impact on recession (indian it)

7/28/2019 Impact on Recession (Indian IT)

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A Recession is a contraction phase of the business cycle.

National Bureau of Economic Research (NBER) is

the official agency in charge of declaring that the

economy is in a state of recession.

The financial press often uses the recessionary

definition of two or more consecutive

quarters of declining Gross Domestic Product

(GDP). GDP is defined as the totalmarket value of all final goods and services

produced within the country in a given

period of time.


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IMPACT OF GLOBALRECESSION ON INDIAN IT


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A slowdown in the US economy is bad news for India.

Indian companies have major outsourcing deals from the US.

India's exports to the US have also grown substantially over the years.

Indian IT companies with big tickets deals in the US would seetheir profit margins shrinking.

The whole of Asia would be hit by a recession as it depends on the USeconomy.

Asia is yet to totally decouple itself (or be independent) from the

rest of the world, say experts.

Outsourcing market is suffering from the recession in whole world and India IT sector is

highly dependent on outsourcing mainly 60% on US.


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Role Switzerland USA Canada UK Ireland Greece INDIA

Project

Leader

$ 74,000 $ 54,000 $ 39,000 $ 39,000 $ 43,000 $ 24,000 $ 23,000

Business

Analyst

$ 74,000 $ 38,000 $ 36,000 $ 37,000 $ 36,000 $ 28,000 $ 21,000

SystemsAnalyst

$ 74,000 $ 48,000 $ 32,000 $ 34,000 $ 36,000 $ 15,000 $ 14,000

Test

Engineer

$ 59,000 $ 47,000 $ 25,000 $ 24,000 - $ 13,000 $ 8,000

Network

Analyst/Designer

$ 67,000 $ 49,000 $ 32,000 $ 31,000 $ 26,000 $ 15,000 $ 14,000


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Peoples are thinking that recession is becoming a disasterfor the Indian economy but in my believe recession isactually a great time to start a new venture.

Great time to take advantage of the lack, when talent isavailable, resources are cheaper.

Fact whenever there is a lack people outsource more.

Western companies started viewing India as good place tooutsource big research work, website development,designing work etc.

Long-term market then they can say when the recessionin the US financial market come down, Indian IT and BPO/KPO companies will be in good position to get moreoutsource projects from the US companies.

Recently Indian outsourcing software and webdevelopment industry have started a new strategy tocompete with recession by keeping their expenses as suchand higher the working time of the staff, higher the qualityof out put and reduce the out put time.

Eg:- Apex Decisions (Pilot Project Strategy)


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IT industries are confronting heavy loss due to the fall down of global economy.

One danger meanwhile is of a dip in the employment market. There is already anecdotalevidence of this in the IT and financial sectors, and reports of quiet downsizing in manyother fields as companies cut costs.

Eg:- BPO Sector $11 Billion Sector -> Projected to cut 2.5 lakhs starting first quarter2009.

Nasscom(7,00,000 Jobs)

IT Companies are predicted a drop of 15% in growth from 30% last year in BPO Sector


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More than the downsizing itself, which

may not involve large numbers, what

this implies is a significant drop in new

hiring -- and that will change the

complexion of the job market.

Many companies has laid off their

staffs, the number of tourists inflow to

india has come down, companies have

cut down compensations and perks etc,government and other private

companies are reluctant in starting new

ventures and starting new projects etc.

IT Projects that are halfway tocompletion, or companies that are

stuck with cash flow issues on

businesses that are yet to reach

break even, will run out of cash.


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Opportunities for Indian IT due to US recessionUS recession may be a boon for Indian offshore software

companies

The impact of recession is higher to small and medium sized(SMEs) enterprises whose bottom lines get squeezed

due to lack of spending by consumers

SMEs in the US are under severe pressure to increase

profitability and business margins to survive. This will

force them to outsource and even have M&Aarrangements with Indian firms.

India is going to be a great beneficiary of this trend which

will minimize the impact of the US recession on Indian

industry

By March 2008, India had received SME outsourcing deals

worth $7 billion from the US as against $6.2 billion in

the previous year.

Eg. (Satyam got 15 new Outsourcing Projects)


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CorrectiveSteps

taken toCheck

Recession


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In the IT sector, there should be correction in salary offerings rather than job cutting.

Taxes including excise duty and custom duty should be reduced to lighten the adverse

effect of economic crunch on various industries.

IT Industry has been largely hit by Recession , resulting in Lay-Offs. But people with skillset are required in the Industry.

Layoffs in Technical Sector need not be a doom and gloom. They could actually boost

innovation as laid-off engineers , scientists and other skilled individuals decide to

pursue their own ideas. Calling it forced entrepreneurship.

CONCLUSION

Come out with Innovative Strategies for CRM


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THANK YOU

Heres wishing you a safe voyage as we ride the waves of this

recession....

Presented By : Leo Victor

impact on recession (indian it)

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