1. INDIAN IT OUTSOURCING Debmalya Khan

2. AGENDA

• Industry Overview

• Outlook

• Major Players

• Rivalry among existing players

• Company Overview

• SWOT Analysis

• Factor evaluation Matrix

• Competitive Strategies in Economic Downturn

3. INDUSTRY OVERVIEW

• Steadily growing industry

• $150 million in 1991-92 to $5.7 billion in 1999-2000 ( $4 billion worth of software exports )

• Annual growth rate of Software Exports - over 50 percent

• Software exports to around 95 countries around the world

• More than one third of the global Fortune 500 companies outsource requirements to India

• Upcoming market openings for Indian IT industry

• • IT Services

• • Software products

• • IT- enables services

• • E-business

• Source: Nasscom

4. OUTLOOK

• If company guidance's are anything to go by, then the outlook for the industry seems bleak http://www.businessweek.com/globalbiz/content/jan2009/gb20090121_832742.htm

• Collapse of the US car industry to impact TCS, Wipro and Infosys

• During recessions, tech spending has historically fallen by more than the GDP

• A McKinsey study indicates that IT spending has typically fallen by 5-7 times the GDP in the past recessions

• The BFSI sector that pioneered the move offshore idea has been butchered and is expected to worsen

5. MAJOR PLAYERS

• Infosys Technologies

• Wipro Technologies

• Tata Consultancy Services

• IBM Global Services

• HCL Info systems

• Cognizant technology solutions

6. RIVALRY AMONGST EXISTING PLAYERS

• Multiple players:

• • TCS

• • Accenture

• • Wipro

• • Infosys

• • Cognizant

• • HCL Tech

• • Patni . . . . The list is large

• Competition is global in nature and stretches across boundaries and geographies

• Replication of the Indian off shoring model by MNC IT majors

7. RIVALRY AMONGST EXISTING PLAYERS ( CONTD )

• Until the recent crisis, the market as a whole was expanding

• A growing market meant that there was enough and more for all the players in the market

• The problem of stagnating markets

• Implies that all the players need to gun it out amongst themselves to grow revenues

• Rivalry expected amongst existing players to intensify

8. INFOSYS TECHNOLOGIES

• Specializes in delivering technology enabled business

• Started in 1981 with seven people and cash worth US $250

• Business and technology consulting

• Systems Integration

• Application services

• IT outsourcing

• Business Process outsourcing

• IT infrastructure services

9. INFOSYS TECHNOLOGIES ( CONTD )

• Global presence with over 50 offices and development centers across the world

• 2008 turnover excess of $4 billion

• SOURCE: www.infosys.com

10. SWOT ANALYSIS

• Strengths :

• • Enhanced competitive edge Indian based operations

• • Low labor costs, high relative rates of inflation

• • Relatively high skill levels in IT

• • Extremely strong financial position enormous capital to expand

• • Global brand respected across the world

• • Positive Cash flows Supporting prospective global operations

• • Varied Domains of Businesses foray into products and services

11. SWOT ANALYSIS( CONTD )

• Weaknesses

• • Occasionally falters to secure contracts in North America missing out on lucrative business

• • Small player as far as global players are concerned

• • Multi cultural environment

• • Business consulting practices dominated by major players like Accenture and IBM

12. SWOT ANALYSIS ( CONTD )

• Opportunities

• • Lucrative expansion options in China

• • Alliance between Infosys and Schlumberger

• • European and North American companies to outsource a portion of BPO operations

• • Provides outsourcing and Cost reduction strategies help clients during global recession

13. SWOT ANALYSIS ( CONTD )

• Threats

• • Move to offshore service companies in countries like China or Korea

• • Has to compete for skilled labor may affect wage levels and retaining staff

• • Competitors coming from China, Korea low cost labor and adaptive to western practices

14.

• IFE Matrix indicates that India IT Inc. is strong and it has done well, so far, to overcome its weakness

INTERNAL FACTOR EVALUATION MATRIX

15.

• EFE Matrix indicates that India IT Inc. is not responsive in exploiting opportunities and in mitigating the impact of threats

EXTERNAL FACTOR EVALUATION MATRIX

16. STRATEGIES IN DOWNTURN

• Companies such as Infosys exhort employees to go on a 1-yr sabbatical work for an NGO http://www.business-standard.com/india/storypage.php?autono=340253

• Cash rich firms such as TCS, Wipro and Infosys scouting around for dirt cheap acquisitions

• Case in point

• • TCS $505M acquisition of Citigroups Indian back office operations in October 2008

• • Wipros acquisition of CITOS for $127M in December 2008 http://www.vccircle.com/500/news/wipro-acquires-citi-technology-services-for-127m

• Slow down in wage hikes and a near recruitment freeze

17. REFERENCES

• http://www.marketingteacher.com/SWOT/infosys_swot.htm

• www.nasscom.org

• www.infosys.com

• www.bizzbuzz.wordpress.com

18. THANK YOU