Global Services Local Opportunities

Transcription

1 Global Services Local Opportunities Randeep Sudan Geneva April 23, 2007

2 IT & ITES Industry: Trends IT industry contributes $2.78 trillion in global revenues BPO was a $128.8 billion market in 2005 and is forecast to be a $191.3 billion market by 2010 (Gartner). $300 billion global addressable market for offshoring of IT and IT enabled services (McKinsey & Co.) Only 10% realized Growth Offshore IT industry growing at 21% IT enabled services at 49%

3 Blurring of Onshore, Nearshore and Farshore Locations Automobile manufacturer in Europe with suppliers across the EU Outsourcing of accounts payable Provider receives invoices from suppliers at a central location in Spain Invoices scanned and sent to facilities in India and the Philippines for processing payment Payment to suppliers facilitated by delivery centers in Spain and the UK

4 Global Delivery Locations Genpact, India US, Mexico, Hungary, Romania and China IBM, US China, India, Malaysia, Australia, Costa Rica and the Philippines ACS, US China, India, Fiji and Ghana

5 Thinking Global Invest where you get maximum returns, source talent from where it is best available, produce where it is most costeffective, and sell where the markets are, without being constrained by national boundaries. Narayan Murthy, Infosys

6 Gartner s Cool Vendors in IT Sourcing and Services 2007 Epitome Mumbai, India Complex quantitative analytics research for hedge funds, risk management and compliance settlement, fund accounting administration Kio Networks, Mexico City, Mexico World class data centers Procuri, Atlanta, Georgia, US Strategic sourcing, contract negotiation, supplier management, and spend analysis Protiviti, Menlo Park, CA Independent risk management (Sarbanes-Oxley Act audits)

7 Estimated addressable market in global offshore IT industry 2005 (USS$ billion) Current Penetration % Includes hw/sw maintenance, network administration and help desk Traditional IT Application development and maintenance System integration 3-4 Consulting (including network consulting) R&D sevices Total

8 Estimated addressable market for global offshore BPO (US$ billion) Current penetration % Insurance Retail Banking Travel & hospitality Auto mfg Telecom Pharma Others F&A/HR Total

9 Worldwide BPO Forecast (Gartner November 2006)

10 Potential Across the Value Chain Human Resources Payroll Processing Recruitment and selection support HRIS IT Services and Support Custom development Systems integration Hosting / maintenance Customer help desk / support Inbound Logistics Finance and Accounts Product Development Human Resources Management Technology Services Manufacturing / Operations Operations / logistics Order tracking Order / claims / application processing Payments processing Outbound Logistics Marketing and Sales Customer Service Sales / Marketing and Customer Service Tele-sales Order Processing Customer services and Complaints Help-desk Finance and Accounting Back-office Accounts payable/receivable Financial reporting Finance accounting Revenue accounting Research / Design and Development Clinical research VLSI design DSP chip design Avionics research Engineering design services Legal research Source: NASSCOM-KPMG 2004

11 Most Vulnerable? Source: Pain from Free Trade Spurs Second Thoughts, WSJ March 28, 2007 Selected occupations ranked by Princeton economist Alan Blinder as highly offshorable (total: 8.2 million workers) Occupations Number of US workers Computer programmers 389,090 Data entry keyers 296,700 Actuaries 15,770 Film and video editors 15,200 Mathematicians 2,930 Medical transcriptionists 90,380 Occupations Interpreters and translators Number of US workers 21,930 Economists 12,470 Graphic designers 178,530 Bookkeeping accounting and auditing clerks 1,815,340 Microbiologists 15,250 Financial analysts 180,910

12 ITO and BPO Industry Size in Outsourcing Destination Countries 2004 Source: neoit

13 AT Kearney s Global Services Location Index 2007

14 India s IT/ITES Performance ($ billion) Sector FY 2004 FY 2005 FY 2006 FY 2007E IT services ITES-BPO Engineering Services, R&D, Software Products Total Exports

15 Andhra Pradesh Population: 80 million Area: 275,000 sq kms Per capita (2006): Rs.25,625 ~$580

16 IT/ITES Exports from Andhra Pradesh Andhra Pradesh Source: STPI, Hyderabad

17 Key Factors Infrastructure Talent Pool Government policies Promotion Success stories Smart marketing

18 Key Factors Infrastructure Broadband IT Parks International Airport Electricity Urban infrastructure

19 Key Factors Engineering grads Talent Pool Management training International Linkages Company focused training Vocational training

20 Key Factors Incentives Deemed clearances Government policies Self Certification IT/ITES as essential services Exemptions from certain laws

21 Key Factors APFIRST Consultants Coordination with HYSEA Promotion World Economic Forum Media

22 Key Factors Microsoft GECIS Dell Computer Associates Success stories Hyderabad Cleanest City

23 Key Factors Smart marketing

24 Randeep Sudan Senior ICT Policy Specialist The World Bank