Financial Daily from THE HINDU group of publications
Wednesday, Nov 03, 2004
Financial Daily from THE HINDU group of publications Wednesday, Nov 03, 2004 |
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Info-Tech
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IT-enabled Services `ITES cos need to have offshore centres to stay in race' Our Bureau
Bangalore , Nov. 2 THE domestic ITES players will face margin and pricing pressures as the emerging hotspots grow rapidly in the next few years. That they will have to set up centres in at least two of the emerging ITES hotspots to remain competitive was the message from the IDC seminar at Bangalore IT.COM 2004. Mr Pradeep Mukherjee, Managing Director of offshore advisory, neoIT, said that China is serious competition in IT services sector in the coming decade but South America, Western Europe, Russia and the Philippines are growing rapidly in ITES. Emerging BPO segments are in HR, procurement and training, he said, adding that companies offering vertical activities, such as credit and risk processing, treasury operations and underwriting, would get larger and better offshoring deals. The ITES sector will be about the ability to scale up in size and investments, according to Mr Mukherjee. "There is an opportunity for Indian players as large multi-year contracts by Fortune 100 companies come up for renegotiation, and there is bound to be an offshoring component that will be included in the negotiations." Indian IT companies will have to build global delivery capabilities, innovate and integrate technologies to deliver value, establish local presence in the emerging ITES destinations, according to Mr Pradeep Gupta, MD, IDC (India) Ltd. Mr Gupta said that the PC sector would face price wars and desktop replacement options, while the server space would go into consolidation mode, with major `swap-outs'.
`Non-metros to see faster growth' SMALL towns are big news as call centres and BPO units look elsewhere for sustainable growth. The STPI Director General, Mr S.N. Zindal, said that exports from these smaller cities would grow five times in the next 4-5 years. The metros too would continue to witness growth but a large number of companies are seeing sense in extending their operations to non-metros, Mr Zindal said during the Bangalore IT.Com 2004 technology outsourcing conference with IDC on Tuesday. STPI has been encouraging the setting up of call centres and BPO units in smaller cities and had worked to ensure that satellite and fibre-optic connectivity and communication facilities would meet the potential for growth. STPI expects $50 billion of exports in IT and ITES by 2008. Mr Zindal said that these projections were based on the promising growth witnessed by the industry in India. A recent Nasscom projection pegged the year's growth at 30 per cent to touch $16 billion.India can expect to touch $19.8 billion in ITES exports by 2008 of the total market of $42.2 billion.But Central and Eastern Europe and the Philippines are serious competition to the Indian BPO industry.
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