The Indian IT services sector continues its remarkable growth as the top three suppliers report sales increases well ahead of the global market.
Tata Consultancy Services (TCS) is the biggest Indian vendor, with annual revenue up 36 per cent to 132.5bn rupees (£1.6bn). Wipro’s sales grew 30 per cent to 106.26bn rupees (£1.3bn), with Infosys up 33.5 per cent to 95.2bn rupees (£1.2bn).
Other major vendors such as Satyam and HCL Technologies posted similar levels of growth.
Nasscom, the Indian IT trade association, predicts that total exports of IT services from the subcontinent will reach $6.3bn (£3.5bn) this year, and that Indian firms will recruit an additional 93,000 staff – nearly 8,000 new employees every month.
Customer relations and finance/accounting are the biggest service areas, bringing in 86 per cent of all sales last year, according to Nasscom.
Infosys chief executive Nandan Nilekani says the growth will continue. ‘It took us 23 years to reach the first billion dollars in revenues, while we reached the next billion dollars in just 23 months,’ he said.
‘The global IT services industry is showing signs of stronger growth and Infosys is well poised to take advantage.’
And Azim Premji, chairman of Wipro and India’s richest man, says firms are broadening the scope of services supplied to overseas customers.
‘The [Indian] IT services industry is evolving from an era of routine service provisioning to one of innovative knowledge creation,’ he said.
Analyst Gartner backs up Premji’s assertion. Research vice president Sujay Chohan says cost was the main factor that initially turned companies to Indian providers, but the quality of higher-value services is a growing differentiator.
‘Indian-based offshore service providers are increasingly experienced in certain core Western back-office business processes, particularly in vertical industry sectors,’ he said.
‘Based on their rapidly growing industry knowledge and experience in delivering repetitive processes during the past few years, some leading companies are developing innovative and creative solutions.’
But eventually, Indian firms may start to face the same employee cost pressures as Western businesses, says Chohan.
‘Companies with operations in India can afford to employ qualified and skilled professionals to analyse and recommend changes to basic corporate processes for far less than it would cost them to hire such talent in the developed world,’ he said.
‘This situation may change long term as Indian companies begin to offer increasingly complex, higher-level and sophisticated process-based work, which will consume their more-skilled and qualified staff. The talent pool capable of innovating basic, low-level core processes will eventually dry up in India, just as it has in the developed world.’
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