What Are IT Enabled Services Commerce Essay

IT enabled Services is believed to be radical IT outgrowth which looks after all outsourcing demands including, Customer Relationship Management ( CRM ) , Back Office Operations/Revenue Accounting/ Data Entry, Data Conversion including Finance & A ; Accounting/HR Services, Transcription/Translation Services, Content Development/ Animation, Other Services including Remote Education, Data Search Market Research, Network Management & A ; Consultancy Services etc.

The ITES/BPO industry has performed excellently good over the past decennary with a compound one-year growing rate transcending 50 % . The triggers for this are handiness of high quality skilled/semi skilled labors, low cost base and incremental advantages accruing from the larning curve go on to be the critical success factors. In add-on, the contributing revenue enhancement environment in the signifier of revenue enhancement vacation benefits given to the industry under the Software Technology Park of India ( STPI ) and the Export Oriented Unit ( EOU ) strategies have besides acted as a accelerator to the growing.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

BPO is witnessing an increasing accent on the cost-plus, extra strategic levers that it can present include invention through concern procedure re-engineering of the underlying concern procedure being outsourced, improved competitory placement ( internally and externally ) , pull offing client outlooks, lift of the strategic function of the maintained organisation, optimum resource allotment, support for globalisation of their concerns, and engineering support and entree. This has besides heightened attending ensuing in enterprise-wide rating of BPO chances which is in bend opening new avenues to research. This steady enlargement in range coupled with low incursion degrees is back uping high growing for BPO.

Size and construction of the IT-BPO industry[ 1 ]

Harmonizing to NASSCOM, domestic BPO section is expected to hold the fastest growing of about 40 per centum to make USD 1.9 billion in FY2009. The entire employee base stood at 700,000 in FY2008 which is estimated to be 789,806 in FY2009. ITES/BPO exports grew from USD8.4 billion in FY2007 to USD 10.9 billion in FY2008 and are estimated to turn by 17.5 per centum to USD 12.8 billion in FY2009[ 2 ].

The size of BPO contracts has increased to between USD 5 million and USD 50 million from less than a million dollars. As a proportion of national GDP, the overall IT/ITES sector grosss have grown from 1.2 per cent in FY1998 to an estimated 5.8 per cent in FY2009.

The BFSI ( Banking, Financial Services and Insurance ) sector ‘s portion of the overall pie of services offered by ITES-BPO companies dropped to 28 per centum in FY2008 from 31 per centum in FY2007. On the other manus, verticals like aerospace, authorities & A ; defence and services & A ; logistics increased their portion[ 3 ].

The enlargement in the range of BPO has been accomplished by an every bit adaptative scope of perpendicular industries being catered to. Large service suppliers are reacting to client demands for a more extended service portfolio by spread outing into related countries of Finance and Accounting services, HR outsourcing, etc. Additionally, big IT services houses are leveraging their bing client relationships every bit good as expertness in IT outsourcing and other countries of concern services outsourcing, such as Finance and Accounting, insurance, health care, and payment services, etc. , to spread out their capablenesss in the client attention section. Outsourcing houses offering conventional BPO services have now started offering higher value added services like KPO and LPO services.

Key Points of Indian ITES-BPO Industry[ 4 ]

Strong basicss: India ‘s cardinal advantages of abundant endowment and lower comparable cost constructions are believed to be sustainable over the long term. With a immature demographic profile, where over 3.5 million English speech production alumnuss and graduate students are added yearly to the endowment base, no other state offers a similar mix and graduated table of human resources. Additional productiveness betterments and the development of tier 2/3 metropoliss as future bringing centres, is expected to heighten India ‘s cost fight, along with the fact that Indian IT-BPO companies have put in topographic point first security criterions, to guarantee high degrees of quality and service bringing. Indian companies are able to supply a combination of onsite and seaward services on a 24-hour footing therefore taking advantage of clip zone differences.

Robust enabling environment: Timely authorities policies and increased public-private engagement have played a cardinal function in developing an enabling concern environment for the Indian ITES/BPO industry.

Enhanced value bringing capableness: The clients are looking at the state ‘s service suppliers as transmutation spouses, introducing and developing customized solutions to turn to their demands more than merely cost nest eggs.

Global BPO Market

Most companies and authoritiess around the universe position sourcing as a planetary activity. The cardinal purpose of sourcing is to accomplish concern aims. Therefore, sourcing strategically identifies whether operations and procedures should be offshore, near-shore or on-site. As the IT/ITES sector continues to turn in size, many big organisations have already made sourcing a nucleus portion of their concern scheme.

The universe concern procedure outsourcing market is projected to make about USD 975 billion by 2012 with a CAGR of 12 per centum. The US represents the largest BPO market worldwide with a market portion estimated at 53 per centum in 2008. While Asia Pacific is expected to keep a CAGR of 20 per centum over the old ages 2008-2012 representing the fastest turning market[ 5 ].

Indian BPO Sections

The bringing footmark of the Indian BPO sector extends to over 75 metropoliss across 25 states outside India. Within India, the bringing footmark of the BPO sector extends to more than 30 metropoliss across the state, and covers many Tier- 2/3 metropoliss.

ITES, which started with basic informations entry undertakings over a decennary ago, is witnessing an enlargement in its range of services to include progressively complex procedures affecting rule-based determination devising and even research services necessitating informed single judgement. It now offers services such as cognition procedure outsourcing ( KPO ) , legal procedure outsourcing ( LPO ) , games process outsourcing ( GPO ) and design outsourcing among others. The broad scope of services provided by the BPO can be categorized into two groups:

Horizontal BPO: Horizontal BPO involves map centric outsourcing. Examples of horizontal BPO are outsourcing in procurance, paysheet processing, HR, installations direction and similar maps. Automatic Data Processing ( ADP ) is an illustration of a horizontal BPO seller. ADP focuses on supplying services in horizontal maps such as paysheet, HR, benefit disposal, revenue enhancement solutions, etc.

Vertical BPO: A perpendicular BPO focuses on turn outing assorted functional services in a limited figure of industry spheres. It covers assorted horizontals to provide a peculiar industry as a whole. Healthcare, fiscal services, fabrication and retail are illustrations of perpendicular BPO spheres.

hypertext transfer protocol: //www.nasscom.in/upload/58314/image5.jpg

Consequence of Global Economic Slowdown

While the BPO industry is bound to be impacted by the current fiscal crisis, the industry has started supplying services to a wider set of verticals, therefore cut downing their exposure to any one vertical. For case, the BFSI sector ‘s portion of the overall pie of services offered by ITeS-BPO companies dropped to 28 per centum in FY2008 from 31 per centum in FY2007 and this tendency is expected to go on. Opportunities exist in the signifier of emerging verticals such as cognition procedure outsourcing, legal procedure outsourcing, and technology procedure outsourcing which all are multi-million dollar addressable markets. BPO sector recorded gross growing of 31.6 per cent, amounting to USD 12.5 billion in 2007-08, of which export gross accounted for over 87 per cent.

The industry footmark is steadily spread outing to other geographicss. However, India still remains the cardinal finish for offshoring due to its copiousness of skilled work force, linguistic communication capableness and cost nest eggs. It is expected that India will go on to take the battalion among Asia Pacific states with 11.4 per centum growing in domestic IT disbursement projected for 2009.The engineerings that deliver important cost nest eggs such as planetary bringing theoretical account, coincident processing, virtualization, incorporate communications and unfastened beginning will see higher acceptance in 2009. By 2012, the industry is expected to make USD 28-30 billion[ 6 ].

BPOs are traveling to Tier II metropoliss like Mysore, Trivandrum, Vishakapatnam, Pune etc. and rural countries to cut costs. The low cost of operations and well lower employee abrasion rate are the two cardinal factors that have encouraged many BPO organisations to widen their operations in little towns and small towns. The current crisis has resulted in a crisp autumn in abrasion rate, from 30-40 per cent ; it is down to 20-30 per cent[ 7 ].

Way forward[ 8 ]

India with its natural competitory advantage is likely to play a immense function in assorted sections of the ITeS industry:

The Indian life industry is quickly turning as a major outsourcing hub with a growing rate of 30 per cent.

The Indian KPO sector is estimated to go a USD 10 billion industry by 2012, from the current size of USD 4 billion.

India is fast going a hot finish for outsourced e-publishing work. As per a Alliance of Indian Industry ( CII ) study, the industry is turning at an one-year rate of 35 per cent and India ‘s outsourcing chances in the value-added and nucleus services will assist do the publication BPO industry worth USD 1.46 billion by 2010.

As per a CRISIL survey, technology services outsourcing ( ESO ) is poised to be the following large chance in the Indian outsourcing services industry. The ESO sector is likely to turn at a compounded rate of 26 per cent and station grosss aggregating about USD 7.5 billion by 2012.

Gaining the potency, after IT Parks and IT particular economic zone ( SEZs ) , the Government has cleared a proposal for making much larger Information Technology Investment Regions ( ITIRs ) to give a bonus to the state ‘s turning IT and ITES sector.


The aim of set abouting a reappraisal of the industry is to depict and estimate the economic/business conditions and tendencies impacting companies in India in the specified industry. This reappraisal provides a deeper apprehension of the industry in which the company operates.

An apprehension of the same allows us to measure ABC India ‘s maps performed, assets employed and hazards assumed in relation to similar entities within the industry.

However, it is of import to observe that within the ITES/BPO services infinite Indian companies operate on different economic basicss vis-a-vis subsidiaries/ subdivision of abroad companies. Typically the Indian subsidiaries/ subdivisions of abroad companies operate as a confined service supplier whereas the Indian companies are entrepreneurial ventures. Thus the economic and hazard parametric quantities tend to differ the manner Indian companies operate vis-a-vis the prisoners, for case, prisoners are insulated from market and monetary value hazard and typically they do non take engineering enterprises or ain any non-routine intangibles.

Given the fact that in a service industry, with the altering profile of companies, they tend to supply extra services and value-added services over a period of clip. Specifically, it is a given phenomenon in the services infinite a service receiver ab initio tests the effectivity, seasonableness, deliverable and quality of the service supplier ‘s activities. Thereby, the degree of activities, outsourced addition over a period of clip. However, in any given state of affairs the confined service suppliers continue to be hazard insulated from the service they provide be it a low degree testing or a code coevals or high-ranking design. This fact is an indispensable component in comparing the effectual pricing of a confined vis-a-vis Indian service suppliers.