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Indian IT (1)

Apr 14, 2018

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    GLOBAL SOLUTIONSFROM AN

    EMERGING NATION

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    The Outsourcing sector

    India is the leading country for offshore outsourcing.

    Rank: 1 - Outsourcing index: 7.1*

    400,000 people directly employed in this Industry.

    75% of US and European multinational companies have

    outsourced financial functions.

    The largest vertical sectors: financial services (41%),

    high-tech/telecom (20%), manufacturing (17%) andretail (8%).

    * SourcingLine - Independent research on top services companies and markets

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    Cost competitiveness

    Lower occupancy costs than similar US operations

    Salaries: Software engineer: 11.0 % of US

    Salaries: Junior BPO resource: 10.0 % of US

    Salaries: Operations manager: 27.0 % of US

    Salaries: Customer service representative: 17.0 % of US

    Corporate tax rates are about 34%, higher than manyother outsourcing locations.

    * Source: PayScale, Sourcingline, March 2010

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    Cost competitiveness Cont.

    Source: PayScale, Sourcingline 2010

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    Resources and skills

    Large English-speaking workforce

    Workforce size: 1,430 million; second only to China and

    three times the size of the United States (CIA Factbook

    2009).

    University Annual graduates: 2,700 thousands; 16%

    focusing on science and technology (UNESCO,

    NASSCOM, SourcingLine, 2009).

    Adult Literacy: 54 % of population (UNESCO 2009)

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    Resources and skills Cont.

    Source: CIA Factbook 2009

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    Business and economic environment

    Economic competitiveness: 4.3 GCI score; India is in the

    bottom quarter with the likes of Indonesia, Egypt and

    the Ukraine.

    Infrastructure: Quality of roads: 3.3 index (1-7)

    Infrastructure: Quality of electric supply: 3.1 index (1-7)

    Economy: Macroeconomic stability: 4.5 GCI score (The

    Global Competitiveness Report 2009)

    Regulation: Overall ease of doing business: 134 rank (1-

    183) (Doing Business, World Bank 2010)

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    Economic Competitiveness

    Source: The Global Competitiveness Report 2009

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    Key Benefits of Outsourcing from India

    Main destination where companies looking to outsource IT

    functions.

    India as a global IT service provider

    1. Significant cost savings, up to 80% in certain cases.2. Better resource allocation

    3. Availability of a large pool of highly skilled andmotivated professionals/work force.4. India has a time advantage including 24/7 concept and

    being ahead of the US and European time zones.5. The internal manager is partly freed from control over

    setting objectives and monitoring employeeperformance especially in case of large organizations.

    6. Encompass access to technology and expertise andExpertise in world-class solutions.

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    Tremendous growth of the Indian IT-

    BPO (Business Process

    Outsourcing) revenues:

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    FY2012 A milestone year for Indian IT-BPO industry-aggregaterevenues cross the USD 100 billion mark, exports at USD 69 billion.

    Within the global sourcing industry, India was able to increase itsmarket share from 51 % in 2009, to 58 % in 2011, highlightingIndia's continued competitiveness and the effectiveness of India-based providers delivering transformational benefits.

    An employment generator In FY2012 expected new jobs 230,000.

    Direct employment 2.8 Mn peopleIndirect employment 8.9 Mn people

    As a proportion of national GDP, the sector revenues have grownfrom 1.2 % in FY1998 to an estimated 7.5 % in FY2012.

    The industry's share of total Indian exports (merchandise plusservices) increased from less than 4 % in FY1998 to about 25 % inFY2012.

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    Top Five Indian IT Services Providers

    Company 2011 GlobalRank

    2010 Revenue 2011 Revenue 2010-2011Growth Rate (%)

    2010 MarketShare (%)

    2011 MarketShare (%)

    TCS 16 6,980 9,031 29.4 0.9 1.1

    Infosys 26 5,328 6,279 17.8 0.7 0.7

    Cognizant 27 4,408 5,875 33.3 0.6 0.7

    Wipro 31 4,752 5,335 12.3 0.6 0.6

    HCL

    Technologies

    46 2,627 3,316 26.2 0.3 0.4

    Total 24,095 29,836 23.8 3.1 3.5

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    Major Players in the Industry Shifting

    Business to India

    Example 01: U.S. IT giant IBM employs over

    426,000 workers globally especially to India.

    Example 02: IBM's competitor HP has over

    324,000 employees in over 50 countries. More

    than one-third of its employees in the HP

    Services unit are based in India.

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    Challenges an Indian service provider

    would face in the future:

    1. The need for climbing out of their comfort zoneof achieving operational excellence to drivingtowards innovation.

    2. The focus on marketing their services worldwideas they go global.

    3. Gaining larger footprint on the world map.

    4. Understanding what is happening on the groundwhile the company is expanding.

    5. Be aware of changes happening around theworld that can effect the end-user of thecustomer. Example; the spread of broadband,etc.

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    India as a global education service provider

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    The education sector in India is also considered as one of the

    major areas for investments

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    India Privet Sector Education

    The private education sector is estimated to reach US$ 70

    billion by 2013 and US$ 115 billion by 2018, according to

    consulting firm Technopak. Technopak sees enrollments in K-

    12 growing to 351 million, requiring an additional 34 million

    seats by 2018. This equals US$ 80 billion at US$ 2400 a seat.

    The vocational segment has emerged as a US$ 2.6 billion

    market that is expected to grow rapidly into one worth US$

    3.6 billion by 2012, growing by a CAGR of 25 per cent,

    according to a report 'Education in India: Securing thedemographic dividend,' published by Grant Thorton.

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    India now have a unique learning

    experience by providing free services

    GIIB (Global Indian International School) established under

    the foundation and guiding principles it is an international

    network of award winning institutions with 20 campuses in 7

    countries. Known for their learner centric and skill based

    teaching methodology. GIIS School offer holistic learning andpersonality development opportunities for students.

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    India now have a unique learning experience by

    providing free services

    GIIS is a preferred international school offering IBDP

    (International Baccalaureate Diploma Programme

    International General Certificate of Secondary Education

    (IGCSE), Central Board of Secondary Education (CBSE) and etc.

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    List of References

    Bodhtree (2012). Global solutions for a shrinking planet. [online]. Bodhtree. Last accessed 03 September2012 at: http://www.bodhtree.com/IT-services.php

    Gartner. (2012). Gartner Says Top Five Indian IT Services Providers Grew 23.8 Percent In 2011. [online].

    Last accessed 04 September 2012 at: http://www.gartner.com/it/page.jsp?id=2007116

    Hunker D. (2012). 15 Top Global OutSourcing IT-BPO Service Providers Based on Revenues. [online]. Last

    accessed 03 September 2012 at: http://seekingalpha.com/article/603061-15-top-global-outsourcing-it-bpo-service-providers-based-on-revenues

    NUTS ITLAB (2011). Outsourcing Overview. [online]. NUTS ITLAB. Last accessed 03 September 2012 at:

    http://www.nutsitlab.com/Outsourcing_overview.html

    Razdan A. (2010). Global Services: Indian Service Providers Gather to Discuss Priorities. [online]. Last

    accessed 04 September 2012 at: http://archive.globalservicesmedia.com/Strategies-and-Best-

    Practices/Governance/Indian-Service-Providers-Gather-to-Discuss-Priorities/24/14/0/GS100215548067

    OIFC (2009). Education in India . [online]. Last accessed 04 September 2012 at:

    http://www.oifc.in/Sectors/Education

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    Wikipedia . (2012). Literacy in India.[online]. Last accessed 4 September 2012 at:

    http://en.wikipedia.org/wiki/Literacy_in_India#The_British_Period

    GIIS Wall of Fame. Global Indian International School. [online]. Last accessed 4 September 2012 at:

    http://www.globalindianschool.org/

    SourcingLine (2012). Global Services & Outsourcing Locations. [online]. SourcingLine. Last accessed 03

    September 2012 at: http://www.sourcingline.com/outsourcing-location/india

    Wikipedia (2012). Business process outsourcing in India. [online]. Wikipedia. Last accessed 03 September

    2012 at: http://en.wikipedia.org/wiki/Business_process_outsourcing_in_India