“However, facing the impact of the global economic crisis in the second half if 08-09, the industry is expected to economic environment, the Indian IT-BPO industry will see sustainable growth over the next two years and our estimates indicate the industry will clock revenue of USD 60 to62 billion by fiscal year 2011.”
If we notice, over the past four years India’s economy grew around9 per cent annum, spurred on by buoyant global growth. During this period Indians economic growth rate was second only to China worldwide. Give the security of the slowdown in global demand, merchandise export are unlikely to grow at more than 10 per cent in the current fiscal. Service exports, including those of the information technology and ITeS sector are expected to face weakening global demand over the next few quarter. The adverse impact of the slowdown is, however, likely to be less pronounce in Indian then in countries such as Singapore and South Korea, which are more export-oriented. Indians has also diversified its export basket, The Indian IT/BPO industry realized that to manage changing customer demands, tap new segments and after new service, it need to deliver service from multiple location across the world. The sector recognizes that it must provide customers with a complete global delivery model encompassing service delivery across continent, which assures clients of flexibility and scalability. Indians IT-BPO companies are addressing the key requirements of a global delivery model – a proven multilocation delivery track record, a diverse set of assets/IP/consistent processes and technologies depth and breadth of global skills, and an optimised network of centres.
Outsourcing to increase :
Even in the face of an economic recession, the potential for outsourcing to address not only immediate cost pressure but also a long term recovery goal is obvious. Through there will be increased price competition for outsourcing deals in the medium term, business outcome focused outsourcing is expected to drive the market.
The strong growth estimate for overall IT-BPO outsourcing is another indicator of the increased growth for global sourcing. The outsourcing segment of the IT services market is expected to grow at the compounded annual growth rate (CAGR) of 6.9 per cent and reach US $275 billion by 2012growing at the CAGR 11.9 per cent.
Within corporate IT spends, growth across the various segment is projected to be driven by steady Increase in aggregate spends, as well as a reallocation of budget from internal to external spending. This increasing cost adopting of outsourcing, coupled with the increasing of service adapted to lower-cost, remote/virtual delivery model, thereby While offshore-based service providers are leveraging local advantage to emerge as mayor outsourced services provides globally, existing global plased players have been increasingly ramping their delivery based in offshore location to provide enhanced and blended service than offer better value to their customers. The combination of both these factor will cause higher growth in global sourcing within outsourcing.
New Geographies and Sectors : The Indians IT-BPO industry currently derives 60 per cent its revenue from the US, and 41 per cent of revenue from the BFSI segment. While these markets are expected to grow also need further over time and attain maturity, the industry also needs to look a new verticals and geographical segment for grow. The Indian IT-BPO industry has very low penetration levels in geographical regions and vertical segment that account for a significant share of the market. Prime examples are the Nordic region (Sweden, Denmark, Norway, Finland and Iceland), Japan and China. While these geographic regions may not be that easy to develop, keeping in mind language and cultural differences, the Indian IT (BPO) industry, with its increasing global footprint needs to tap these regions for further growth, A key factor aiding this would be the shrinking working age populations in some these regions, Similarly, verticals such as Government, healthcare, construction and utilities are hitherto under-penetrated, with only one to three percent of total Indian IT-BPO revenues coming from them. These verticals need to be addressed with specifically developed solutions, leading to increased growth. Many in the industry opine that the slowdown in global economic growth which began in 2008 (and is expected continue well into 2009) will affect demand for IT/BPO services in the near term, as buyers look to curtail discretionary expenses. In the long term, however, the industry, with the significant advantages that it provides to clients, it well poised for growth.
Name: Girish Patel