India’s IT/ITeS Industry: The Next Phase Entrepreneurship ... Consultation on... · New Delhi...
Transcript of India’s IT/ITeS Industry: The Next Phase Entrepreneurship ... Consultation on... · New Delhi...
India’s IT/ITeS Industry: The Next Phase
Entrepreneurship & Broad-Based Innovation
Dr. Anupam Khanna. Chief Economist
National Consultation on Women’s Entrepreneurship
New Delhi February 19. 2013
Hardware Products Services
IT Services BPO
• Project
Oriented
• Outsourci
ng
• Support &
Training
Embedded
Systems
• Software
Products
• System
Software
• Enterprise
applications
• Vertical
applications
• Personal
Computers
• Network
Equipment
• Storage and
Security
• Servers
• Printers
IT-BPO
ER&D OSPD
• Horizontal
Specific
• Vertical
Specific
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The IT-BPO industry segmentation
The industry added 230,000 jobs in FY2012
Brief history of Indian IT-BPO direct
employment
INDIAN IT-BPO INDUSTRY
Source: NASSCOM
* Excluding Hardware
Figures (‘000)
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Industry moving from “Enterprise service providers”
to “Enterprise solution creators”
Source: CLSA, NASSCOM
DIMENSIONS 1990 2000 2010 onwards
SERVICE DELIVERY
DEALS STRUCTURE
PRICING
RESOURCES
TIME TO DEPLOY
SERVICES
STRUCTURE STRUCTURE STRUCTURE
STRUCTURE STRUCTURE STRUCTURE
STRUCTURE STRUCTURE STRUCTURE
STRUCTURE STRUCTURE STRUCTURE
STRUCTURE STRUCTURE STRUCTURE
STRUCTURE STRUCTURE STRUCTURE
Custom,
People-driven
Input-based,
Fixed costs
Staff augmentation
Years Months Weeks or Days
Industrialised, capacity
and method-driven Capacity and IP-driven
Small deal wins, short
duration. End-to-end
Output-based, fixed
costs or gain share Pay per use
Fixed capacity Non-linear
TECHNOLOGY STRUCTURE STRUCTURE STRUCTURE Mainframe to Client
server
Y2K, dotcom
enablement
Cloud, virtualisation,
Mobile computing
Source: CLSA, NASSCOM
CUSTOMER CENTRIC
Enterprise services Enterprise solutions
Multiple vendors, large
size, long duration
Deals related to CAD/M
and maintainence
One client, one solution
Service providers’ value proposition maturing beyond
cost to delivering business outcome
Source: NASSCOM
Service Providers
<2004 2004-2007 2007-2009
•Asset heavy •Dedicated/captive model
•Time & material •Staff augmentation
•Asset-light •Shared services •Resource sharing •Test Labs •Emergence of Managed services
• Shared, Managed services
• SLA driven •Agile •Cloud, Platform •Test Labs, CoEs • Pay-per-use
Shift to Managed
services
2009-2013
Shift to “Pay Per
Use” model
• Shared, Managed services
• Business Tech Mgmt
•Monetisation of assets/platforms
•XaaS, Cloud, Mobility, Social
•Agile methodology
• Verticalised CoEs • Pay-per-use, Risk-reward
COST
• Labour arbitrage
QUALITY
• Process excellence
MATURITY
VA
LU
E
OUTCOME
• Verticalisation
• Innovation
• Transformation
DIFFERENTIATION
• Lower lifecycle
costs
• Faster time to
market
• Differentiation
Efficient Delivery Effective Outcomes
‘Verticalisation’–Business transformer
1. Organisational Design
Verticalised across business functions –
going beyond sales
2. Organic- Internal Capability
Investments in vertical specific tools and
talent
E.g. Hiring doctors/nurses for domain
intensive healthcare - medical coding etc.
3. Inorganic- Value Additions
Fill vertical specific gaps through
acquisitions or enter newer verticals
E.g. Acquisition of platforms such as Life
Admin / Claim adjudication (Insurance)
4. Alignment of KPIs, metrics
Vertical specific P&L accountability, goals
E.g. Horizontal capabilities such as
analytics getting aligned to verticals
Cost Low
No
n P
rice
Va
lue
High
High
Low
Initiate Non Linear Play Offerings- Products, Platforms,
Software assets, Solution
Accelerators
Extending Cost
Proposition Offerings- RIM, Testing, BPM
Through- Changing employee
mix, pyramid, tier 2/3
Moving up Value Chain
Offerings- Consulting and SI,
Specialized voice
Through- Global delivery and
workforce
The Indian IT-BPM industry today moving
along three paths to offer more value
Source: NASSCOM
India: World’s largest employable talent pool
India: Human Capital
379
1,158
FY2006** FY2013E**
36%
14%
12%
9%
16%
6%
6%
COMPOSITION
100% ~4.74 million
Postgraduates
3 yr Engg Diploma/MCA
4 yr Engg
Degree
Science
Graduates
Commerce
Graduates
Arts + Other
Graduates
Other Graduates
2,557
3,584
FY2006** FY2013E**
OUT-TURN Technical Graduates, Post Graduates
‘000 nos
Notes: E: Estimate ** NASSCOM estimates based on past trends in annual enrollments / intake and outturn Source: NASSCOM
Non-technical Graduates, Post Graduates
‘000 nos
FY2013E
CAGR
17%
CAGR
5%
• 4.5 million graduates each year
• World’s largest employable
graduates: ~36-37 per cent
• English speakers: Second
largest in the world
• Network of ~389 universities,
14,169 colleges and 1,500
research institutions
COMPLETE
India: Human Capital
India’s uniquely diverse workforce and established
training engine ensuring a future ready workforce
Talent diversity1: IT Services
2012, per cent
Talent diversity1: BPO
2012, per cent
70%
12%
8% 10%
Technical (Incl. Post Grads) Non Technical (Incl. Post Grads)
Domain Specialists Others
16%
66%
9% 9%
Technical (Incl. Post Grads) Non Technical (Incl. Post Grads)
Domain Specialists Others
Source: NASSCOM
INDUSTRY TRAININGS
• Communication
• Soft Skills
• Technical Skills
• Domain Knowledge
BUSINESS READY
• Verticalised solutions
• Tools & Platforms
• Industry Best Practices
• Adopt new technologies (SMAC)
~3 million
knowledge
workers
COMPLETE
“SMAC” – Social Media, Mobility, Analytics and Cloud
reshaping the future of the Indian IT Industry
Impact is highly evident
• Create a new digital
operating model and
transformation to a
permeable enterprise
• Engagement with a
growing digital ecosystem
• Empower enterprises to
embrace emerging
technology trends and to
benefit from the value
expectations of customers
• Innovative thinking in
business and enterprise
architectures
SMAC, is becoming a business reality
Social, mobility, analytics and cloud are reshaping
the business, the consumers and all traditional
approaches, Indian Industry has seen till now
Movement towards the next orbit of innovation with
consumerization of IT
Opportunity to move to higher-margin business
by offering creative solutions
Help businesses grow dynamically instead of
increasingly cutting margins for typical IT contracts
Launching luxury product lines that comprise the
SMAC suite of technologies to go the next level
Huge potential for revenue generation
IDC Indian IT vendors expected to generate over
$225 billion in SMAC related revenue by 2020
Drivers/ factors contributing to the changing landscape of Technology
Transformation
Remodelling business processes
through harmonizing technology
advancement
Client- specific outcomes
A meaningful change in the business
requirements i.e., end-to-end solutions
New paradigm for business
Efficiency, Enhanced customer
experience, Reduced time to market,
Connectivity, IT Consumerization
Journey to the Cloud continues; enthusiasm for Big Data, Mobility and Social Analytics also remains strong
Mobile payments Smart cities Connected Health Pivot merchandising
mBanking mHealth Smart Buildings mGovernance Platform-as-a-Service
Domestic IT-BPO market growing fastest in India; driven by increased PC/broadband and mobile penetration
INDIAN IT-BPO INDUSTRY > DOMESTIC
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Source: NASSCOM-Zinnov India’s Domestic IT-BPO Market: Winds of Change
PC and Mobile Penetration in India
(Million nos)
Broadband Subscribers and Active Internet
Users in India
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Technology can transform India’s ability to
provide basic services
Basic services Potential technology and services’ solutions
Healthcare 50% of Indians do not have access to primary healthcare –
technology can provide it at half the cost
Financial
services
80% of Indian households are unbanked – technology can
enable access for 200 million families
Education
India faces a 3-fold shortage in teachers – technology can
address this through remote solutions (e.g., virtual
classrooms, recorded lectures by senior faculty, modular
multimedia content)
Public
services
India suffers from a leakage of 40-50% in public food
distribution – technology can ensure transparency
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Inclusive ITeS Innovation Examples
• Mobile Financial Services: EKO
• Mobile Phones for Data and Text
• Rural Development: Ekgaon , Nano Ganesh
• Health Diagnostics (Avoidable Blindness): 3nethra
• Public Health (Maternal & Child Health): e-Mamata
• Travel Services: iXiGO
• Unique Identification System: Aadhar
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Blindness A Global threat
Problem
Challenges
• Blindness is a Global threat to health and productivity • Of the 39 Mn blind people in the world 12 Mn live in India • Africa has approximately 19% of the world’s blindness • 80% blindness caused due to –
• Cataract / Glaucoma / Refractive Errors/ Diabetic Retinopathy/AMD • Of the 60 Mn Diabetic patients in India 20% will develop diabetic retinopathy
• Scalability – Low Patient-to-Ophthalmologist ratio; 1:70000 in India • Affordability – Expensive devices which require trained ophthalmologist • Rural reach – Only 7-10% of the people are screened on time • Awareness – Lack of awareness about detecting eye disorders early
80% of blindness can be prevented if pre-screened
An Effective Pre-screening tool is the Unmet need!
Forus 3nethra
A Pre-screening Ophthalmology Device
Cornea Imaging
Retina Imaging
3nethra is an affordable multi-functional portable ophthalmic imaging system
Refractometer
Banking and Financial Services:
Increasing security and convenience for end users
• Mobile and Internet Banking lower the requirement of cash
handling
• Specialised security software ensure data privacy and security
Improving Security for both the User and the Provider
• Ease of information access and issue resolution through call
centers
• Convenience due to higher responsiveness of online and
mobile banking
Improving Customer Service
• Enhanced efficiency in basic processes reduces number of
trips to a branch
• User-friendly mobile/online payment solutions
Increasing Agility in Processes
• Enhanced customer convenience due to integration of
applications
• Ability to demand customised solutions on basis of the past
track record
Integration of Different Services and Processes
Internet Banking
Mobile Bank
Branches
ATMs
SMS/Mobile Banking
Phone Banking
Benefit of IT-BPO
Products and
Services
on
Banking and
Financial
Services
Customer Care
Services
Core Banking
Solutions
Source: Evalueserve Analysis
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• Licenses for semi-closed wallet being issued to non-bank entities like Bharti Airtel and ITZ Cash
• RBI considering a dedicated clearing house for m-payments
• Considerations underway on m-pin based m-banking POS, mobile linked no-frills accounts using biometric authentication, etc.
• Mobile payment service providers (like Obopay) evangelizing the need for mobile money for banks like Yes Bank, Union Bank of India, etc.
• Following the success stories like M-PESA in Kenya and M-KESHO in Africa, M-PESA has been introduced in India by Vodafone and HDFC Bank
• Mobile-based branchless banking platforms are being adopted by the banks, e.g. A Little World platform by SBI
• Large databases of information are available enabling automation of services like IVR
IT as
an
Enabler
Industry as
an Enabler
Government
as an
Enabler
Mobile
Banking India’s mobile banking customer
base was 0.887 million in Sep ‘10
RBI guidelines have restricted the
mobile banking transactions to INR
2,500 per transaction
Mobile Banking
Note: 1; IMG- Inter Ministerial Group,, MNO – Mobile Network Operators, POS – Point of Sale, IVR -Interactive voice response; SWIFT -
Society for Worldwide Interbank Financial Telecommunication
Source: ASSOCHAM Report Mobile Value Added Services (MVAS) 2010; Zinnov Analysis
Healthcare: Improving accessibility & efficiency
Increasing accessibility of health
services in remote areas
Increasing awareness about health-
related issues
Increase in efficiency by reducing
burden on doctors and optimising
resources
Scalable and cost effective health
services
Telemedicine
Electronic Medical
Record and Hospital
Automation
Automation of
Peripheral Healthcare
Services
Picture Archiving and
Communication System
Managed Healthcare
Services
Mobile Health Clinics
Key
technology
solutions
for
Healthcare
Source: Evalueserve Analysis
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Retail Industry Growth Drivers
Increasing maturity of unorganized sector
Rising number of malls and supermarkets
New players entering the market, existing
players rapidly expanding
Innovative store formats: community
shopping, wedding malls, etc.
Private brands/labels by big retailers
Network all offices and outlets of the
company
Provide remote training to employees
Enable an efficient supply chain network
Improve customer service
Address security at all levels
Finance & accounting and HR
Note: 1NCR, Mumbai, Hyderabad, Pune, Bangalore, Kolkata and Chennai
Source: Zinnov Analysis
Ensure faster and efficient transaction
Te
ch
no
log
y
Dri
ve
rs
Business Trends Need for Technology
Companies establishing presence on the
internet/online platform
Take Away’s for Policy & Strategy
• IT not just for “big boys” or rich yuppies...can play
transformational role in society, polity and economy
• Refocusing Strategic Priorities for Indian IT in Next Decade
...Domestic Markets and Developing/Emerging Countries
...Not just about Growth, also about Learning
• Affordability, Scalability, Reach and Education/Awareness
Key to Direction of Entrepreneurship & Innovation
• Innovation is More Than R&D, Even D&E of Products
...Service Dimensions and “Business Models” also Salient
• Government Critical to Shaping “Demand” or Ecosystem
• Advance Market Commitment (e.g. Laptops for Students)
• Platforms (e.g. Aadhar)
• Incentives and Regulation
Enabling Women Entrepreneurs
• Skills and Training – both Business and Soft Skills
• Peer-Group Networks
• Information Dissemination
• Supplier Diversity Programs at Major Firms
• Encouraging (Actively Supporting?) Spin-Offs
• …in addition to usual aspects of the innovation eco-system
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