8/8/2019 B-10. Sector - Ites

1/15

OVERVIEW

Global ITES-BPO Scenario

Indian ITES-BPO continues to grow from strength

to strength.

Continuing cost pressure & growingcompetitiveness is driving companies to look at

offshore outsourcing

Access to global talent, economies of scale, process

engineering and enhancements, wage arbitrage,increased profit margins and improvements in

quality are some of the gains that companies have

realized.

8/8/2019 B-10. Sector - Ites

2/15

The Indian ITES Scenario

(US $ bn) 2002-03 2003-04 2004-05

ITES-BPO 2.7 3.9 5.7

- Exports 2.5 3.6 5.1

- Domestic 0.2 0.3 0.6

- US remains the key market, accounting for over two-third of

the total ITES-BPO exports from India. Western Europe,primarily the UK, accounts for approximately 20 percent.

- Market segmentation: Customer care and support servicesremain the largest segment, accounting for 38 percent of the

sectors employee base and a third of its revenues.

8/8/2019 B-10. Sector - Ites

3/15

Some of the key drivers of the Indian ITES-BPOindustry include:

Competitive pressures on client organizations Ability of Indian vendors to ramp-up operations

rapidly

Widening breadth of services

Shift towards high-value services Sustained cost advantage - In spite of the rising

elements of cost, Indian offshore operations providecost savings of 40-50 percent

Delivery process enhancement and improvement

Access to an abundant skill pool - India has thelargest English speaking IT talent pool in the world- over 120,000 trained IT professionals andapproximately 3 million other graduates are addedeach year

8/8/2019 B-10. Sector - Ites

4/15

Indias value proposition

P PRODUCTIVITY

Q- QUALITY

R- RATES

8/8/2019 B-10. Sector - Ites

5/15

Trends in Indian ITES-BPO market

Continued market consolidation

High levels of absorption

Vendor maturity managing people risk

Maturity pricing and engagement models

Onshore expansion to strengthen global

delivery capabilities

8/8/2019 B-10. Sector - Ites

6/15

8/8/2019 B-10. Sector - Ites

7/15

8/8/2019 B-10. Sector - Ites

8/15

SWOT

Strengths Large English speaking population

Cheap labor cost

Quick turnaround time

Highly cost efficient as compared to Western countries

World Class Telecom Service

Weakness

Small players

Irrational pricing

High attrition

Margin

Infrastructure

Weak Brand

8/8/2019 B-10. Sector - Ites

9/15

Opportunities

Re-engineering process Expanding to other sectors

Unexplored markets

Threats

MNC stampede

Unable to Deliver

Backlash in US & Europe

Low capacity utilization

Newer entrants

New technology

8/8/2019 B-10. Sector - Ites

10/15

GOVERNMENT INITIATIVES

Following are the initiatives taken by state govt.

Jurisdiction to: work on National Holidays; allow

women to work in night shifts; and offices to

function 24 hours a day, all through the year

Policies to create a trained pool of manpower

At state level IT Industry Employment Promotion

Scheme has been introduced

STPs & EPZs with world-class infrastructure

8/8/2019 B-10. Sector - Ites

11/15

Government incentives for the ITES/BPO industry

include the following:

A series of measures aimed at attracting foreign as

well as domestic investment in the sector

Abolition of license fees for entry into the industry

Permission for 100 percent foreign equityparticipation in shared service centers except those

that offer e-business services (wherein the foreign

equity participation is limited to 49 percent)

Introduction of a number of export-oriented

promotion schemes such as the Software TechnologyPark (STP)/Special Economic Zones (SEZ),

under which various direct tax and indirect tax

incentives have been offered

8/8/2019 B-10. Sector - Ites

12/15

ENTREPRENEURIAL OPPORTUNITIES

8/8/2019 B-10. Sector - Ites

13/15

Booming economy & GDP expected around 8%

Government initiatives & incentives offered

Low entry barrier but fierce competition

8/8/2019 B-10. Sector - Ites

14/15

Huge opportunity due to booming telecom, retailing &manufacturing sector

Following are some sectors with huge opportunities Insurance

Claim processing

Servicing

Call center operations

Retail Financial / Banking Services

Loan processing

Call center operations

Pharmaceuticals

Research & development Telecom

Call center operations

Billing

8/8/2019 B-10. Sector - Ites

15/15

THANK YOU