Nasscom projects Rs 6,300 cr revenue for ITES this year

Nasscom has projected a 54 percent growth rate for the IT Enabled
Services (ITES) sector for the next fiscal to take up the revenue
to Rs 6,300 crore. The sector had clocked revenue of Rs 4,100
crore at a record growth rate of 70 percent out of the total
software export of Rs 28,500 crore last fiscal.

Business Process Outsourcing and Back-office operations along
with customer interaction services will account for more than 50
percent of the revenue for next year, according to Nasscom's
recently conducted survey. Digital Content and website services
are expected to contribute about 25 percent to the revenue while
engineering and design, geographical information system,
transcription and translation localization services and others
would contribute to the rest.

"The target of Rs 81,000 crore for the IT enabled services
sector by 2008 does not seem unattainable. It has been growing at
a rate of more than 35 percent needed to reach the target for the
last three years. So we are well on target," said Phiroz
Vandrevala, Chairman, Nasscom.

Though he admitted that the US slowdown has certainly affected
the growth rate of Indian IT industry but it has mainly affected
companies that are not organized. Companies that were members of
Nasscom operated at a strategic level, building on relationships
they have forged with companies. The JFM quarter was the best
quarter for the industry. If the AMJ quarter fares similar to JFM
or even slightly better, it will ensure 30-35 percent growth of
the industry, and all would be well on target to grow by 40
percent this year.

At Nasscom's third national conference on ITES sector got
underway with Phiroz Vandrevala, Chairman, Nasscom urging
entrepreneurs to take ITES as a 'serious business' and think long
term to make it a sustainable one. He said that India would have
to do tremendous leveraging on the India software brand in ITES
to make India a global ITES destination.

"This sector has had an investment of $300 million until
now. With multinational companies such as GE and Amex, which had
substantial software development work going on in India setting
up ITES centers and new companies such as Standard Chartered,
Hong Kong Bank coming in, we expect an additional investment of $
200 million in this sector in the next two years," he said.

While inaugurating the conference, D Prakash, IT Secretary, Tamil
Nadu, said that ITES sector in Tamil Nadu has contributed Rs 260
crore to the total software exports of Rs 3,116 crore last
fiscal. It had grown from Rs 70 crore last fiscal. "The ITES
sector in Tamil Nadu has contributed about nine percent to the
total software export revenue, which is close to the national
figure of 10 percent. And since the sector is geography
independent and does not needs employees who are not that well
acquainted with technology, it has the potential to be
established outside main industry centers also."

Presenting a paper on the roadmap to make India a global ITES
destination, NK Seshadri, Partner, Business Consulting, Arthur
Andersen India said that the three participants in the endeavor,
namely entrepreneur, facilitators such as Nasscom and government
and policy makers needed to de-hype and plan and understand the
emerging disruptive technologies and labor arbitrage.

"It is up to the facilitators to leverage on the software
brand India has in ITES, help articulate the industry's value
proposition, market the brand, establish standards, inform the
entrepreneurs and safeguard the brand from destruction and
complacency", he added.

(CNS)