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Indian
IT, ITeS sector to top $36 billion in
'06
Nasscom's
Strategic Review 2006, which reviews the Indian IT sector's
performance in 2005, estimates the growth in FY2006 to exceed
$36 billion. It details the various trends in various segments
of IT last year, assesses India's competitiveness as a
sourcing destination, analyses the sustainability of the
factors contributing to India's IT leadership position and
provides projections for global and Indian
IT-ITeS.
Highlights
of the Strategic Review 2006:
-
IT-ITES sector to contribute to 4.8 per cent of GDP in
FY06.
-
Steady growth: The Indian IT-ITES expected to exceed $36
billion in annual revenue in FY06, an increase of nearly 28
percent in this current fiscal.
-
Indian IT-ITES sector on track to achieve the targeted $60
billion in exports by FY 2010.
-
Exports to account for nearly two-thirds of the total
revenues.
-
28 per cent of the suitable talent available across all
offshore locations (outranks the nearest destination by a
factor of 2.5).
-
Engineering and R&D, software products hold significant
opportunity for India -- growing at
37 per cent and 43 per cent (CAGR FY 2003-06E),
respectively.
Employment
trends:
*Total
IT software and services employment to reach 1,287,000 in
FY06.
*Industry
has already initiated several initiatives to further enhance
the availability of and access to suitable talent for IT-ITeS
in India.
*A
comprehensive skill assessment and certification programs for
entry-level talent and executives (low-middle level
management) launched.
*An
image enhancement programme to build greater awareness about
the career opportunities in this
segment.
*Nasscom
is working with the academia across the country to encourage
and facilitate greater industry
interaction.
Growth
of domestic market: Complementing the continued growth in
IT-ITeS exports is a growing domestic market. Domestic market
coming into its own, to grow by nearly 22 per cent in FY 2006.
Strong demand over the past few years has placed
India amongst the
fastest growing IT markets in the Asia Pacific region. Growth
in the domestic market is witnessing the early signs of
service line depth that characterises maturing markets. Global
product companies are also looking to introduce localised
versions of their software products to drive usability and
penetration. Several large domestic contracts announced last
year were won by MNCs.
Projections:
For
India to fully
capitalise on the opportunity and maintains its distinctive
lead amongst offshore destinations in the global IT-ITES
space, study suggest to focus on five key
areas:
-
Enhancing the talent pool advantage -- focus on skill
development to better leverage the worlds largest working
population.
-
Strengthening urban infrastructure in existing (tier I) and
emerging (tier II and tier III) cities and continued emphasis
on proactive regulatory reform to facilitate greater ease of
doing business.
-
Driving a philosophy of operational excellence amongst
industry players (across the board) to ensure that
India based
delivery sustains world-leading benchmarks in
performance.
-
Catalysing domestic market
development.
-
Actively promoting an uncompromised agenda towards global free
trade.
Transition
from outsourcing to global sourcing to drive the next phase of
evolution in process quality frameworks and practices. Having
aligned their internal processes and practices to
international standards such as ISO, CMM, Six Sigma, etc.,
companies in India are seeking
to further increase of quality and productivity benchmarks by
introducing adaptations more suitable for remote service
delivery. Traditionally India-centric, indigenous players
beginning to build noticeable presence in other locations --
through cross border acquisitions and organic growth in other
low-cost locations. |
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 Top
Stories
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82%
of Canadian firms planning Asian
expansion
According to a
recent study by the Asia Pacific Foundation (APF) of
Canada, a
significant number of Canadian companies are expanding their
investments in Asia to
leverage the low cost advantage of offshore outsourcing.
However, the companies are not investing to boost their
competitiveness in the Canadian markets, but to compete better
in the US. Two-thirds of
Canadian companies surveyed are expected to increase their
investment in Asia over the
next year.
Firms
fail to maximise offshore benefits -says Capgemini
study
UK firms will
offshore almost a quarter of their IT operations by 2008 as
they continue to seek to cut costs, according to a new report
this week from IT services giant Capgemini. As per the
industry vertical, the survey finds that presently financial
services manage 75 percent of IT delivery internally and tend
to outsource very little. Telecom companies are choosing to
withhold only 35 percent of IT management in-house.
Transportation & Logistics and Manufacturing tend to
outsource major parts of management of IT
delivery.
UK
call centre industry grew by 5.5 per cent in 2005 - Says
Study
ContactBabel
forecasts retail sector will overtake the financial services
sector as the highest user of call centres, accounting for
more than 700 of the UK's 5,200 call
centres by 2008. This expansion in the retail sector will be
driven by the increase in telephone support required by
internet shoppers.
BBC
appoints Capita for ten year HR outsourcing
contract
The BBC
expects to save in excess of £50m over the life of the
contract. Under the new contract Capita will deliver a full
range of HR services to the BBC including recruitment; the
administration of pay (excluding pensions); some aspects of
staff development; occupational health and other services. The
contract with Capita is due to become operational from April
2006, subject to contract signature.
Citigroup
Inc enter into a software outsourcing agreement with TCS &
Satyam
The deal is
estimated to be between $125 million and $150 million on an
annualised basis. On an average split of 30% onsite work and
70% offshore and wages of $10,000 per month onsite and $4,000
per month offshore, the deal is estimated to be around $150
million. TCS gets chunk of it while Satyam also gets a
portion. According to Citigroup executive Mitchell Habib, the
software-services contract would require 2,200 employees
Bank
of New York selected by Barclays Bank PLC for trust and agency
services.
The Bank of
New York (BoNY) has been selected by Barclays Bank PLC as
trustee, verification agent, registrar, and paying and
transfer agent for its GBP 5 billion collateralized loan
obligation (CLO). Earlier this week, BONY signed with JSC
Kazkommertsbank, Kazakhstan to
provide indenture trustee, registrar and paying agent services
for its $300 million debut diversified payment rights (DPR)
transaction.
Aon
Outsourcing Non-Retail Claims; Sells Off Large Claim Division
to Capita
Aon Limited's
strategy to realign its London-based business more closely
around client needs and core areas of expertise, Aon has
announced that it will be outsourcing its client operations
division. In addition, the company has also announced the sale
to Capita Insurance Services of its Aon Claims Management
unit, which handles large-scale delegated claims authority
business.
General
Motors Chooses Capgemini as IT Re-Sourcing
Partner
Capgemini
pursued six GM contracts and was awarded all six, including:
Enterprise-wide application integration management, which
provides enterprise-level strategic planning, architecture,
program management and verification/validation services.
Application integration management for the global purchasing
and supply chain area. Application integration management for
the global sales, service and marketing area. Application
integration management for the business services area. Sales
and marketing systems support. Dealer systems support.
DaimlerChrysler
to step up India R&D
outsourcing
DaimlerChrysler
is planning to significantly augment R&D works at
DaimlerChrysler Research Centre (DMRC) in Bangalore. DMRC undertakes
research in he areas of encryption, image signal processing,
telematics, fuel cell modelling, CAD, CAM, CAE and PDM, for the company’s
global requirements. Wilfried
Aulbur, MD and
CEO, DaimlerChrysler India, said. the
group's outsourcing of components like motors and crankshafts
from India is also going
to grow.
Heijmans
to outsource ICT to Atos Origin
By
transferring its ICT activities to an external party, Heijmans
expects to be able to respond more flexibly to the complex ICT
requirements needed for its innovative products, such as, for
example, Wenswonen™.
Dixons
signs five-year deal with BT
For an
undisclosed sum, BT will manage all DSG's data services,
including head office and store branch networks, and telephony
services, such as predictive dialling, inbound call handling
and speech recognition. |
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Service
Provider News |
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Global
Payments Inks Deal With Signature Card For Electronic Payment
Processing Services
Global
Payments will provide Signature Card Services with
comprehensive transaction processing services, including
authorization, capture, and settlement, as well as facilitate
BIN sponsorship for credit, debit, and Electronic Benefits
Transfer (EBT) card processing.
ACS
to Provide Consulting and Administration Services for Pension
Benefit Guaranty Corporation
Buck
Consultants, an ACS company has signed a contract with the
Pension Benefit Guaranty Corporation (PBGC) to continue
providing benefit consulting and administration services.
Capita
bags miners contract
Support
services group Capita looks set to bag its second major deal
of the week as the Department of Trade and Industry named
Capita as preferred supplier in the final stage of the
re-tender process for the contract to administer miners'
personal injury liability claims.
Accenture
set to win £500m Unilever contract
UNILEVER is
poised to award an outsourcing deal worth an estimated £500
million to Accenture, the management consultancy firm, The
Times has learnt. The Anglo-Dutch group confirmed yesterday
that Accenture was the front-runner to win the global
contract, which covers back-office functions for Unilever’s
“human resources, learning and procurement” operations. The
two companies are currently in a period of due
diligence.
Solera
to purchase ADP's claims processing
unit.
Automatic Data
Processing (ADP) has announced the sell-off of its Claims
Services Group (CSG) to Solera for USD 975 million in cash.
The sell-off is a part of ADP's strategy of streamlining its
business lines. ADP expects a one-time pretax gain of USD 600
million upon closing of the
acquisition.
JPMorgan
to buy Paloma's back office
operations
JPMorgan
Worldwide Securities Services said it bought the middle and
back office operations of Paloma, which includes functions
like trade processing, custody services, and monitoring
positions.
EDB
buys Norway's IT-consultancy co STI
EDB Business
Partner ASA said it has agreed to buy Norway's
IT-consultancy company Software Technology Integration AS
(STI) for up to 12 mln nkr. STI was established in 1997 and is
a certified Oracle partner
Xansa
to ramp up operations in India
Xansa, which
has 4,000 employees in India or about half
its total workforce, plans to add about 1,000 staff a year
over the next few years, Bill Alexander told
Reuters.
IBM
and Spector Sign Three-Year Outsourcing
Contract
Spector Photo
Group NV has chosen IBM as its outsourcing partner for the
Group's strategic digital expansion project. IBM will provide
hosting for the Imaging Group's various websites (under the
company's own brand names Spector, ExtraFilm, and Wistiti, and
under licensed brands such as Kodak Images), as well as
storage of digital images and the photography group's
infrastructure for processing orders on-line 24 hours a day, 7
days a week.
North
Carolina is canceling its contract with
IBM
US State of North
Carolina has cancelled a six-year, USD
78 million database development and management contract with
IBM. The contract was initially awarded to
PricewaterhouseCoopers (PwC) in 1999, but was transferred to
IBM when it acquired the consultancy firm in 2003. The
objective of the contract was to consolidate various student
performance databases into one database, which would have
benefited North Carolina Window of Information on Student
Education (NCWISE) project. |
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