Emerging business model in IT companies

Topics: Tata Consultancy Services, Business process outsourcing, Tata Group Pages: 10 (2496 words) Published: September 4, 2014
Contents
Current Scenario of the Indian IT Industry​3
Challenges and opportunities​3
Emerging Business Model in Indian IT Industry​3
Tata Consultancy Services Limited​5
Brief History​5
Financial Data​5
Business by Topography and Sectors​5
Growth Strategy​6
Chief clients list​6
Infosys Limited​7
Brief History​7
Financial Data​7
Business by topography and sectors​7
Growth Strategy​7
Infosys 1.0​8
Infosys 2.0​8
Infosys 3.0​8
Chief Clients​8
Wipro Limited​9
Brief History​9
Financial Data​9
Growth Strategy​9
References​10


Current Scenario of the Indian IT Industry
India is one of the fastest-growing IT and ITeS markets in the world. Because of the cost competitiveness in providing IT services, India is the world’s largest sourcing destination, accounting for approximately 52 per cent of the US$ 124–130 billion market. According to Indian Software Product Industry Roundtable (iSPIRT), India has the potential to build a US$ 100 billion software product industry by 2025. The software products market in India is expected to grow at 14 per cent in 2014. Indian IT and ITeS industry is divided into four major segments – • IT services, which contributed total market size of US$ 56.3 billion during FY13 • Business process management (BPM), contributing US$ 20.9 billion • Software products, contributing US$ 17.9 billion

• Engineering services & hardware, contributing US$ 13.3 billion during FY12 As per National Association of Software and Services Companies (NASSCOM), the Indian IT-BPM industry is expected to add revenues of US$ 13–14 billion to the existing revenues by FY15. Challenges and opportunities

Manpower linked pricing model: As per this model, the clients that desire the software and services from Indian IT industries follow a method of payment which is linked to the manpower. The net cost of the software or services is determined by the number of hours invested by the total manpower, responsible for providing the services. This model worked fine when the labor in India was relatively cheaper. But now with the annual growth of approximately 9-12% in the wages of Indian IT workers, the clients are looking for other options. Back Office Management : or the ITeS was majorly based in India. But with continuous increase in the wages of the labor, the focus is shifting towards Philippines, Vietnam, China and some Latin American countries. Linear Model: In the earlier years of IT revolution, the Indian IT companies exponentially increased their employee base, which resulted in the linear growth of the company. This model was relevant when the cost of labor was relatively cheaper. But since the past 4-5 years, the clients prefer fewer staff and bill them on a “pay as you go” model. Innovations and productivity-enhancing tools, frameworks, solution accelerators and managed services engagements have changed the outlook. This non-linear growth model can enable revenue growth without commensurate headcount growth. Emerging Business Model in Indian IT Industry

Change is the only constant and this has been proven again when we talk about the trends observed in the Indian IT industries. Each model has an expiry date and to sustain and keep growing in such a scenario, one needs to constantly innovate and adopt the latest and updated trends. In the same line, the Indian IT Industries need to urgently initiate transformations across different dimensions that the industry works upon – scale, talent, market, models and capabilities. Another trend, observed currently at the Cognizant Technology Solutions Pvt Ltd is about the SMAC (Social, Mobility, Analytics, Cloud) model. SMAC is an integrated stack, where every function enables another to maximize the effect of each other. This model helps in effectively solving the issues of an organization which is more connective, collaborative, real-time and productive. In the current and upcoming scenario, almost each organization will have to be more connective and ever...
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