In spite of the global slowdown and the recent pressure on billing rates in the information technology-enabled services (ITES) and business process outsourcing (BPO) companies, the Indian ITES industry was confident of achieving the projected $21-24 billion exports by 2008.
This was stated by Manish Kejriwal, principal consultant at Mckinsey & Company, at the India IT Forum, a three-day conference organised by the Confederation of Indian Industry (CII) here, today.
The ITES exports had grown from $70 million in 1999 to $2.4 billion in 2002 and were expected to contribute 24 per cent of the IT exports in the current fiscal, he said.
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Most of the Indian IT-enabled services and business process outsourcing companies were concentrating on customer relationship management-related activities, while there were opportunities existing in finance, administration, human resources, content development and payment services, Kejriwal said.
The labour-cost advantage is likely to exist for the next 15-20 years. Meanwhile, the domestic companies should go away from voice to non-voice segments in utilities, automotive, hotels, entertainment, aerospace and pharmaceuticals, he added.
While companies like Infosys and Wipro are growing at over 30 per cent per annum, secondary players, like Hexaware and NIIT, are growing at a meagre 2 per cent. The larger players were rapidly achieving scale because of their reference base, high talent, defined methodologies and global reach, Kejriwal said.
The five key issues that needed to be addressed by the government and the IT-enabled services industry included potential scarcity of talent, high telecom rates and unreliable infrastructure, long set-up time, uncertain regulatory policy and lack of ready infrastructure, he added.
James Dodd, chairman of London-based communication solutions provider, ETT, warned that convoluted licensing process in India with multiple authorities will hinder the growth of the IT-enabled services industry. Larger lead time in commissioning of telecom services, forex restrictions, seamless connectivity, lack of formal platform to interact with potential players, were some of the challenges India needed to address, he said.
Alok Sethi, chief operating officer of Bangalore-based MsourcE said high attrition rate of employees, stereotype skill sets, emerging competition from Mexico and Malaysia, were the key challenges for the industry.
He added, the industry needed to adopt geographic diversification, inorganic growth, balanced services portfolio and partnerships with clients.