Like many earlier initiatives that helped to spearhead the growth of the Indian IT Services and ITES-BPO industries, NASSCOM, the premier association of Indian IT Services and ITES-BPO companies approached IDC India with a fresh brief. The challenge was to design and conduct a study to gauge the current size and future potential and direction of the domestic IT Services and ITES-BPO markets.

The findings of the study more than justified the excitement of the IDC India research team, when viewed in the context of a whole new growth opportunity emerging in the domestic space for the Indian IT Services and ITES-BPO players.
The key learning from this study has undoubtedly been unearthing the current scale and the future scope of the domestic IT Services and the domestic ITES-BPO sectors, slated to touch INR 15,604 crores and INR 6,608 crores, respectively by end of 2006.

However, the Indian domestic IT Services market or the share of spending which goes to make up the revenues of India's domestic IT service providers, is estimated to be only 45% of the total IT Services spending of Indian businesses. The total spending on IT Services by businesses consists of payouts to a service provider plus salary and training costs of inhouse IT staff and the associated overheads.

For IT service providers this represents a great challenge and as well as an opportunity to develop and showcase their skills to domestic customers, and remove the commonly held perception that IT Services vendors have a lack of focus on domestic markets or that there is little return from outsourcing IT operations.
By eradicating the gap between real versus perceived value of IT outsourcing, vendors can play a critical role in helping the CIO showcase IT investments as a tool enabling strategic business advantage. The IT Services market in the country can thus gradually evolve from low-value, long-term service engagements through high-value, one-time service engagements on to high-value, long-term service engagements.

Another revelation from the current study was about the ITES-BPO space, which has been historically associated with exports. There is huge opportunity waiting to be tapped, as globalisation demands higher efficiencies and competitiveness from Indian businesses. Unlike the IT Services exports market where price arbitrage plays an important role, the domestic market will be driven more by access to specialist skills and helping businesses free up their scarce resources for focusing on core business activities.

IT Services and ITES-BPO players urgently need to work together with customers, government and other stakeholders to remove some of the perceived inhibitors and help develop a conducive environment for healthy, long-term growth of the domestic industry.

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Related Links
		The Indian Domestic IT Market: Rise Of A Juggernaut
		Study on the Domestic Services Market Opportunity
		NASSCOM to Enhance Focus on The Domestic IT Market

 

 

Updated on: 05 Oct, 2009