Southern States Scorch Software Exports

[talk2santosh]

www.indiasoftware.com/news/n1406.html

Southern States Scorch Software Exports
14 June 2004, Bangalore
Source: The Economic Times

The South continues to account for more than half of the country’s total software services exports. The three southern states - Karnataka, Tamil Nadu and Andhra Pradesh — together account for 54.6% of India’s total software exports of Rs 56,250 cr. According to Nasscom, the trade body for software and service exports, total software exports in 2003-04 fiscal was $12.5 billion (Rs 56,250 cr), a 30.5% jump over $9.6 billion (Rs 43,200 cr) made in the previous year.

Karnataka, as in the past, led the southern states in software export earnings. The state earned Rs 18,100 crore, a 46% jump over Rs 12,350 cr earned in the previous fiscal. Including hardware, Karnataka’s total IT exports were Rs 19,800 cr. Hardware exports from the state last fiscal was Rs 1,700 cr (Rs 800 cr previously). Tamil Nadu’s software export was 42.11% lower than Karnataka’s. In fiscal 2003-04, software exports were Rs 7,621.50 cr, a 21% jump over previous year earnings of Rs 6,315.51 cr. Overall IT exports from Tamil Nadu were Rs 7,740.38 cr. The hardware sector’s contribution was Rs 118.88 cr.

When compared to Tamil Nadu, software exports of neighbour Andhra Pradesh showed a 37% growth. Software export last fiscal earned the state Rs 5,025 cr, up from Rs 3,688 cr the year before. For Andhra, a major part of the total exports came from the fast growing ITeS/BPO sector. Export earnings from the ITeS sector were Rs 2,347 cr, which accounted for 47% of the total IT exports. On an annualised basis, ITeS sector exports showed a huge growth of 66%.

Karnataka, which is fast growing into the most preferred destination for BPO companies, saw its earnings from BPO touch Rs 2,237 cr, up 126% over previous fiscal. Last fiscal saw a total of 168 new firms coming into the state. Their investment was Rs 2,400 cr. These include 110 foreign firms which invested Rs 1,970 cr in Bangalore. Forty-four new BPO firms were set up during the period. Bangalore is the biggest software export earner in the state. The city registered the bulk of exports at Rs 17,474 cr, while other cities exporting software were Mangalore (Rs 456 cr) and Mysore (Rs 180 cr). There are 1,322 STPI registered firms in the state. During last fiscal, the state attracted two new foreign equity companies every week. Tamil Nadu has 869 software firms, while Andhra Pradesh has a total 1,060 STPI approved units, 860 of which are contributing to the revenues.


Domestic BPO Biz set to Become Big
14 June 2004, Bangalore
Source: The Economic Times

Cross-border outsourcing might be grabbing all the limelight now, but it’s not too far away when the domestic business process outsourcing (BPO) industry may emerge to be equally important. At a seminar on opportunities and challenges for the domestic BPO industry at Nasscom’s India ITES-BPO Strategy Summit 2004 , industry specialists said that although the cost arbitrage factor may not be the primary driver for the domestic BPO model, the ability to transform business and add value may catapult this still pre-nascent industry to success.

“The time is right for every organisation to address this issue,” said Sudarshan Sampathkumar, partner, Accenture. He said for the Indian model to work, outsourcing must go beyond merely cost reduction. “Our experience shows a potential to reduce costs, however there is a big shift to be had by great and more effective utilisation of IT outsourcing ,” he added. He said that while IT outsourcing was an excellent starting point in the domestic BPO segment, there was large potential in other areas like finance and accounting as well as many other activities.

The ability among Indian firms to ‘value segment’ is what will drive success in the industry, Kuruvilla Markose, CEO, SerWizSol said. He added that the strategy should include building delivery mechanisms at a cost that saves money for a domestic client while simultaneously building consulting capability around customer experience management. Giving the public sector unit (PSU) perspective on domestic outsourcing, NC Jain, deputy manager, IT, Indian Airlines said that there was large scope for BPO in varied areas of an airline’s operations, from revenue accounting to pilot training and market research among many others. With regards to Indian Airlines, Jain said that it had already outsourced a number of processes like call centre, frequent flyer processing and a part of its Website design process. He added that, in two years’ time, IA planned to outsource more.

One of my friends told me that in Bangalore the supply for skilled people are more? Discuss - whether the salary levels are high / low in Bangalore?

Is BPO industry good for India or Indians?

[talk2santosh]

India's crumbling 'Silicon Valley' losing its lustre

Tue Aug 17, 1:17 PM ET Add Technology - AFP to My Yahoo!



BANGALORE, India (AFP) - The success of India's hi-tech and outsourcing industry was built on Bangalore, but the southern city where the boom began has now become a victim of its own success.


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The rapid growth is putting major pressure on the city's already congested roads and software firms complain that acute power cuts are taking a toll on business.


According to the Software Technology Parks of India, which facilitates hi-tech exports, 284 technology firms have set up base in the "Silicon Valley" of India over the last two years taking the total to 1,322.


"We all believe that the infrastructure problem is serious here. To sustain and grow, we need to go to places where there are opportunities -- both manpower and infrastructure," said Azim Premji, the chief of Wipro, India's third largest software exporter.


"We have not seen any infrastructure growth in the last five years in Bangalore and we do not foresee any growth in the next five years. It is difficult to sustain in Bangalore," said Premji, who is India's richest person.


He said Wipro, of which he owns 84 percent, was looking to expand not in Bangalore but in other Indian cities that have tried to woo IT including Hyderabad in the south, Pune in the west, the capital New Delhi and eastern metropolis of Calcutta.


Karnataka, the state of which Bangalore is capital, is still growing with a 46 percent jump in software exports in the last fiscal year due to burgeoning outsourcing by Western companies.


At four billion dollars last year, Karnataka's software exports account for one-third of the total across India.


Infrastructure was a key factor in bringing IT firms to Bangalore, along with its huge pool of English-speaking engineering graduates and mild hillside climate that offers respite from India's sweaty summers.


Since 1985 when Texas Instruments became the first multinational firm to set up a hi-tech development centre in Bangalore, the trappings of luxury such as restaurants, pubs and upscale boutiques have sprouted up in the city.


But the wealth has come at a price. In a city of six million people, the narrow roads and bylanes are packed by two million registered vehicles. Last year 886 people died in traffic accidents.


Transport department officials said between 600 and 700 vehicles were registered daily.


To add to the woes, Karnataka has a power shortage of 1,500 megawatts -- which officials said could grow to between 3,000 and 4,000 megawatts in the next five years if the rapid growth continues.


"There is no doubt infrastructure has worsened over the last three years," said Avinash Vashistha, managing director of NeoIT, an outsourcing and software development firm here. "Bangalore is not a desirable place to live anymore."


He said living costs were also being driven up by a shortage of hotels and quality apartments.


"As far as outsourcing is concerned we are asking our clients to look at other cities either in Karnataka or outside. I am scared about the situation three years down the road, leave alone 10 years," Vashistha told AFP.


"What they (the government) do right now may well fall short of the ongoing growth Bangalore may see," he said.





But the administration may have other priorities. The state government was voted out of power this year amid feelings that both Bangalore and New Delhi had neglected debt-ridden farmers in other parts of Karnataka as it championed IT.

Karnataka's new leader, Chief Minister Dharam Singh, has promised the industry that his government would take up infrastructure issues in Bangalore on an urgent basis.

Industrialists said they were not asking the government to ignore the poor -- but wanted more concrete planning to manage Bangalore's growth.

"We are not asking for the betterment of Bangalore at the expense of rural areas," said Sridhar Mitta, president outsourcing firm e4e India.

But he added: "Today one gets the impression that Bangalore is going to be abandoned in terms of infrastructure and that is not right."




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