Amidst the current economic downtrend and global financial crisis some of the major analysts forecast that the growth in United States IT and ITES spending will considerably reduce through 2009. The current global downtrend has forcibly held back some of the U.S. IT companies to cut down their research and related annual spending. These analysts opine that the U.S. IT down trend is hampering the IT spending growth at a very minimum expected rate of 1.5-2.0 percent. Some of the analysts predict that the purchases of software by the U.S. government and non government sector would grow in a minimal trend. The analysts are not even expecting a CAGR of 2.5 percent through 2010 for the hardware purchases. The major downtrend identified in IT and ITES segments is specific to IT consulting, which is expected to decline by 2-3 percent compared to that of 2008. These kind of negative signs are highly pressurizing the IT and ITES majors to re-think and revamp the hiring and cost cutting strategies.
Other related sectors such as financial services are not expected to grow as they are concentrating on cost cutting rather than increasing their annual expenditure. Media and entertainment is another sector that will highly reduce the IT spending, which will dip the huge revenues of IT and ITES companies. Retail and consumer durable segment has also begun facing the demand slow down due to increased inflation rates across the countries and decreased purchasing power among the people due to huge economic slow down. This will in turn reduce th IT or ITES spending of retail and consumer durables industry.
Showing posts with label IT ITeS India NASSCOMM. Show all posts
Showing posts with label IT ITeS India NASSCOMM. Show all posts
Tuesday, February 24, 2009
IT/ITES Downtrends
Global financial and IT down trends are the major reasons for recent recession and global panic. The IT downtrends gave a sudden quake to various market players across the industries. Emerging countries are grabbing the opportunity of hosting some of the best IT and ITES companies. This in turn is encouraging these counties’ governments to uphold their interests of educating people and increasing the English literacy rates. As the major IT and ITES projects are up coming in specifically identified locations, the corporate also have the wide opportunity to take nascent and fresh enthusiasts.
IT downtrend is also showing its adverse impact on internet majors. In recent past some of the internet companies faced financial crisis, that in turn provided a chance to its peer group to eye on grabbing either of its assets or rights in part and together. Some of the .com majors have diversified their business and entered into new verticals. The major opportunity for the IT companies is to turn their current client base into recurring client base for their new and expanded scope of services. In general, IT and ITES companies have more client base with highest confidence in their services and capabilities. Any non-IT organization, expanding their scope of services will have to spend huge amounts on their marketing and research strategies as it is a fresh trail for them. But the IT and ITES companies already existing in the market, will have their own trendy techniques deployed on retaining their current client base. This will make them easily pitch in to their existing client with an increased portfolio of services.
IT downtrend is also showing its adverse impact on internet majors. In recent past some of the internet companies faced financial crisis, that in turn provided a chance to its peer group to eye on grabbing either of its assets or rights in part and together. Some of the .com majors have diversified their business and entered into new verticals. The major opportunity for the IT companies is to turn their current client base into recurring client base for their new and expanded scope of services. In general, IT and ITES companies have more client base with highest confidence in their services and capabilities. Any non-IT organization, expanding their scope of services will have to spend huge amounts on their marketing and research strategies as it is a fresh trail for them. But the IT and ITES companies already existing in the market, will have their own trendy techniques deployed on retaining their current client base. This will make them easily pitch in to their existing client with an increased portfolio of services.
Downtrends of IT/ITES
Global financial meltdown has proved that IT or ITES sector is not giving enormous opportunity to functional or non-IT workforce. Some of the analysts opine that key movers and shakers of the IT industry are moving into non-IT industry. As per the slogan that the direction of the wind can not be changes but the sailors can turn their direction as per the wind, IT movers and shakers are entering into non-IT segment instead of trying to fight with the prevailing slow down. This shifting is due to the current scenario prevailing in the IT and ITES industries that are demotivating the senior management to step of out of the stagnant market segments. A major influencing factor for these changes is that non-IT segment has a major demand of highly talented and dynamic leadership. In order to face this upcoming demand, the industry is promising the attractive career paths to new leaders.
The increasing hiring of the non-IT companies began weakening the leadership teams of some of the global IT majors. IT or ITES companies are facing the adverse effect indirectly due to considerable brain drain to other industries. Non-IT industries are hiring generalists and specialists with different skill sets and trying to enter into IT related or enable services, which in turn is a major threat of existing IT players. Some of the global IT majors are approaching various techniques to retain their key leadership by promising attractive pay scales, incentives and adding huge value to their existing or current businesses and portfolios.
The increasing hiring of the non-IT companies began weakening the leadership teams of some of the global IT majors. IT or ITES companies are facing the adverse effect indirectly due to considerable brain drain to other industries. Non-IT industries are hiring generalists and specialists with different skill sets and trying to enter into IT related or enable services, which in turn is a major threat of existing IT players. Some of the global IT majors are approaching various techniques to retain their key leadership by promising attractive pay scales, incentives and adding huge value to their existing or current businesses and portfolios.
Downtrends of IT/ITES
Global leading business information research companies forecast that the world markets will take some more time to overcome the current downtrend. In the mean time, the majorly affected segment, the financial sector has shown its adverse affect on information technology services. The adverse effect of IT or ITES downtrend has in turn caused negative effect on all the sectors including manufacturing, automobile, and finance etc. As ITES and related BPO sectors are highly influenced by global financial crisis, IT majors have taken specific measures to mitigate the risks involved. The down trend in the current demand for IT and ITES majors has highly influenced them to move into other related verticals of business or technology outsourcing. This will in turn reduce the risk involved in losing the IT or ITES businesses due to the prevailing recession.
Some of the IT majors are also considering in shifting their operational and production facilities from expensive locations to cost effective and inexpensive geographies. This will be a major reason for some of the IT majors to diversify their business verticals into related business outsourcing activities. Diversification of the technology companies’ services has also increased the opportunities enormously for non-IT consultants and work class. However, some optimist analysts opine that IT or ITES industry is having a good time to save their cost and thrive for better business outsourcing projects. As majority of the IT companies are focusing on diversifying their current portfolio existing business outsourcing players are facing a major hindrance in getting their projects outsourced by new clients.
Some of the IT majors are also considering in shifting their operational and production facilities from expensive locations to cost effective and inexpensive geographies. This will be a major reason for some of the IT majors to diversify their business verticals into related business outsourcing activities. Diversification of the technology companies’ services has also increased the opportunities enormously for non-IT consultants and work class. However, some optimist analysts opine that IT or ITES industry is having a good time to save their cost and thrive for better business outsourcing projects. As majority of the IT companies are focusing on diversifying their current portfolio existing business outsourcing players are facing a major hindrance in getting their projects outsourced by new clients.
Wednesday, December 31, 2008
DOWNTRENDS OF IT/ITES SECTOR AND ITS IMPACT ON THE INDUSTRY OF INDIA
The net profit of the leading exporters in India was pruned tremendously in 2007-08 compared to the previous years. The net profit of TCS was 4.15%; Wipro was only 2.8% in this year. These flat rates of net income felt in the stock market and impact on the IT companies.
US bank and financial sector is bound to take the tolls in the industry of outsourcing. IT/ITes of India was expected early on to feel the impact because of the slowdown of the economy in US. The major projects as well as small projects in outsourcing are delayed and look for a better time to increase the US and global economy market. In this scenario, some of the companies are focused on Europe and East Asia. And some of them are concentrating on domestic firms that are reducing the revenue in outsourcing or IT applications.
Though the problem is very completed, but downtrends of IT/ITeS can be recovered by taking a good plan. NASSCOM estimate that it will need around 1 million jobs in the industry to fulfill the requirements but it will also create huge unqualified hands. So management should take the proper policy to take care of the clients.
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