Page 53 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes fuel efficiency norms, convergence of local markets, and use of localised products. Increasing
confidence between customers and service providers successfully executing a variety of activities
across low-medium-high complexity projects has led to increasingly larger sizes of projects
being sourced from India.
In the domestic sector, the major component is IT services with 64.2 per cent share, followed by
software products/engineering with 19.6 per cent share and BPO with 16.2 per cent share. The
CAGRs of these sectors were 11.5 per cent, 13.6 per cent and 18.1 per cent respectively. Strong
economic growth, rapid advancement in technology infrastructure, increasingly competitive
Indian organisations, enhanced focus by the government and emergence of business models
that help provide IT to new customer segments are the key drivers for increased technology
adoption in India. The IT and ITeS sector is also a generator of skilled employment with direct
employment expected to reach 2.8 million in 2011-12 compared to 2.5 million in 2010-11. Some
of the challenges faced by the IT and ITeS sector include increasing competition from other
countries with incentivised low costs, rising costs in India with wage-push inflation, increasing
costs of relevant talent and skilled personnel, infrastructure constraints with over 90 per cent of
total revenue generated from seven Tier-1 locations, risks like currency fluctuations and security,
both physical and data related, and rising protectionist sentiments in key markets. Government
has taken various initiatives to promote the growth of the IT-ITeS industry and has been a key
catalyst for increased IT adoption—through sectors reforms that encourage IT acceptance, National
e-Governance Plan (NeGP), and the Unique Identification Development Authority of India
(UIDAI) programme that creates large-scale IT infrastructure and promotes corporate
participation. The Draft National Policy on Information Technology 2011 focuses on deployment
of Information Communication Technology (ICT) in all sectors of the economy and providing
IT solutions to the world. The Policy emphasizes adoption of technology-enabled approaches to
overcome developmental challenges in education, health, skill development, financial inclusion,
employment generation, and governance so as to enhance efficiency across the board in the
economy. It seeks to bring ICT within the reach of the whole of India while at the same time
harnessing the immense human resource potential in the country to enable it to emerge as the
global hub and destination for IT-ITeS Services by 2020.

Table 2.8: Overall Growth Performance of the IT-ITeS Sector

Source: NASSCOM.
Notes: P = Provisional; E = Estimated.
The NeGP was approved by the Government of India in May 2006 to make all government
services accessible to the common man in his locality, through common service delivery outlets
at affordable costs. The NeGP comprises Mission Mode Projects (MMPs) and core e-infrastructure.
Significant progress has been made in laying down core e-infrastructure and in most of the
MMPs. More than 97,000 Common Service Centers (CSCs) have been established across the
country as web enabled service access points for making public services available to citizens on
anytime, anywhere basis. Initiatives under the NeGP also include online services related to
income tax, Ministry of Corporate Affairs (MCA) 21, passports, and central excise. The government
has also initiated new e-Governance projects for education, health, public distribution system
and postal services.

48 LOVELY PROFESSIONAL UNIVERSITY