indian software & services : key ingredients for success
TRANSCRIPT
Indian Software & Services
: Key Ingredients for Success
National Goal National Goal
“Make India a Global Information Technology
power and one of the largest generators and
exporters of software in the world within 10
years.”
0 10 20 30
Ireland
India
Singapore
Israel
Philippines
China
Mexico
Hungary
Weighted RankingFactor Weight India Ireland
SEGMENT EXPERTISE 6 12 6LABOR COST 4 4 - 8LABOR SUPPLY 4 8 0EASE OF BUSINESS 3 0 6EASE OF VISAS 3 - 3 3ENGLISH SPEAKING 3 3
3TECH. COMPETENCE 3 3
3EDU. & TRAINING 2 0 2GOVT. INCENTIVES 2 0
4SECURITY 2 0
2TELECOM INFRA. 2 - 2 4DOMESTIC MARKET 1 1
2
WEIGHTED AVERAGE - 26 27
Beginning ……. Beginning …….
Extract of a World Bank Report - 1991
Policy Creation Policy Implementation Operational Flexibility
Challenges to GrowthChallenges to Growth
EOU’s & EPZ’s -
- Not Very Congenial for Software Industries
- Being implemented by the Commerce Ministry
- Foreign Investment Promotion Board
- Physical Boundary
- Minimal Communication Infrastructure
Result: Not Focused, lack of understanding, and discrete approach
Policy during 1991 Policy during 1991
A non-profit society set-up in 1991 by
the
Ministry of Information Technology,
Govt. of India to promote & facilitate Software Exports from India
Software Technology Parks of IndiaSoftware Technology Parks of India
One Stop Shop One Stop Shop
STP Scheme is being operated by the technical body
Investment Approvals decentralized Most of the authoritaties are sub-Delegated to
the Directors of the STPI Centers
Result: A De-Centralized Single Window Scheme
STPI DifferentiatorsSTPI Differentiators
Benefits
Complete duty free import 100% foreign equity permitted No corporate income tax till 2010 Dedicated Data Communication links Single window Government clearance Custom bonding and export certification provided at single
point.
What is STP Scheme? What is STP Scheme?
Industry
Academia
Finance
Government
STPI : Catalyst for Synergy STPI : Catalyst for Synergy
Earthstation Location
STPI Spread across …STPI Spread across …
Dehradun Rourkela Madurai Tiruchirappalli
Thirunelveli
Pondicherry
Vijayawada Tirupati Warangal Nasik Kolhapur
Other Sub-Centers
Under Implementation Gurgaon Gangtok Allahabad Agra Varanasi Meerut
BhubaneshwBhubaneshwarar
CoimbatorCoimbatoree
MysorMysoreeManipaManipa
ll
PunePune
Navi Navi MumbaiMumbai
HyderabaHyderabadd
Delhi - HQJaipurJaipur
NoidNoidaa
Mohali/ChandigarhMohali/Chandigarh
ChennaChennaii
HubliHubli
GuwhatGuwhatii
SrinagaSrinagarr
IndoreIndore
VizaVizagg
AurangabaAurangabadd
MangalorMangaloree
ShimlaShimla
KolkatKolkataa
GandhinagGandhinagarar
ThiruvananthapurThiruvananthapuramam
LucknoLucknoww BhilaiBhilai
NagpurNagpur
KanpurKanpur
Jalandhar Durgapur Kharagpur Shillong Agartala Salem
BangaloreBangalore
Map Not to Scale
Exponential Growth of Software IndustryExponential Growth of Software Industry
485 734 10851750
2650
3900
6100
8250
1000
2000
3000
4000
5000
6000
7000
8000
9000
94-95 95-96 96-97 97-98 98-99 99-00 00-01 '01-02
Year
US
$ in
Mill
ion
India : Vital Value Add
India’s Value Proposition on IT-Enabled India’s Value Proposition on IT-Enabled
Cost
• 40-60% cost reduction for
offshored process
• Labour cost arbitrage, the
reason for cost savings, likely to
exist for the next 20-30 years
Productivity
• Faster turnaround time
- Time Zone difference
- 24x7 service• Learning curve effect –
centralization within company
Quality
• Established methodologies and
processes for better performance
• Well defined quantifiable metrics for
quality & process
• Access to highly-qualified skill poolSource:McKinsey
Quality vs Productivity in IndiaQuality vs Productivity in India
Source:McKinsey
98
95
IndiaFacility
UK Facility
8
20
IndiaFacility
US Facility
92
85
IndiaFacility
US Facility
120
100
IndiaFacility
UK Facility
Quality
Productivity
No. of Correct transactions/Total transactions (%) Total Satisfaction factor
No. of transactions/hour (indexed to UK) Average speed of answer (Secs)
UK-based retail bank US financial services company
Success Formula
• Investment C• Telecom/Datacom Infrastructure• Cluster & Incubation Development• Entrepreneurship and VC Funding• Internationalisation of HR• E-Governance• Quality Systems & Methods
STPI-Network OperationsCenter
Connectivity ExchangeConnectivity Exchange
Cyber Park
Server Farm
International Fiber Landing PointInternational Fiber Landing PointIntl.Fiber
India to
USA
Spectranet
Metro Fiber Reliance
Metro Fiber
BSNL
Metro Fiber
9 Satellite Dishes4 Metro Fibers
Bharti
Metro Fiber
Mangalore
Manipal .
Enabling ClustersEnabling Clusters
Earthstation Location
IncubationCenter
13 Companies
US $ 50.52 M Exports
24 CompaniesUS $ 8.12 M
Exports
Started Operation
Mysore
Bangalore
Infrastructures : ITPL, Bangalore, HITEC City Hyderabad, Cyber Park Bangalore
Venture Capital Environment in KarnatakaVenture Capital Environment in Karnataka
12 Domestic Small Funds
16 Overseas Funds
28 Large Funds
50% of above Funds are Head Quartered in Bangalore
Concept of Investor/Incubation Combo is picking up
Human Resources in Karnataka StateHuman Resources in Karnataka State
Engineering Colleges 97 Polytechnics 181 Medical Colleges 27 General Colleges 812 Universities 11
Technical University 1 Agricultural Universities 2 Health University 1
10% Indian Graduates are produced in Karnataka
E-Governance Initiatives E-Governance Initiatives Mukya Vahini – Decision Support System for
Administration Bhoomi & Nondani – Land Records Computerisation &
Registration Khajane – E-enabling of Treasuries through linking of 250
treasuries to manage the complete expenditure of the state Therige – E-enabling Commercial Tax Offices and
Outposts Reshme – Online Transaction support for Sericulture
Farming E-Seva – One Stop bill payment center covering all
utilities, taxes, etc
Thank You...Thank You...
Sanjay @ inknowtek.com InKnowTech Pvt. Ltd.,A-306, STPI Complex,Electronics City, Bangalore – 561 229