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Nasscom targets $5 B revenue for ITES-BPO sector
Thursday, 10 June 2004, 19:30 IST
BANGALORE: Nasscom, the Indian IT industry's umbrella body, has set a $5.1 billion target for the IT-Enabled Services-Business Process Outsourcing (ITES-BPO) sector for fiscal 2004-05 that began April 1.
This would be a 40 percent rise over fiscal 2003-04, Nasscom (National Association of Software and Service Companies) president Kiran Karnik told the second strategic summit of the organisation here Wednesday.
Karnik told the 500 delegates the ITES-BPO sector would continue to grow faster than its big brother - the IT services sector - because of increasing recognition by global firms of India's cost and quality advantages.
"Cost pressures and growing competitiveness are driving global firms to look at offshore outsourcing as a strategic alternative.
"Access to global talent, economies of scale, process engineering and enhancements, wage arbitrage and higher profit margins are making more and more companies realize the advantage India option," Karnik declared.
With outsourcing becoming a part of their corporate strategy for maintaining global competitiveness, global firms are able to generate higher cash flows to reduce investments in infrastructure, telecom and equipment.
"The industry grew by a whopping 46 percent during the last fiscal (2003-04), posting an export revenue of $3.6 billion over the previous year (2002-03) at $2.5 billion."
On the hiring front too, the industry absorbed about 74,000 people despite the attrition rate of 45-50 percent being a matter of concern.
With 245,100 people employed at the end of March 31 against 171,100 last year, the industry witnessed a hiring growth rate of about 40-42 percent.
"Focus on core competencies to remain competitive is forcing global firms to offshore outsourcing as it enables them to free resources for core business requirements.
"In view of India's unique value proposition consisting of productivity, quality and rate, global off-shoring is stoking the ITES-BPO growth engine," Karnik affirmed.
Highlighting the paradigm shift in the global vendor landscape of the industry, Karnik said talent, quality and cost advantages were attracting global firms such as GE, British Airways and HBSC to set up their captive offshore or in-house centres in countries like India, Ireland and Philippines.
"The financial sector continues to dominate the ITES-BPO industry as the largest vertical, followed by telecom, manufacturing, transportation, retailing, utilities and automotive," Karnik maintained.
Source: IANS
Source: IANS