|  Mid-sized firms are increasing their levels of IT adoption, so by working for the hours beyond an established limit, this section can become a larger SME play.
The estimated $8 billion Indian business process outsourcing (BPO) industry benefited because of constant US fall off in 2005-06 due to slowing of numbers in outsourcing deals.
Yet, we will be able to see a renewed push from the US in pursuing more offshore business as US companies will most probably going to increase their outsourcing due to the fact that they are expecting to save money during the recessionary phase.
In whatever way, in 2008, during US presidential elections, outsourcing American jobs to India can once more become a hot-button issue. Neeraj Bhargava, CEO, WNS, believes that with the growing pressures on IT budgets, large outsourcing deals will see a revamp in 2007.
During the slowdown, projects on the periphery was cancelled and Indian outsourcing industry, has over the years turn out to be successful by making investment in resources and skills and by making a move into the core business areas.
Service tax is now being touted as one more dampener for BPO players, as there is 12.5 per cent tax on leased and rented premises. But according to Rohit Kapoor, president and CFO, EXL Services, they are not going to ask for a huge dent on the bottom line with the levied service tax, as there is plenty of scope to maximise their operating costs and returns per employee.
WNS, who had previously asserted to run the maximum number of shifts, is being workaholic for adding more shifts in order to utilise their infrastructure capacities more efficiently.
The Indian IT-BPO sector, including the domestic and exports segments, is growing at an estimated 28 per cent with revenues expected to exceed $47.8 billion in 2007.
Recent Nasscom-McKinsey report suggested that the total addressable market for global offshoring is approximately $300 billion, of which $110 billion will be offshored by 2010.
In addition to this, the report further says that India has that much of capacity to grab over 50 per cent of this opportunity and produce export revenues of approximately $60 billion by growing at 25 per cent year-on-year till 2010.
Kiran Karnik, President, Nasscom, remains upbeat about the Indian outsourcing industry but state that the scarcity of any declaration with regard to the continuation of tax incentives, as part of the Software Technology Parks in India (STPI) scheme is disappointing, especially when all other countries are going to render their host of inducements. According to him, this thing may precede both Indian companies as well as MNCs to place their growing proportion of incremental growth in other countries.
During US elections, Karnik said, it is not the outcome that will matter; it is line with economic compulsions of a competitive global economy which will be concerned. Cheaper outsourcing destinations like-- Philippines, South Africa and Europe is too on the industry's list regarding the hunting for delivery centers.
The Nasscom Strategic Review 2007 says that the Service-line expansion is aiding service providers to succeed on the larger and more complex deals and is driving up the average ticket size of contracts awarded to Indian firms.
Company like EXL feels that domestic market is also picking up. Total size of the domestic market crossed $15.9 billion in 2006-07. Indian firms are gaining the ground very slowly, in spite of the fact that this portion has been led by MNCs in the past few years. |
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