Industry Analysis

IT & 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
Cost ompetitiveness
Emergence of other
Broad skill sets
countries.

Infrastructure
Manpower Shortage

Outsourcing backlash Well developed IT

industry.
THANK YOU