| Software
Development - Why India |
 |
| Leading global business intelligence
and consultancy firms such as Giga, Forrester
Research and McKinsey & Co. have cited
various reasons for the increase of offshore
outsourcing by MNCs to India. Outsourcing
is expected to grow to at least 23 percent
during 2002. India's quality and cost benefit
edge is one of the major draws for these organizations,
analysts say. Giga predicts that, compared
to other competing countries such as China,
Ireland, Israel, and the Philippines, India
will continue to dominate as the preferred
off shore country. |
|
| Forrester Research meanwhile
indicates that by 2003, a larger number of
companies will engage offshore providers and
their budgets too will grow rapidly. statistics
for offshore outsourcing show that There will
be an increase from 12 percent of technology
budgets today to 28 percent in 2003. According
to a study conducted by Forrester in November,
2001, India's edge over other competing nations
in the IT outsourcing business is based on
the country's decade old experience in this
area, fluency in the English language, supportive
Government policy infrastructure, and high
quality offerings. |
|
| Today, MNCs are rushing into India to stake
a claim to the IT outsourcing market. While
a large number of companies are outsourcing
their software development to Indian companies,
others are establishing a presence in India
and participating actively in the software
export game. The MNC sector emerged as an
important segment contributing Rs 9,855 crore
of the total exports of Rs 35,600 crore in
the year 2001-02, translating into 27% share
of the total exports. |
|
| Strengths
|
|
| Large
Human Resource |
|
| Every year, approximately 19
million students are enrolled in high schools
and 10 million students in pre-graduate degree
courses across India. Moreover, 2.1 million
graduates and 0.3 million post-graduates pass
out of India's non-engineering colleges. |
|
| While 2.5-3 percent of them find jobs in
other fields or pursue further studies abroad,
the rest opt for employment in the IT industry.
If the flow from high schools to graduate
courses increases even marginally, there will
be a massive increase in the number of skilled
workers available to the industry. Even at
current rates, there will approximately be
17 million people available to the IT industry
by 2008. |
|
| Indian
Education System |
|
| The Indian education system places strong
emphasis on mathematics and science, resulting
in a large number of science and engineering
graduates. Mastery over quantitative concepts
coupled with English proficiency has resulted
in a skill set that has enabled the country
to take advantage of the current international
demand for IT. |
|
| Quality
Manpower |
|
| Indian programmers are known for their strong
technical skills and their eagerness to accommodate
clients. In some cases, clients outsource
work to get access to more specialized engineering
talent, particularly in the area of telecommunications.
India also has one of the largest pools of
English-speaking professionals. |
|
| Government
Policies |
|
| The Indian government recognizes
that Information Technology will influence
economic development extensively in the future.
IT is a pat of government's national agenda
and all policies are driven to achieve maximum
benefit to their industry |
|
| The liberalization and deregulation
initiatives taken by the Indian government
are aimed at supporting growth and integration
with the global economy. The reforms have
reduced licensing requirements and made foreign
technology accessible. The reforms have also
removed restrictions on investment and made
the process of investment easier. |
|
| The government is actively promoting
FDI, investments from NRIs (Non-Resident Indians)
including Overseas Corporate Bodies (OCB's)
owned by the NRIs. FDI can be brought in through
the automatic route, based on powers accorded
to the Reserve Bank of India. |
|
| Till 1994, DOT was the sole
provider of basic telecom services in India.
The new National Telecom Policy has opened
the field for private participants. |
|
| After realizing the potential of India as
a major IT power, the government has taken
several initiatives to promote the development
of IT. The Ministry of Information and Communication
Technology is playing an active role in developing
the infrastructure that supports the development
of information technology. The IT Bill passed
in 2000 provides a legal framework for the
recognition of electronic contracts, prevention
of computer crimes, electronic filing of documents,
etc. |
|
| Amendments have also been proposed in the
Indian Evidence Act, Indian Penal Code and
the RBI Act. The mechanism of digital signature
has been proposed to address the issues of
jurisdiction, authentication and origination.
|
|
| Recognizing the importance of Venture
Capital Funding, the Ministry of Information
Technology has set up a National Venture Fund
for the Software and IT Industry with a corpus
of Rs. 100 crore in association with the Small
Industries Development Bank of India (SIDBI)
and Industrial Development Bank of India (IDBI).
The aim of the Fund is to provide Venture
Capital to start up software professionals
and IT units in the small-scale sector. |
|
| The IPR
law in India |
|
| Nasscom has been playing a
crucial role in helping the IT industry achieve
the ITS and ITES vision. Along with the government,
Nasscom has taken many steps towards efficient
implementation of the above mentioned government
policies. |
|
| Nasscom has helped the government implement
almost all the original recommendations of
the last Nasscom-McKinsey Report, 1999 concerning
the capital markets, venture capitalists,
SEBI and the Companies Act. |
|
| Quality |
|
| In the past few years, the Indian IT industry
has pursued the goal of attaining the highest
international standards of quality. A World
Bank funded study conducted as early as 1992
to discuss Indian software strategies had
concluded that more and more vendors in the
US prefer to get their software developed
undertaken in India for its quality and cost
advantage. |
|
| Indian players have created
a strong value proposition in the IT software
and services arena. India enjoys advantages
of people sophistication in terms of a very
large pool of English speaking scientific
personnel, varied and extensive skill sets
in terms of technology, and offering services
at globally competitive costs. India also
boast vendor sophistication--with more than
200 companies being quality accredited and
serving the needs of over 255 Fortune 500
companies. Today, the world looks towards
the Indian IT software and services industry
for its good quality and high price performance.
|
|
| According to McKinsey &
Co., India has and will continue to have a
growing number of vendors successfully working
on complex projects across all areas of software
and services, and performing at levels comparable
to those of leading global players. |
|
| As of 31st March 2002, India
had 42 companies at SEI CMM Level 5 assessment.
The quality maturity of the Indian software
industry can be measured from the fact that
already 316 Indian software companies have
acquired quality certifications and more companies
are in pipeline to do so. |
|
| Digital Mesh is among the leading software
companies in india |
|
| The other heartening feature
has been the growing acceptance and adoption
of the newly emerging People-Capability Maturity
Model (People-CMM) by the Indian software
industry. For a country like India, with its
large assets in the form of skilled human
resources, the relevance of People CMM needs
no emphasis. A large number of Indian IT software
and services companies have been quick to
realize this and have either implemented or
initiated programs. |
|
| If you are looking to outsource software
development offshore then Digital Mesh is
one of the best software companies in India.
Our website developers software developers
have created outstanding ecommerce solutions
packages, web based sales management technology
and provided IT Consulting Finance to leading
companies across the globe. |
|
| Indian IT industry is on track
to achieve its long term aspirations of US$
50 billion in export revenues by 2008 and
remain the pre-eminent destination for exports.
The industry has grown at a CAGR of 46 percent
since 1999, which is higher than the growth
rate required to reach the target set in the
first NASSCOM-McKinsey Study. |
|
| IT
Services |
|
| Today, India is undoubtedly the pre-eminent
destination for offshore IT services. However,
China has the fundamentals to emerge as a
credible offshore IT services destination
in the medium term. services provided by IT
consulting firms include creating database
driven web sites online , offshore custom
development , IT consulting firm services
and ecommerce solutions packages, |
|
| The Indian IT services industry landscape
is being fundamentally reshaped by changes
in customer and competitor behaviour, and
the emergence of new opportunities along service
lines, verticals and geographies. |
|
| Sustaining future growth will
call for new capabilities, an expanded business
footprint, and radical changes to existing
business models. India needs to take several
initiatives to sustain its lead in exports
of IT services and also explore opportunities
to engage with China. |
|
| IT
Enabled Services |
|
| Based on location and people
attractiveness, ten countries were identified
as strong contenders for the global ITES market
in 1999-- India, Ireland, UK, Australia, Singapore,
Hong Kong, China, the Philippines, the Netherlands
and Mexico. Among these, only two countries,
India and Ireland, have created a substantive
presence till date. |
|
| Today, India and Ireland surpass other competitors
in terms of employment, number of companies
sourcing ITES as well as spectrum of verticals
and services lines. India, in particular,
is witnessing rapid growth due to its cost
advantages, the early success achieved by
the reference lighthouse customers and government
initiatives implemented to improve location
attractiveness. The ITES industry has grown
at more than 70 percent over the last two
years and currently employs over 1,00,000
people. India is fast emerging as the "new"
leader, especially in traditional services
such as call centers, back office processing,
etc. India is also the first country to see
significant third party activity. |
|
| Philippines and China could pose the strongest
competition to India and challenge India's
supremacy in the medium to long term. Only
China and the Philippines, other than India,
have a sizeable, low cost talent pool, which
could meet global ITES manpower needs. Governments
in both countries are taking significant steps
to improve their attractiveness for the ITES
industry. |
|
| Other countries like Malaysia, the Caribbean,
South Africa, Hong Kong, etc. have seen some
ITES activity. However, the small size of
their talent pools and lack of reference customers
severely constrains their ability to emerge
as hubs. |
|
| The Indian ITES industry is set to move
well beyond contact center, low-skilled work
driven by the early success of the first movers.
Capturing the opportunity will require players
to crystallize their business models and develop
tailored value propositions. |
|
| The Government will need to focus on three
areas to help the industry realize the potential--removing
regulatory hurdles especially in emerging
service lines such as IT-enabled services;
unlocking growth in the domestic market; and
proactively addressing potential infrastructure
and talent bottlenecks to ensure that India
stays ahead of competition. |
|
| Digital Mesh has been providing IT consulting
firm services and business outsourcing software
for over 5 years now. Digital Mesh is among
the best it consulting firm in India. We have
been managing offshore development with remarkable
success for a long time now. |
|
| NASSCOM will need to take on the mandate
of developing and positioning India as a "global
services sourcing hub." Specifically
it should focus on three main tasks--developing
India's presence and strengths in emerging
service lines such as IT-enabled services,
systems integration, infrastructure management,
and R&D services; helping companies break
new ground in long under penetrated geographies;
and, strengthening the India Inc. brand. |
©
1999-
Digital Mesh Softech India (P) Limited, Kochi.