Disruptive technologies to increase the exports in 2013- 2014: Nasscom

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The Indian IT industry is on an upswing according to the industry body NASSCOM. Global technology spending budgets are increasing allowing the Indian IT industry to grow off the trajectory. The National Association of Software and Services Companies as a whole has adopted disruptive technologies which is expected to increase the exports in the year 2013- 2014.

NASSCOM sticking by its guidance

The IT sector has been doing well in the first quarter of 2013. Despite the laudable performance, NASSCOM refuses to review its guidance of 12-14% set for the year 2014.

NASSCOM believes that a review at this time is unnecessary as there is a particular lead-lag performance. With the customer visits and an increase in the requests for proposals, the industry is undoubtedly doing well. But since the global economies are on a slower path to complete recovery, a review will result in an over projection according to Som Mittal, the President of NASSCOM.

The IT industry getting traction within the projected growth

Som Mittal was of the opinion that the projected growth range is small and whether companies hit the upper or lower end is irrelevant to the industry as a whole. The more important issue, he said, “The key point however is the traction that industry is getting. Whether it was expanding geographies or going deeper into customers or getting into newer verticals – all of them have started kicking in. Many of these changes had started happening when the downturn happened in 2008-09 and since then the industry has made many, many strategic changes which is going to auger well for us in the coming years.”

The source of the projected growth

NASSCOM believes that the industry as a whole, including the mid-sized companies, is doing well. The large corporations have also fared well in the recent quarters. Given this overall well-being, the projected growth for the industry is driven by a secular force rather than a few key large corporations.

The IT, engineering services and the BPO sector have all reported tidings of growth. This profitable sector is owed to various key decisions and strategies undertaken by all the companies. The mid-sized companies have chosen to focus on individual consumers, exploring deeper into the existing base.

The larger corporations have begun offering newer and wider service bases attracting a wider base of consumers. They have expanded geographically and into newer verticals. While the industry is changing, NASSCOM is also transforming their service operations.

Som Mittal was quoted as saying, “We also have changes that are taking place, so transformation is a big thing for our clients. That is happening and most of them are integrating social media, mobility, analytics and cloud into this which is also newer offerings that are leading to increases we see. I do not think these increases are going to be one-time. I think investments are happening in IT to get productivity, expand markets, so I think overall almost everything that looks positive for us.”

Projection for the Fiscal year 2015

Given that the projection for the fiscal year 2014 seems to be on a positive scale, the projection for the year 2015 is naturally under a lot of scrutiny. Mittal believes that the industry will do well in the fiscal year 2015 as well as the investments currently being undertaken are long term investments that will pay off in the future.

The industry exports were in the vicinity of $ 50 billion at the end of 2008. The same figure rose to the vicinity of $85-86 billion in the current quarter. The five year time frame under consideration was not very beneficial for the industry as a whole. Despite the negative global influences, the exports were steady. Given the history, therefore, the projection for the fiscal year 2015 will definitely be exceeded according to the President Som Mittal.

The Profitable BPM-IT sector

The Information – Technology and the Business Process Management industry employed over 180,000 people in the year 2012-2013 alone. With a total employee base of over 3 million technical experts, the industry is one of the largest in India.

N. Chandrasekaran, the Chairman of NASSCOM said, “The Indian IT-BPM industry has demonstrated resilience and agility in the past year. Technology has today become an integral enabler for growth across all sectors and the industry is continuously evolving and innovating to emerge as a strategic partner to its customers. The thrust is IP-led solutions served over multiple platforms that has the customer at the center of every module, and is transformative in nature.”

NASSCOM believes that the industry is profitable and will continue in the same arena. Some areas that will be key drivers of potential profits will be the ‘anything-as-a-service’, smart computing, the SMB market and the technology enablement in emerging verticals.



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