Source: E-mail dt. 5 November 2014
Indian IT - BPO
Performance: An Emerging Climate
Mr. C. Arul Venkadesh
B.Sc., M.B.A.
(HR), M.B.A. (ED), PGDPM (IRLW).,
Assistant
Professor,
Rathinam Institute
of Management,
Coimbatore,
India.
Dr. R. Karuppasamy Ramanathan
M.Com. MBA., M.Phil., Ph.D., PLME(IIM-A)
Director, Nehru Institute of Technology,
Coimbatore, India.
Indian IT-BPO performance
The sector is estimated to
aggregate revenues of USD 88.1 billion in FY2011, with the IT software and
services sector (excluding hardware) accounting for USD 76.1 billion of
revenues. During this period, direct employment is expected to reach nearly 2.5
million, an addition of 240,000 employees, while indirect job creation is
estimated at 8.3 million. As a proportion of national GDP, the sector revenues
have grown from 1.2 per cent in FY1998 to an estimated 6.4 per cent in FY 2011.
Its share of total Indian exports (merchandise plus services) increased from
less than 4 per cent in FY1998 to 26 per cent in FY2011.
Exports
market: Export revenues are estimated to gross USD 59 billion in FY2011
accounting for a2 million workforce.
• Geographic focus:
The year was characterized by a consistent demand from the US, which increased
its share to 61.5 per cent. Emerging markets of Asia Pacific
and Rest of the world also contributed significantly
to overall growth.
• Vertical Markets: While the sector’s vertical market mix is well
balanced across several mature and emerging sectors, FY2011 was characterized
by broad based demand across traditional segments such as Banking, Financial
Services and Insurance (BFSI), but also new emerging verticals of retail,
Healthcare, Media and Utilities.
• Service Lines: Within exports, IT Services segment was the fastest
growing segment, growing by 22.7 per cent over FY2010, and aggregating export
revenues of USD 33.5 billion, accounting for 57 per cent of total exports.
Indian IT service off erings have
evolved from application development and maintenance.
To emerge as full service
players providing testing services, infrastructure services, consulting and
system integration. The coming of a new decade heralds a strategic shift for IT
services organisations, from a ‘one factory, one
customer’ model to a ‘one factory, all customers’ model. Central to this
strategy is the growing customer acceptance of Cloud-based solutions which offer
best in class services at reduced capital expenditure levels.
The BPO segment grew by 14
per cent to reach USD 14.1 billion in FY2011. The year also witnessed the next
phase of BPO sector evolution - BPO 3.0 - characterised
by greater breadth and depth of services, process re-engineering across the
value chain, increased delivery of analytics and knowledge based services
through platforms, strong domestic market focus and SMB centric delivery
models. During the year, the BPO sector growth was affected by delayed decision
making and deal restructuring in the first half
of the year, though it picked up momentum in the second half. Changing demand
patterns led to revamp of operations for service providers - high focus on
client relationships, mining existing clients and restructured operations to
provide focused vertical solutions. Further, the industry focused on achieving
excellence in business process management, and delivering strong
transformational benefits creating revenue
impact for clients. The engineering design and products development segments
generated revenues of USD 9 billion in FY2011; growing by 13.6 per cent, driven
by increasing use of electronics, fuel efficiency norms, convergence of local
markets, and localized products. Increasing confidence
in relationships between customers and service providers successfully executing
a variety of activities across low-medium-high complexity projects has led to
increasingly larger sizes of projects being sourced from India.
Domestic market:
Domestic IT-BPO revenues
excluding hardware are expected to grow at almost 16 per cent to reach ` 787
billion in FY2011. Strong economic growth, rapid advancement in technology
infrastructure, increasingly competitive Indian organisations,
enhanced focus by the government and emergence of business models that help
provide IT to new customer segments are the key drivers for increased
technology adoption in India
References