IT Sector in India_Ravi Prasad

8/8/2019 IT Sector in India_Ravi Prasad

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A ReportOn

IT sector in INDIA

and

Problems associated with this

sector

Submitted by-

Ravi Shanker Prasad



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ContentsExecutive summary: ...................................................................................................................................... 3

Global perspective: ....................................................................................................................................... 4

Information technology in India ................................................................................................................... 4

SWOT Analysis of Indian IT Sector ................................................................................................................ 4

Challenges before Indian IT Industry ............................................................................................................ 5

Recommendation .......................................................................................................................................... 6

References .................................................................................................................................................... 7



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Executive summary:This report is made a part of my PGPM curriculum. This report mainly focuses on the Indian IT industries,

their SWOT analysis and problems which are being faced by the Indian IT industries. Finally this report

also provides some solutions to overcome those problems.



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Global perspective:The Information Technology Association of America defines Information Technology as “the study,

design, development, implementation, support or management of computer-based information

systems, particularly software applications and computer hardware”.

Currently IT industry is the largest of the ten sectors in the S&P 500 with a sector weight of 19.91%. Asof December 31, 2009, the S&P 500 Index total market capitalization by IT industries was $9,929.45 bn.

The market capitalization of the Information Technology sector is $1,839 billion.

Information technology in IndiaThe Indian Information Technology industry accounts for a 5.19% of the country's GDP and export

earnings as of 2009, while providing employment to a significant number of its tertiary workforce. More

than 2.3 million people are employed in the sector either directly or indirectly, making it one of the

biggest job creators in India and a mainstay of the national economy. In March 2009, annual revenues

from outsourcing operations in India amounted to US$50 billion and this is expected to increase toUS$225 billion by 2020. The most prominent IT hub is IT capital Bangalore. India's IT Services industry

was born in Mumbai in 1967 with the establishment of Tata Group in partnership with Burroughs. The

first software export zone SEEPZ was set up here way back in 1973, the old avatar of the modern day IT

park. More than 80 percent of the country's software exports happened out of SEEPZ, Mumbai in 80s

SWOT Analysis of Indian IT SectorTo better understand the industry at this juncture, we present a “Strengths, Weaknesses, Opportunities

and Threats (SWOT) Analysis” of the industry in following figure.



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We note from this SWOT analysis that the newer opportunities that could come business’s ways are in

areas where the companies could leapfrog the competition and try to sell their products and services to

the “Bottom of the Pyramid” consumers in the emerging economies. As pointed out by one of the

authors, it is imperative that the Indian Software Services move out of doing business conventionally

and start investing resources to build solutions for the next 1 billion consumers’ thereby creating real

value.

Challenges before Indian IT Industry At present there are a number of challenges that are facing the information technology industry of

India. One of the major challenges for the Indian information technology industry was to keep

maintaining its excellent performance standards. To solve this problem the first step that needs to be

taken is to create an environment for innovation that could be carried for a long time.

The innovation needs to be done in three areas that are connected to the information technology

industry of India such as business models, ecosystems and knowledge. The information technologysector of India also has to spread the range of its activities and also look at the opportunities in other

countries. The improvement however, also needs to be qualitative rather than just being quantitative.

The skill level of the information technology professionals is one area that needs improvement and

presents a considerable amount of challenge before the Indian information technology industry.

The Indian information technology industry also needs to co-ordinate with the academic circles as well

as other industries in India for better performance and improved productivity. The experts are of the

opinion that the business process outsourcing service providers in India need to change their operations

to a way that is more oriented to the knowledge process outsourcing. One of the most important crises

facing the Indian information technology industry concerns the human resources aspect. The problems

with outsourcing in countries like the United States of America are posing problems for the Indian

information technology industry as well.

In the recent times a bill has been passed in the state of New Jersey that allows only the citizens or legal

non-Americans to be given contracts. This legislation has also affected some other states like Missouri,

Connecticut, Wisconsin and Maryland. These states are also supposed to be considering these laws and

their implementation. This is supposed to have an adverse effect on the outsourcing that is the source

upon which the information technology industry of India thrives. The information technology

professionals who aim at working in the country are also likely to be hindered by the legislation as a

significant amount of these professionals have been going to work in the USA for a long time.

Another major problem lies with recruitment of the new employee be it fresher of an experienced

professional. To deal with this problem HR people of IT industry may take help from the internet,

professional recruiters or from recruitment websites.

The presence of major players like Accenture, IBM etc always troubles the Indian IT industries. These big

players, in the bidding of project, quotes very less price and get the project at any cost. Similarly some

small players also became the nuisance as the get project at very less price. This way the margin shrinks.



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In order to get the desirable margin, all IT companies should agreed upon a common billing system for

the project so that they get the same price for the same project irrespective of who is developing it.

Since the recession time has been passed, so now IT industries are facing new problem in retaining their

experienced project managers as the attrition rates has gone up. To stop this attrition, IT companies

must come up with new policies to increase the employee satisfaction ratio. To achieve high theemployee satisfaction it companies should provide better career options, flexible working hours, should

provide perks to their employees. They should hire some people oriented managers rather than

production oriented managers who may look at the personal problems of the employee and may

provide the appropriate solutions as well.

RecommendationAll the solutions offered to overcome the problems that are currently being faced by the Indian IT

industries are based on my own experience and some companies has followed these solution to perform

better in this competitive market. I would highly recommend all IT industries in India to follow thesesolutions to see the difference.



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References1. www.wikipedia.com

2. Website of different IT companies

IT Sector in India_Ravi Prasad

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