Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Technology in India
Subject: Contemporary Business Environment
Submitted By:
Shubham Kaushik (2K92A44), Sachin Mahagan
(2K92A31), Rakesh Kumar Goyal (2K92A26), Md.
Ishtyaque Ajmeri (2K92A01), Shashank Saxena (2K92A37)
IT Exports will account for 35% of the total exports from India.
From
To
1. IT as a sector IT as an
Industry
2. Providing satisfactory services to existing Adding value to
sustain the growth increase in demand
3. Government controlling infrastructure Government
facilitating and technology
infrastructure and technology
4. IT for specialists IT for
masses
5. Fulfilling external demand Creating
internal demand
Several software-related promotional measures was taken
during this period, including reductions in telecommunication
charges for satellite links, duty-free imports of
telecommunication equipment into EPS, and excise duty
exemptions.
India was one of the few countries to enact the IT Act in the
year 2000 to enable digital signatures. This initiative aims to
provide the legal infrastructure for e-commerce in India.
1. PSTN connectivity
2. Income Tax Exemption
3. Global Parity in Telecom Infrastructure
4. Inter-connectivity of International Call Centers/IT Enabled
Services 5. Reduction in
tariffs for International connectivity
6. Interconnectivity across multiple networks
7. 7x24 support of DoT links
8. Reduce Delays in Provisioning of International Bandwidth
9. Scarcity of International bandwidth on Fiber
10. Build Supply Base of best knowledge worker.
11. Grameen Data Processing Centers
12. Creating the Ideal regulatory environment
13. IT Policy to encourage women entrepreneurs and
employment.
Porter 5 forces
Rivalry
As the industry is still in its growth stage, there is enough room
for expansion for existing players and new entrants. With the
entry of many multinational companies (MNC) are opening their
operations in India to leverage the low cost advantage provided
by India, has increased the completion ratio (CR) of the industry.
Also as there is no huge capital investment required to start a
new company, the industry see a very large numbers of small and
medium-size companies operating in a niche market. Presence of
such large number of players has made the industry as one of the
most competitive industry in the market.
Threat of Substitutes
The Indian IT industry currently enjoys a very high growth rate
due to following advantages:
High availability of skilled labour, Availability of large English
speaking population, Low cost of labour, Good government
policies (like tax holidays till 2009 for IT companies & setting up
of special economic promotion zones) But there are many
countries such as China, Philippines, and many east European
countries that has started to provide similar opportunities and
Indian IT industries always need to innovate and move into new
sectors to keep out the competition.
Buyer Power
Buyers in IT industry can be briefly classified into following
categories: institutional buyers and individual or small consumers.
Institutional buyers comprises of big and small enterprises which
outsource part of their work or implement an IT solution for
improving their processes. As the IT industry has large number of
suppliers and few entry barriers for new entrants, the buyer has a
many option to choose from thus have a large bargaining
leverage. Similarly the individual consumer enjoys options of
plenty and has large bargaining power.
Supplier Power
As there exist many competitive suppliers in the market the
supplier has very little or no power in this industry.
Barriers to entry
An IT company can be started with very low initial cost, further
the government policies also promotes the entrepreneurs by
providing benefits in terms of tax holidays and building Software
Technology Parks. Apart from this there is large amount of
venture capitalist who are ready to fund new start-ups enabling
them to scale up.
Indian IT Industry - Long term
profitability sector
Government Initiatives:
The Foreign Trade Policy 2004 - 2009 permits import of all
kinds of computers (except second hand computers) in India
without any licenses. In order to promote domestic investment,
foreign direct investment, transfer of technology / process know-
how, technical collaboration, joint venture etc in India and export
IT software products and services from India to the global
market, both Government of India and State Governments in
India have been offering a series of policy packages including tax
breaks, import duty concessions etc under various schemes
which include:
• Specified parts of set top boxes and specified raw materials for
use in the IT/electronic hardware industry to be exempted from
customs duty.
• Allocation to the Department of Information Technology
enhanced to Rs.1, 680 crore in 2008-09 from Rs.1, 500 crore in
2007-08; Two Schemes for establishing 100,000 broadband
internet-enabled Common Service Centres in rural areas and
State Wide Area Networks (SWAN) with Central assistance under
implementation; new scheme for State Data Centres also
approved; Rs.75 crore provided for the common service centres;
Rs.450 crore provided for SWAN and Rs.275 crore for the State
Data Centres.
Budget 2009-2010
Announcements in Current Budget
Expectation:
Actual:
Impact:
IT and Development
3. Quality Manpower
Indian programmers are known for their strong technical skills
and their eagerness to accommodate clients. In some cases,
clients outsource work to get access to more specialized
engineering talent, particularly in the area of telecommunications.
4. Government Policies
IT is a part of government's national agenda and all policies are
driven to achieve maximum benefit to their industry. The reforms
have reduced licensing requirements and made foreign
technology accessible. The reforms have also removed
restrictions on investment and made the process of investment
easier The government is actively promoting FDI, investments
from NRIs (Non-Resident Indians) including Overseas Corporate
Bodies (OCB's) owned by the NRIs. FDI can be brought in through
the automatic route, based on powers accorded to the Reserve
Bank of India. Till 1994, DOT was the sole provider of basic
telecom services in India.
The new National Telecom Policy has opened the field for private
participants. The IT Bill passed in 2000 provides a legal
framework for the recognition of electronic contracts, prevention
of computer crimes, electronic filing of documents, etc
Amendments have also been proposed in the Indian Evidence Act,
Indian Penal Code and the RBI Act. The IPR law in India.
Risk Factors
1. Manpower availability and cost
India has more than 1,900 institutions from which about 70,000
software professionals graduate each year. This is further
supplemented by private training centers which coach about 40-
45,000 students each year. With many students opting for further
studies/ other employment streams and several overlap between
students at institutions and training centers, it is estimated that
India can supply about 75,000 software professionals each year.
Despite this huge addition to the manpower base each year, the
demand-supply situation is expected to remain tight during the
next 3years. The excess of demand over supply will further push
salary levels upward. Salary levels for experienced and qualified
professionals are broadly at par with developed countries. The
rising cost of manpower has already eroded India's position as a
cheap source of labor to a large extent. This increases the risk of
losing business to competing countries like China and Russia who
have cheaper labor, if they would be able to match the quality
Indian professional’s offer. Moreover, to maintain profitability on
the increased cost, software companies will have to increase
productivity i.e. maximizes revenue/profits per employee. Till the
time Indian software companies are able to move up the value
chain to products and transcend the cost barrier, they carry a risk
of Low profitability.
2. Manpower turnover
4. Availability of infrastructure
6. Government policies
7. Financing
8. Quality
India has gradually moved into high quality but competitive cost
bracket. Currently, many of the large companies hold quality
certificates. However, there are various quality levels and
standards. Moreover Indian companies need to pay more
attention to Total Quality Management and not just Production
process quality.
9. IPR
• Employment generation:
Direct employment in the sector is expected to be 2.0 million by
end of FY08, growing at a CAGR of 26% in the last decade,
making it the largest employer in the organized private sector of
the country.
Future overview
• Indian IT industry is riding high with rise global spending on
technology products and related services. According to the
International Data Corporation (IDC) estimates, the global
spending on technology related services reached US$ 1.58
trillion (excluding R&D and engineering) in 2006 and is
expected to grow at CAGR of 7.12% to reach US$ 2.1 trillion by
2010. Notably, IT services segment (excluding BPO)
contributed around 29.8% of the total global spending on
technology products and related services in 2006.