% of exports
    9. 9. Segments in ITES-BPO Sector <ul><ul><ul><ul><li>Medical transcription </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Legal database processing </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Digital content development </li></ul></ul></ul></ul><ul><ul><ul><ul><li>or animation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Online education </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Remote maintenance </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Engineering and Design </li></ul></ul></ul></ul>Specialised- Vertical specific <ul><li>Contact centres </li></ul><ul><li>Telemarketing/pre-sales </li></ul><ul><li>Consumer care </li></ul><ul><li>Technical support </li></ul><ul><li>Back office operations </li></ul><ul><li>Data processing </li></ul>General
    10. 10. BPO Services <ul><li>Sales to grow </li></ul><ul><li>2003 US$ 709 million </li></ul><ul><li>2006 US$ 2572 million </li></ul><ul><li>CAGR 52% </li></ul><ul><li>Marketing to grow </li></ul><ul><li>2003 US$ 609 million </li></ul><ul><li>2006 US$ 2188 million </li></ul><ul><li>CAGR 62% </li></ul>Source: International Data Corporation (IDC)
    11. 11. Changing Revenue Streams Relative importance three years later Current relative importance
    12. 12. IT Enabled Services <ul><li>India - An Overview </li></ul><ul><li>Market and Growth Potential </li></ul><ul><li>Players </li></ul><ul><li>Opportunities </li></ul><ul><li>Why India? </li></ul><ul><li>Contact in India </li></ul>
    13. 13. Domestic ITES-BPO Service Providers Wipro Spectramind HCL Technologies BPO EXL Services Hinduja TMT Sutherland Technologies ICICI OneSource Datamatics Technologies Epicenter Technologies Hero Mindmine 24/7 Customer
    14. 14. Global ITES-BPO Players GE Capital International Services (GECIS) Standard Chartered American Express HSBC BPO unit Hughes BPO Services e-Serve International Ltd IBM Dakshe-services PvtLtd.(a part of IBM) AOL JP Morgan Chase Computer Associates Hewlett Packard eFunds HealthScribeIndia ADP Wilco CapMarkOverseas Processing India Dell Microsoft <ul><ul><ul><li>Oracle </li></ul></ul></ul>Deloitte Consulting
    15. 15. IT Enabled Services <ul><li>India - An Overview </li></ul><ul><li>Market and Growth Potential </li></ul><ul><li>Players </li></ul><ul><li>Opportunities </li></ul><ul><li>Why India? </li></ul><ul><li>Contact in India </li></ul>
    16. 16. Outsourcing Destination <ul><li>Offering best combination of cost-quality-scalability </li></ul><ul><li>Global quality standards -Six sigma, COPC, ISO 9001 </li></ul><ul><li>Healthy mix of MNCs and Indian companies </li></ul><ul><li>More than 210 companies registered with NASSCOM </li></ul>
    17. 17. BPO on the rise Share of ITES-BPO sector in total revenues of India`s IT software & services industry has increased 1998-99 6.5% 2003-04 29%
    18. 18. Grow with India <ul><li>ITES-BPO sector </li></ul><ul><li>2004 -05 ( Projected) US$ 5.1 billion </li></ul><ul><li> Growth of 40% </li></ul>
    19. 19. IT Enabled Services <ul><li>India - An Overview </li></ul><ul><li>Market and Growth Potential </li></ul><ul><li>Players </li></ul><ul><li>Opportunities </li></ul><ul><li>Why India? </li></ul><ul><li>Contact in India </li></ul>
    20. 20. India Advantage Low manpower costs High quality Low real estate costs Capitalise on time zone difference Proficiency in English Reliable infrastructure Vast pool of knowledge professionals Prestigious institutes like IITs
    21. 21. Competitive Cost Source: Industry Sources, Merrill Lynch, 2003 Manpower costs 70 - 80% lower than in US/UK
    22. 22. Growing Knowledge Pool Source: IMD Competitiveness Yearbook 2003 Source: UN, Morgan Stanley
    23. 23. India Competitiveness Productivity 20% higher Quality 30% higher
    24. 24. Central Policy Advantage <ul><ul><ul><ul><li>Tax breaks </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Bandwidth sharing between multiple entities </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Internet and IPLC connectivity on same LAN </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Duty-free imports of capital goods </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Income tax exemption on exports </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Fast track approval for projects </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Relaxation in regulations </li></ul></ul></ul></ul><ul><ul><ul><ul><li>100% FDI in Call Centers </li></ul></ul></ul></ul>
    25. 25. State Policy Advantage <ul><ul><ul><li>Assignment of priority sector status </li></ul></ul></ul><ul><ul><ul><li>Cheap power and real estate </li></ul></ul></ul><ul><ul><ul><li>Concessions in taxes and various fees </li></ul></ul></ul><ul><ul><ul><li>Latest technology for infrastructure </li></ul></ul></ul><ul><ul><ul><li>Favourable legislation </li></ul></ul></ul><ul><ul><ul><li>IT parks </li></ul></ul></ul>
    26. 26. India - An offshore destination
    27. 27. IT Enabled Services <ul><li>India - An Overview </li></ul><ul><li>Market and Growth Potential </li></ul><ul><li>Players </li></ul><ul><li>Opportunities </li></ul><ul><li>Why India? </li></ul><ul><li>Contact in India </li></ul>
    28. 28. Contact in India National Association of Software and Service Companies (NASSCOM) International Youth Centre Teen Murti Marg Chanakyapuri New Delhi - 110021 Tel 91 11 23010199 Fax 91 11 23015452 Email
    29. 29. Contact in India MAIT 4th Floor, PHD House Opp. Asian Games Village New Delhi 110 016 Tel 26855487/26866976/26866976 Fax 26851321 Email
    30. 30. Contact in India Confederation of Indian Industry 249-F, Sector 18, Udyog Vihar Phase IV Gurgaon 122015 Tel 0091 124 5014060-67 Fax 0091 124 5014080/5013875 Email