IT Enabled Services In the elite league. IT Enabled Services. India - An Overview Market and Growth Potential Players Opportunities Why India? Contact in India. India - An Introduction. Population States/UTs Geographical Area Languages recognised Business language - PowerPoint PPT Presentation
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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.
6th largest energy consumer
USD 133 bn (February, 2005)
GDP growth to continue between 6-8%
3rd largest economy by 2050: Goldman Sachs
Leading in IT & BPO
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 3rd largest economy by 2010.
Moser Baer - among the top three media manufacturers
in the world
100 Fortune 500 have set R&D facilities in India
including GE, Delphi, Eli Lilly, HP, Heinz and Daimler
Indian industry has a story to narrate to the world in almost
- Hero Honda is the largest manufacturer of motorcycles.
- India`s Pharmaceutical Industry is the 4th largest in the
- 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.
7% of GDP
35% of exports
IT Enabled Services sector has emerged as a key driver of
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
- 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
Specialised, Vertical-specific areas like
- Data processing
Source: International Data Corporation (IDC)
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%.
Current relative importance
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
- As per IDC estimates, the Human Resources activity will represent
the highest revenue opportunity for Indian companies going
- 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 is 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
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
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
Global quality standards -Six sigma, COPC, ISO 9001
Healthy mix of MNCs and Indian companies
More than 210 companies registered with NASSCOM
Indian IT players have in fact already made great strides in the
- 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,
- 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.
Share of ITES-BPO sector in total revenues of India`s
IT software & services industry has increased
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.
Growth of 40%
The ITES/BPO segment is estimated to be one of the most significant
business opportunities for the Indian software and services
- 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.
Contribution of IT Enabled Services in total IT
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
- 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
- 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
- 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.
Breakup of Costs for India (USD Cost/ FTE)
Source: UN, Morgan Stanley
India’s main competitive advantage in IT enabled services is
abundant, high quality and cost-effective pool of skilled
and engineers, backed by government support.
Partnership Driver - Skilled Manpower
Global Growth in Working-Age Population (15~64) Over the Next Six
Availability of Skilled Manpower, 2003
Availability of Qualified Engineers, 2003
10 = High
1 = Low
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
Indian companies offer 20 % higher productivity in comparison to
other competing countries like Philippines, Canada and
- In terms of quality of services offered, India stands 30 % higher
than any other region.
Internet and IPLC connectivity on same LAN
Duty-free imports of capital goods
Income tax exemption on exports
Fast track approval for projects
Relaxation in regulations
100% FDI in Call Centers
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
Concessions in taxes and various fees
Latest technology for infrastructure
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 :
- Data Protection and Consumer Privacy Act being formulated to
reassure ITES companies and their customers of safety of their
- Plans for setting up a virtual institute for ITES training
- Special packages proposed for projects exceeding investment of
US$ 11 million.
- 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
India - An offshore destination
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
- New opportunities are now emerging in the Indian BPO
- The Indian BPO industry has extended its lines of service to
value-added areas like :
- package software implementation
International Youth Centre
Teen Murti Marg
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
249-F, Sector 18,
Six Years (Mln)