b-10. sector - ites
TRANSCRIPT
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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.
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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.
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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
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Indias value proposition
P PRODUCTIVITY
Q- QUALITY
R- RATES
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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
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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
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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
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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
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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
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ENTREPRENEURIAL OPPORTUNITIES
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Booming economy & GDP expected around 8%
Government initiatives & incentives offered
Low entry barrier but fierce competition
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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
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THANK YOU