On the back of a slowing global economy and pain in the BFSI sector, software body Nasscom today said IT-BPO exports are expected to grow at around 16-17 per cent (against the earlier 25-30 per cent growth estimates) to clock $47 billion in FY09.
IT-BPO exports comprise over 90 per cent of the total Indian IT revenue (including hardware and domestic sales). The US and UK account for over 80 per cent of the revenues of most Indian IT services firms. Moreover, the BFSI sector accounts for almost 40 per cent of the revenues of this sector. Since the US & UK are among the most-affected regions, and the BFSI sector is yet to gain composure following the collapse of major banks, it was widely expected that Nasscom would revise its targets downwards from the earlier $50 billion software exports estimate for FY09.
Nasscom added that the Indian IT-BPO industry will see sustainable growth over the next two years and clock revenues of $60-62 billion by 2010-11. This figure, too, has been revised downwards. Earlier, the growth was begged at $60 billion by 2010.
The aggregate revenues (hardware and domestic sales included) of the IT sector are expected to touch $60 billion by FY09. The domestic IT-BPO market in India will cross Rs 111,000 crore by FY2009, exhibiting 20 per cent growth rate.
"The year 2008-09 has been challenging for economies across the globe. However the Indian IT-BPO industry has exhibited a balanced growth. We are hopeful that the government will continue to recognise the contribution of this sector and will stimulate investor confidence and growth by extending fiscal incentives to this industry and boosting domestic IT spend through the allocated IT budgets," said Ganesh Natarajan, chairman, Nasscom.
Europe, Asia Pacific and rest of the world has grown more than the US, reaffirming geographical diversification as an encouraging trend for the industry. The Indian industry has made global footprint in over 400 delivery centres across 52 countries and this strategy of geographical diversification will also help the industry take forward its competitive edge. In the next 20-24 months, the industry should focus by organisations on productivity, benchmarking, and enhanced operational efficiencies. From a customers’ point of view, the focus will remain on consolidation, integration and regulation – all of which will drive newer business opportunities for the industry, he said.
Due to India's strong fundamentals and as a derivative of the value we add to our global customers, the Indian industry will continue to grow inspite of global slowdown. Besides cost savings, customers derive great value from transformation of processes, access to critical resources, quality trained workforce and reduced reaction time, from the Indian industry, said Som Mittal, president, Nasscom.
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At an employee level, the industry continues to focus on training and building higher end skills and capabilities that enable employees to gain domain expertise. Performance benchmarking and skill upgradation will be strong measurement parameters for the industry as customer expectations of Indian companies will be higher. Overall, the industry will remain a net hirer.
From an employee perspective, with lower attrition, industry workforce will stabilize and this trend will extend into wage moderation in the coming year. The industry has also spread across tier 2 and 3 cities in India and is creating employment opportunities’ for workforce in these centres, and is helping economic development beyond metros, said Pramod Bhasin, vice chairman of Nasscom and president and CEO, Genpact.