www.vestforsk.no INDIA – Basic Facts Ancient civilization : 2,500 B.C. 325 languages spoken – 1,652 dialects 18 official languages 29 states, 5 union territories Parliamentary form of Government 3.3 million sq. kilometers - Area Worlds largest democracy. 7,516 kilometers - Coastline Worlds 10th largest economy. World-class recognition in IT, bio-technology and space. Largest English speaking nation in the world.(15.2%) 3rd largest standing army force, over 1.5Million strong. 2nd largest pool of scientists and engineers in the World. Source: UNESCO, 2011
www.vestforsk.no Historic Prelude… 1975 : After 25 years of democracy, Emergency is declared in India , following an electoral defeat of the Congress Party. 1977 : Emergency is lifted . Public opinion swings in favor of a coalition government. 1978 : The new Janata Government asks multinationals to leave India. IBM and Coca Cola are heavily impacted. 1979 : IBM India employees form a new company called CMC to maintain IBM equipment.
www.vestforsk.no Historic Prelude… Late 1970s Mid 1970s Early 1970s Senses the widening gap between the Burroughs Corporation sees government and IBM . Creates a the opportunity and seeks to structure and platform for Burroughs form a joint venture with theTata Registry formed Corporation to enter India. Tatas to form a new companyearlier to provide called Tata Burroughs Limited.shareholder Enters into an agreement to provideservices, grows to Tata services to Burroughs Customers in Many other Indian companiesComputing Centre and India. follow suit and enter intothen evolves into Tata similar partnership with DigitalConsultancy Services. Develops considerable competency in Corporation, Wang etc. Burroughs platform of SystemProvides services to software, Languages and Applications. TCS decides to widen its skillcompanies outside the base to IBM, Tandem andTata group. Leverages this skill base to partner other platforms. Positions with Burroughs to provide services to itself as vendor neutral andIs hungry for growth. Burroughs Customers abroad capable of cross platform work.
www.vestforsk.no The labored 1980s The going gets tough. Government policies make it hard to import computers , necessary to develop skill base. Foreign travel is restricted. The telecommunication infra structure in India is primitive. Not conducive to provide quality offshore services. Co-founder of Infosys Banks are unwilling to provide support to the N.R. Narayan Murthy software industry as it is not sufficient Sudha Murthy collateral.Consequently the IT services industry develops mainly as a Manpower Services Provider and not asa Project bidder. Margins are low. Growth is slow.The silver lining is the extensive development of Unix skills in India.
www.vestforsk.no The opportunity of early 1990s India faces a massive crisis of low foreign exchange reserves and the possibility of defaulting on international loans. The Congress government takes a bold step to deregulate, liberalize, privatize and globalize the Indian economy. MRTP and FERA Acts withdrawn or diluted. Moves away from socialism. Taxes are lowered. Import impediments are removed. Foreign investment and tie ups are welcome.The IT sector grabs this opportunity to expand aggressively. Imports state of theart systems; trains staff and seeks to enter international markets with projectoutsourcing. In the process the industry discovers the magic of Quality, Processesand Best Practices.
www.vestforsk.no Government initiatives and progressive policy reforms Establishment of a nodal agency (STPI) Software Technology Parks of India (STPI) was set up to provide: Fiscal benefits like tax holidays to attract investment into the industry Basic Infrastructure Single-window clearances for setting up Export Oriented Units (EOUs) Virtual model allows firms to avail benefits without restrictions on location
www.vestforsk.no When Capability Maturity Model (CMM) was introduced in the late 90s, almost the entire Indian IT industry went for a re-certification and within a few years, many software companies matured to level 4 or level 5. More than half of the total high-maturity organizations in the database of the Carnegie Mellon Software Engineering Institute (SEI) are from India.
www.vestforsk.no The Indian IT Advantages The Indian IT industry Heritage: Worlds largest started as a labor- democracy, open to West, mathematical arbitrage body shop, but competency is now moving into Talent: Qualified CMM/ISO: Quality & reliability, common knowledge-intensive engineers, IITs, IIMs, p rivate training institutes vocabulary, professio nalism services. The Indian IT Indian IT engineers have Advantage not only learnt how to Language: English solve problems, but have Government: Tax as a business language, English as breaks, software gained experience in re- a medium of technology parks, education simplified regulations engineering processes and making process Investment: Foreign direct flows more effective. investment, presence of MNCs, good corporate governence
www.vestforsk.no Genesis of the Indian software industry Consulting IT Services Package Segments Implementation Business Process Management Application Development Application Maintenance System and Data Base Administration Network & Data Security Infrastructure Management It is a 400 Billion dollar industry now.
www.vestforsk.noGenesis of the Indian software industry Consulting IT Services Package Segments Implementation Business Process Management Application Development Application Maintenance System and Data Base Administration Network & Data Security Infrastructure ManagementThese segments have evolved over decades. They were unbundled over years.The skill sets needed have diversified and have given rise to specialization overtime.
www.vestforsk.no Indian IT Industry – Innovating Constantly Building complete services portfolio Pioneering the Global Delivery Model 1. Indian IT Industry: Value added 1. India pioneered the Global Delivery Offshoring Model 2. Leading IT companies have transformed 2. Talent Development – A critical into Full Service Providers success factor Wipro Example: Strong 360º Portfolio Wipro Example: Global Delivery Capabilities Vertical Focus Telecom Others OEM 10% 17% Manufact -uring Embeded 12% 15% Telecom Service Providers Energy & 5% Utilities 11 % Finance 18% Retail 12 % R&D Custom Services App Dev & Testing 26%Maintenance Consulting IT Enabled Services 30% 5% Infrastructure Package Services / 7% Services Implementation BPO 10% 12% 10%
www.vestforsk.no Moving up the value chain India, earlier the primary global offshoring destination for low-end back-office services, is now emerging as an innovation and research hub India is estimated to continue attracting substantial investments in the sector, with the cost- IT/ITeS sector: From the arbitrage factor expected to prevail back-end services location to the global innovation for another 10 to 15 years hub
www.vestforsk.no Value proposition Breadth of service offering Service offerings have evolved from low-end application development to high-end integrated IT solutions Range of services offered by leading players spans a wide spectrum cutting across multiple verticals Quality/maturity of processes Host to more than 55 % of global SEI CMM Level 5 firms Expected to host the highest number of ISO certified companies
www.vestforsk.no Value proposition Cost advantage Cost of an engineer is about 20 – 40 % of comparable cost in European Union (EU) Selling, general and administrative costs approximately 80 % of comparable cost in EU Average offshore billing rate of US$ 20 to 35 per hour; about 50 to 70 per cent lower than EU Ease of scalability 6,75,000 technical graduates per annum, of which 4,00,000 are engineers Over 50,000 MBAs graduating per annum Leading firms add more than 10,000 new employees per annum Global and 24/7 delivery capability
www.vestforsk.no Firm foundations in talent and infrastructure Dedicated cost effective quality real estate in the form of Software Technology Parks (STPI) and Special Economic Zones (SEZs) STPI infrastructure available across the country demonstrates government’s support to the sector High quality telecom infrastructure with cost of connectivity declining rapidly and service levels improving significantly
www.vestforsk.no Firm foundations in talent and infrastructure Real estate, air and road connectivity, hospitality registering impressive growth and providing supportive business environment to IT sector Infrastructure availability is set to complement the industry growth, with the Government of India working towards capacity building India possesses an abundant talent pool, producing 6,75,000 technical graduates per annum, of which 4,00,000 are engineers (Source: AICTE 2011)
www.vestforsk.no Firm foundations in talent and infrastructure Industry stakeholders including individual firms, associations undertaking initiatives to address issues concerning suitability of talent Some such initiatives include National rollout of skill certification through NAC (NASSCOM Assessment of Competence) Setting up finishing schools in association with Ministry of HRD to supplement graduate education
www.vestforsk.noIT hubs in India Foreign investors see India as an attractive investment option, despite the uncertain global economic climate, according to the second edition of Indian Attractiveness Survey. 20% Foreign Direct Investment (FDI) increase in India in 2011. Nearly 255,416 new jobs created by FDI projects in 2011.
www.vestforsk.no Established IT/ITeS hubs in India NCR - Delhi Total STPI registered units by 2010-11: 1,400 (150 added in 2010- 11) IT/ITeS majors: IBM, Genpact, Oracle, Am Ex, Convergys, HP, General Motors Kolkata Total STPI registered units by 2010-11 : 166 (28 added in 2010-11) IT/ITeS majors: IBM, Cognizant, TCS, Infosys, Wipro Mumbai Total STPI registered units by 2010-11 : 630 (40 added in 2010-11) IT/ITeS majors: TCS, Infosys, Wipro, Siemens, Accenture
www.vestforsk.no Established IT/ITeS hubs in India Hyderabad Total STPI registered units by 2010-11 : 1,060 (130 added in 2010-11) IT/ITeS majors: HP, Amazon, Verizon, Convergys, EXL, Infosys, TCS Pune Total STPI registered units by 2010-11 : 635 (108 added in 2010-11) IT/ITeS majors: Cognizant, Convergys, EXL, KPIT, Msource
www.vestforsk.no Established IT/ITeS hubs in India Bangalore Total STPI registered units by 2010-11: 1,700 (201 added in 2010-11) IT/ITeS Majors: Infosys, Wipro, TCS, HP, Siemens, HSBC, Compaq Cumulative software exports from Bangalore are estimated at US$ 11 billion, positioning it as the leading IT hub of India Chennai Total STPI registered units by 2010-11: 900 (131 added in 2010- 11) IT/ITeS majors: Infosys, Wipro, Accenture, Cognizant
www.vestforsk.no Emerging IT/ITeS destinations Transitioning to the Tier 2 and Tier 3 cities Indian IT-ITeS industry is primarily concentrated in seven clusters: Bangalore, NCR- Delhi, Hyderabad, Chennai, Pune, Mumbai and Kolkata Most IT companies started their operations in India in tier 1 cities, and have subsequently expanded into tier 2 cities Emergence of tier 3 cities like Chandigarh, Mysore is prominent in the ITeS-BPO segment Tier 2 and tier 3 cities are gaining importance in the IT/ITeS industry as these locations offer higher savings in administration, maintenance, real estate and infrastructure costs and human resource availability and costs
www.vestforsk.no Distribution among rural and urban area Central Universities: 18 Indian Institute of Technology (IIT): 14 Indian Institute of Management (IIM): 6 State Universities: 280 Deemed Universities: 121 Undergraduate Colleges : 40,725
www.vestforsk.no Special Training Indian IT companies keep aside between 3% and 5% of revenues for training programs Certifications like PMP® by the Project Management Institute, or application technology related certifications by Microsoft®, Oracle®, SAP®….
www.vestforsk.no Generalized IT & BPO career matrix Source: AICTE
www.vestforsk.no Typology of Employment Study by Global Talent Metrics in cooperation with the Indian Institute of Management, Bangalore
www.vestforsk.no Recommendations for Effective Recruitment A study-cum-recruitment tour to India Suitable time for India tour: October/November/December 2013. Duration: 6 to 8 days Regions to visit: Bangalore and Pune/Mumbai 1st and 2nd day: Visits to companies in ‘Electronics city campus’ in Bangalore IT Services Majors - Accenture, Cognizant, Infosys, IBM India, Mastek, TCS, Wipro. Mid-size Companies - Birla Soft, Celstream, NVIDIA, Patni. Academic Institution: International Institute of Information Technology, Bangalore 3rd day: Recruitment workshop and interview of potential candidates (specially experienced software professional in the required field) 4th day: Visits to companies in Pune/Mumbai. IT Services Majors – TCS, Cognizant, Infosys, Mastek, Persistent Systems. Mid-size Companies - Mphasis, Cybage Software Pvt Ltd, Cosmos eSolutions Pvt Ltd, Patni. Academic Institution: Maharashtra Institute of Technology (MIT) Pune/ C-DAC Pune / IIT Mumbai 5th day: Recruitment workshop and interview of potential candidates (specially experienced software professional in the required field)