Working from India

The IT-enabled
services (ITES) industry is showing good growth prospects. Since
last year, it has grown nearly 71 percent. And it shows no sign
of slowing down like the software and hardware segments. This is
some good news in the gloomy scenario induced by the slowing US
economy.

So it was an
upbeat industry that took stock of the developments and looked
forward to even better days at seminar organized by NASSCOM,
'India IT enables services 2001' in Chennai in May-end. The
revenues from five distinct segments, referred to as ITES, has
grown from Rs 2,400 crore to Rs 4,100 crore in 2000-01. The
industry also employs directly some 70,000 people against 45,000
in the previous year.

Customer
interaction services or simply call centers, has shown the
highest growth of 112 percent, from Rs 400 crore to Rs 850 crore.
NASSCOM commissioned McKinsey report two years ago had predicted
a rosy picture for the ITES segment. The report estimates India's
revenues from this sector in 2008 at Rs 81,000 crore. India is
home to the call center of one of the world's largest
corporations—GE through its GE Capital. GE is planning to
add to the call center facilities. The World Bank had recently
decided to move its back office operations to Chennai. Big names
such as Citibank, Ford, British Airways, Standard Chartered
process many of their data in India.

India's
competitive advantage is clearly the availability of
English-speaking, IT literate human resources, who can be quickly
trained to handle the back office operations of global
corporations at a fraction of the cost back in their
headquarters. Improved telecom facilities, 12-hour time
difference which enables US corporations to have 24-hour work
cycles, bandwidth, better enabling environment in terms of key
infrastructure, investor-friendly policies and above all the
brand equity of India's software majors have made India an
attractive destination.

There are many
competitors. Australia, Ireland, Philippines, Mexico, Hong Kong,
Singapore all are waiting in the wings to take business away from
India. The nation has to be on its guard. Software services is at
the higher end of the value chain and requires highly trained
manpower. On the other hand, ITES is ideal for the millions of
men and women who graduate from our 200-odd universities every
year. This industry can absorb a major part of them easily.

Due to the proprietary nature of the data
and other transactions handled by such centers, most big
corporations may invest in setting up their own facilities here.
Big and medium-sized Indian companies may be forced to offer only
support facilities to such outfits. But as the investments and
employment generation takes place locally, it will be good for
the country.

It would be a
mistake to lure business here based on pricing. Investment in
quality of services will be the ultimate key to becoming one of
the hottest destination, and cornerstone of  NASSCOM's strategy
for ‘Move work to India’ movement.