IT WORLD FORUM: SMAC FOR BUSINESS TRANSFORMATION

New Delhi, 30th April 2014

R Chandrashekhar, President, NASSCOM

Highest relative industry share in national GDP

Largest share in total services exports

Offsets nearly half of India’s oil import bill

IT-BPM industry: All pervasive impact on India

Highest attractor of PE/VC investments

Largest private sector employer

Largest private sector women employer

Promoting Balanced regional growth

Spearheading the Indian MNC story >60Cross border M&A,28% share in total

$2.4 bn47% share in total

investment

99 IT-SEZs in Tier II/III44% share in total

>1 mn

Highest net value add sector

FY2015: Continued momentum, optimistic outlook

IT-BPM Export revenues*

Growth of 13-15%

E: Estimate, P: ProjectedSource: NASSCOM

IT-BPM Domestic revenues*

Growth of 9-12%

USD billion

INR billion

Customer Outlook

• 78% of decisions makers feel confident of planning for investment and growth in 2014

• Global IT spending projected to grow fasterin 2014- IT by 3.9 per cent, BPM by 5.9 per cent; increased contract volume for global sourcing

Indian IT-BPM Sector

• Exports expected to grow by 13-15 per cent, domestic by 9-12 per cent in FY15; revenues to cross USD 130 Billion

• Industry priorities- a) Help clients go digital, b) Understand and acquire new customers for clients, c) Grow their business

• Transformational outsourcing (value, technology, innovation and cost) will drive future growth

3

Created significant impact for customers

Savings of USD 200 Billion for clients in last 5 years

Solutions from India 50 per cent faster time to market for clients

Average client productivity up by 20-40 per cent

Over 70 per cent clients have derived global emerging market solutions from India

Source: NASSCOM

USD 120 Billion invested by clients in new, high return projects

Clients able to ramp up 30 per cent faster in India

100 per cent of clients have gained productivity improvements from India

SMAC for Indian IT-BPM industry: Driving incremental growth

5

• Social influence moves beyond ‘like’to incentive driven recommendations

• Social media impacts business infrastructures

17-19%

34-35%

33-36% • Creating actionable and predictive analytics from diverse data-sets

• Competitive advantages over rival organizations and result in business benefits, such as more effective marketing and increased revenues

15-17% • Adoption of benefit administration services due to ‘Obamacare’

• Enabling SMBs to challenge the market dominance of big businesses

5

USD billion

• Bring together elements for thought process based on the behaviour and buying trends of customers

• Build valuable leads of potential customers

• Productivity/Efficiency improvement• Customer satisfaction• Real-time connectivity• Consumerisation of IT• Employee/External stakeholder

demand

• Productivity improvement• Process improvement• Streamlining operations• Innovative product/service

development

• Driving consumerisation of IT• Accelerate reinvestment of IT cost

savings by clients• Leveraging cloud to drive market

facing differentiation

• On demand channel for real time communication & connection between enterprises and customers

• Setting new imperatives for operational efficiency and customer engagement

Digital Enterprises: The only firms that are guaranteed to succeed

Source: Accenture, NASSCOM

BENEFITS TO CUSTOMERS

• Real time customer engagement & superior customer experience

• Leverage collective Intelligence of employees, partners and customers

• Provide anywhere, anytime business transactions and contextual information

• Offers digitally intelligent products, solutions and services

• Predictability in its business value chain

• Align with Gen Y culture of employees, partners and customers.

SOCIAL MEDIA MOBILITY ANALYTICS CLOUD

REAL TIME CAPABILITIES

KEY COMPONENTS

7Source: NASSCOM

Digital Enterprises: Snapshot

• Digital technology re-imagining businesses to create a ‘Digital Enterprise’• Firms leveraging the maturation and convergence of Social, Mobile, Analytics/Big Data, Cloud and the Internet of

things to drive this agenda

PILLARS OF DIGITAL ENTERPRISE

SOCIAL

MOBILITY

ANALYTICS

CLOUD

• Evolving behaviour and buying trends of customers

• Build potential customer leads

• Productivity & process improvement• Streamlining operations• Innovative product/service development

• Customer satisfaction• Real-time connectivity• Employee/external stakeholder

demand

• Accelerate reinvestment of IT cost savings by clients

• Drive market facing differentiation

• SMAC reshaping businesses; consumers and all traditional approaches- the foundation for a Digital enterprise

• Customer behaviour, satisfaction –core theme for evolution

• Move to the next orbit of innovation with consumerization of IT

• Offering creative solutions - move to higher-margin business-creating a growing digital ecosystem

• Indian vendors expected to generate over $225 billion in SMAC related revenue by 2020

Convergence of mobility, cloud, analytics and social media presents further unique opportunities

• Communication, collaboration, and commerce providing a real-time source of consumer and employee sentiment

• Mobile social media solutions can also be used to create collaborative applications for employees

• Cloud social media analytics listens to social media sites like Facebook, Twitter, YouTube to analyse customer sentiment

• Social network and Cloud computing integration is used to host Social networks or create scalable applications within the Social network

• Distributed computing, virtualization, ubiquitous networking, and scalable access to specialized resources

• Mobility cloud allows enterprises to convert capex to opex, and enhance virtual computing power

• Improved visibility to drive operational efficiencies, guiding decisions, yielding new insights, and predicting what’s next

• Mobile analytics and business intelligence solutions allow executives to make decisions on the move

Mobility Cloud

Mobile Analytics

Cloud Social Networking

Mobility Cloud

Analytics

Social

Companies that purposefully combine two or more of these emerging technologies can create fundamentally new ways to serve their markets

Mobile Social Networking

The integrated Social Media Analysis and Reporting Tool of Cognizant, iSmart, listens to social media sites like Facebook, Twitter, YouTube, crawls through web, extracts data from emails, PDF, text and excel files to analysecustomer sentimentBuilt on Big Data Platform making it a highly scalable solution.It uses Natural Language Processing and Machine Learning Algorithms to identify, process and classify the sentiments. Not only recognize the overall sentiment for a product/ brand / service , but also to identify the reasons for sentiment

The digital wave –defining business, defining India

•SMAC reshaping businesses, consumers and all traditional approaches - the foundation for a Digital enterprise

•Consumerization of IT driving growth

•Start ups setting the pace in SMAC solutions

•Opportunity for big companies to leverage start ups to expand and enhance global footprint

Source: NASSCOM

Entrepreneurial startups infusing energy and innovation

~500 ~400+

eCommerce Education

250+

MPE, Retail,Travel &

Hospitality

120-150

Telecom, Real Estate

Manufacturing

100+

Agriculture,BFSI, Energy, Govt,

Healthcare

Diverse start-up landscape (Number of firms)

Collaboration between large companies and startups

Emerging players~1,000-1,200

Small sized~15,000 players

Increase in start-ups focusing on solutions around SMAC

~150-200 ~750-800 ~800-900

Hardware and Devices

Internet/Web SMAC

• ~3X growth in new firms set up post 2005• Bengaluru – one of the Top 20 startup ecosystems

globally• Verticals- Education & retail gained significant

traction

INDIA: FAST GROWING DIGITAL ECONOMY

Mobile

130million

920 million telecom subscribers

40 million smartphones

213 million internet users

India 3rd fastest growing app market

300 million+ app downloads

INR 300 crore+ app market

Ecommerce revenues in 2013- USD 13 billion

4 year CAGR growth- 36 per cent

Social Media: Improving user experience, reach and engagement

12Source: NASSCOM, e-marketeer

12

Drivers & Trends

•Offers differentiated ability of gauging customer opinion to support marketing objectives and customer service activities

•Translate into a revenue mechanism that affects the profitability of the business

•Not a standalone activity, rather a part of digital marketing strategy

•Bring together elements for thought process based on the behaviour and buying trends of customers

•Marketing campaigns and strategies link to the ROI

128

247

2013 2016

Social Media users in India (Million)

66 million

Urban Users

India

2013

97% on Facebook

1: http://hbr.org/web/slideshows/social-media-what-most-companies-dont-know/6-slide

SMAC: The pillars of digital transformation

Impact is highly evident

•Create a new digital operating model and transformation to a permeable enterprise

•Engagement with a growing digital ecosystem

•Empower enterprises to embrace emerging technology trends and to benefit from the value expectations of customers

•Innovative thinking in business and enterprise architectures

§SMAC: A business reality

üSocial, mobility, analytics and cloud are reshaping the business, the consumers and all traditional approaches, Indian Industry has seen till now

ü Movement towards the next orbit of innovation with consumerization of IT

üOpportunity to move to higher-margin business by offering creative solutions

ü Help businesses grow dynamically instead of increasingly cutting margins for typical IT contracts

üLaunching luxury product lines that comprise the SMAC suite of technologies to go the next level

§ Huge potential for revenue generation

üIDC Indian IT vendors expected to generate over $225 billion in SMAC related revenue by 2020

Drivers/ factors contributing to thechanging landscape of Technology

TransformationRemodelling business processes through harmonizing technology

advancement

TransformationRemodelling business processes through harmonizing technology

advancement

Client- specific outcomesA meaningful change in the business

requirements i.e., end-to-end solutions

Client- specific outcomesA meaningful change in the business

requirements i.e., end-to-end solutions

New paradigm for businessEfficiency, Enhanced customer

experience, Reduced time to market, Connectivity, IT Consumerization

New paradigm for businessEfficiency, Enhanced customer

experience, Reduced time to market, Connectivity, IT Consumerization

Mobile payments Smart cities Connected Health Pivot merchandisingmBanking mHealth Smart Buildings mGovernance Platform-as-a-Service

Source: NASSCOM

Collaborative Strategy to transform India

Collaborate

Collaborate ConnectConnect

Co-Create

Co-Create

Domain

Domain

Prioritize domains based on

• potential size

• possible impact

• readiness of leadership

•Role of government

Identify relevantpartner associations

• Common vision

• Willingness to commit time and resources

• Industry participation

Build Councils •Domain (Sectoral) and IT industry members –to jointly define agenda, budget and priorities

Identify key focus areas and jointly build programs that enable this

Health is the first sector taken up under this strategy

Social Entrepreneurship Education and

Skills

Internet and Mobile

Security

Healthcare

Banking

Mobile payments, financial inclusion

Smart Meters, Supply Chain

Connected Consumers

School learning, vocational skills

Enable scale for

innovative solutions

Cyber security

Health records, National Rural Health Mission

… and many more opportunities

E-Governanc

e

Citizen services

Infrastructure and Logistics

15

Transforming India across sectors

Add Electronics &Telecom + Social entrepreneurship

THANK YOU

R Chandrashekhar, President, NASSCOMpresident@nasscom.in