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Geo-political, Economic, and Human Factors PowerPoint Presentation
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Geo-political, Economic, and Human Factors

Geo-political, Economic, and Human Factors

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Geo-political, Economic, and Human Factors

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  1. Geo-political, Economic, and Human Factors Domestic Policy on Information Technology / Outsourcing: Legislative power vested in Parliament consisting of President and two legislative bodies ■ Council of States: 245 members (six year terms) ■ House of the People: 550 members (two year terms) Domestic Policy on Information Technology / Outsourcing: For fiscal year 2010: measure extended to exempt IT-BPO (information technology and business process outsourcing) firms  from paying taxes on their profit from export of software and services Economy of India ■Gross National Income (GNI): $1.07 trillion Equivalent to $950 per head ■Gross Domestic Product (GDP) Increased by an average of 6.1%, per head, per year ■Trade Deficit (projected 2009): $28.7 billion Equivalent to 3.5% of GDP ■Inflation, average annual rate (2008): 8.7%

  2. Geo-political, Economic, and Human Factors • Human Factors • Population: • ■ The world’s second most populous country: 1,028,610,328 • ■ Population density is 325 persons per sq km. • Language: • ■ Official language is Hindi - spoken by about 30% of the population. • ■ English is used as an associate language for many official purposes. • Education Enrollment: • ■ The world’s second most populous country: 1,028,610,328 • ■ Primary school enrollment: 88.7% of pupils in the relevant age-group • ■ Secondary school enrollment: 54.6% of pupils in the relevant age-group • ■ Collegiate universities enrollment: 10.0% of students in the relevant age-group • Education Funding: • ■ Budgetary expenditure on education and literacy for 2008-09 was forecast • at US$5,570 million, equivalent to 3.7% of total spending.

  3. Vendor Capabilities ■ IT-BPO or IT/ITES (IT Enabled Services) industry came into existence roughly 2 decades ago. ■ As of end 2007: contributed to roughly 5.2% of India’s GDP. Industry revenues (2008): 64 billion. ■ Direct employment expected to reach 2.23 million and indirect employment approx 8 million by the end of 2009. ■ Industry matured considerably over the last decade. ■ Expansion of services from basic transaction-based services to more complex research and analysis-based services requiring knowledge of various verticals/domains. ■ Focus shifting from being a provider of purely low cost services to high quality at a competitive price. ■ Increased geographical penetration of services to countries apart from the U.S.

  4. Vendor Capabilities • Number of vendors: the current NASSCOM membership base has over 1200 companies that include Indian as well as multinational companies (such as IBM, HP) that have a presence in India. • Top 5 vendors: • ■Tata Consultancy Services Ltd: Revenues (2008): US$5.7 billion; No of employees: 108,800 • ■Infosys Technologies Ltd: Revenues (2008): US$4.2 billion; No of employees: 91,217 • ■Wipro Technologies Ltd: Revenues (2008): US$2.9 billion • ■ Mahindra Saytam (formerly Satyam Computer Services Ltd): Revenues (March 2008): US$2.1 billion; No of employees: 50,570 • ■ HCL Technologies Ltd: Revenues 2008: US$1.9 billion; No of employees: 52,714 • Others Important vendors: • ■Mindtree, Polaris Software Laboratories, Patni Computers, I-Flex Solutions

  5. Risks and Mitigation Risk:Business interruption due to terrorism, military dispute, or Acts of God Mitigation:Anticipate delayed business operations and staffing shortages Increase physical security measures in areas / times of high risk Develop emergency contingency plans Risk:Corruption within the local business and political communities Mitigation:Seek local legal advice to identify common forms of local briberyDetermine legitimate payments and refuse illicit bribe requests Risk:Bureaucratic delays and governmental confusion Mitigation:Develop contracts with clarity and precisionEnsure familiarity with required regulations at all levels of government Risk:Power shortages and electric outages Mitigation:Anticipate delayed business operationsProvide back-up generating power if acquiring physical space

  6. Risks and Mitigation Risk:Security Risks due to contractor access to private and/or secure data Mitigation:Share only the minimum amount of data necessary for the contractor to perform the contracted services Develop best practices for security with the contracting firm, including: ■ Data protection policies and requirements in the contract; review with the contractor ■ Frequently review where data are and all parties that have access to data■ Identify new vulnerabilities and risks■ Review and audit the contractor's security practices and handling of data■ Require security reports from the contractor■ Request employee security training from the contractor, where possible Risk:Outsourcing contractor is not familiar with the industry or business operations being outsourced Example :A noted American telecom firm outsourced a software coding project to an Indian-based contractor. ■ The contractor had no experience with the American telecom industry ■ Contractor did not know how to code the required software applications ■ Project languished and had to be finished in-house

  7. Benefits of Outsourcing to this Location • Favorable Economic and Political Environment for IT outsourcing in India • For over a decade India has been at the forefront of the IT outsourcing movement, with nearly 60% of that activity coming directly from the US. • India exhibits a high level of cooperation between the private and public sector in setting pro-IT policies: • ■Software Technology Parks of India (STPI) (government) • ■ National Association of Software and Services • Companies (NASSCOM)

  8. Benefits of Outsourcing to this Location • Human benefits of outsourcing to India • English is the recognized business language, with over 250 million English speakers in the country • Virtually Unlimited talent pool • India adds 3.5 million grads and post grads to the talent pool annually allowing for almost unlimited expansion capability. • India offers significant labor cost savings

  9. Thank You