Industry AnalysisIT & ITES

NARENDRA SINGH # 14 AGNIWESH KUMAR SINGH #15

Agenda

• Introduction

• Evolution

• Major Players

• NASSCOM at a glance• Growth in IT & ITES

• SWOT analysis

• Problems and prospects

Evolution

IT– 1968: The Tata industrial conglomerate forms software services unit

Tata Consultancy Services.

– 1994: Telecom liberalized.

– 1999: Y2K contracts pile into India.

– 2003: Led by service conglomerates such as Wipro, TCS and Infosys,

India becomes a primary destination.

Evolution

ITES

– First Phase : MNCs establishing units in India (Pre 1997)

– Second Phase : Entry of established software co. (1997 – 2002)

– Third Phase : Geographical dispersion of Activities (2002-2004)

– Fourth Phase : Move towards acquisitions ( 2004 – Till now)

Major Players

• Infosys - started in 1981 by seven people with US$ 250 Today, it is an IT and consulting with revenues of over US$ 4 billion. Infosys and its subsidiaries have 105,453 employees as on September 30, 2009.

• TCS - Established in 1968, TCS has grown to its current position as the largest IT services firm in Asia, it has the revenues of over US$ 4 billion in 2008-09. Total employee strength at 111, 407.

• Wipro - Revenue of IT Services was $4.3 billion, in 2008-09.

• HCL Tech. - Started in 1998, net profit was Rs. 1348 Crore in 2008.

NSSCOM at a glance

NASSCOM at a glance

• Its was set up in 1988, with 36 members. It

comprises 1246 members in 2008.

• Membership base constitutes over 95%of the

industry revenue.

• Employs over 2.24 million professionals.

Growth in IT & ITES

• It started with the onset of globalization in India during the early 1990s

• Indian IT-BPO grew by 12 per cent in 2008-09 to reach US$ 71.7 billion in aggregate revenue.

• The Indian IT-ITes industry grew at a rate of 32 per cent in FY2008

Growth in IT & ITES

• IT services contributing to 57 per cent of the total software and services exports

• Total IT-BPO industry to reach USD 71.7 billion accounting for 5.8% of India’s GDP

• Domestic IT services spends grew at over 43 per cent in FY2008

Growth in IT & ITES

Service areas• Finance

• HR,

• Administration,

• Healthcare,

• Biotech research

• Telecommunication and manufacturing

• Customer care,

• Web sales/marketing

• Back-office operations.

Swot Analysis (Strength)• Cost competitiveness

• Favorable time zone

• Broad skill sets of Indian computer professionals

• Telecom and IT infrastructure on par with global standards

• Amicable demographic environment

• Foreign investor friendly tax structure for ITES/BPO industry

• Large English speaking work force

• Low wage levels of the Indian labor force

Weakness

Major share is focused for

services not R& D.

Major dependency on foreign

countries.

Scare foreign language skills other

than English.

High Attrition rate.

Opportunities

• Time zone difference between India and

target markets

• Increasing awareness of other foreign

languages.

• Increasing awareness of outsourcing services.

Threats

• High billing rates.

• Political instability.

• Emergence of the competitors.

• Changes in the policy in the destination

countries.

Problems and prospects

Increasing Labor cost

Emergence of other

countries.

Manpower Shortage

Outsourcing backlash

Cost ompetitiveness

Broad skill sets

Infrastructure

Well developed IT

industry.

THANK YOU