The business of IT in India

The business of IT in India

by Simon Dartford, Priyanka Giri, Pat Kiranantawat, Jessica Smith, Tina Syme, Lingzi Xue

India is well known for its IT services industry around the world; the industry as a whole contributes 9.3% towards India's GDP and holds a 55% share of the world’s overall IT outsourcing market.

Traditionally, the IT industry in India can be grouped into two major areas: IT services and BPO (business process outsourcing).

More recently, there is an increasing number of entrepreneurs taking their IT projects into start-up companies and created a vibrant start-up scene in the IT industry in India.

On our third day of the MBA trip we first visited the new and rapidly expanding IIM Kochi campus situated in the Kochi info park – a special zone dedicated to development of IT companies.

Associate Professor Rajesh from IIM shared his insights on the structure, history and development of the IT industry in India, a fascinating talk that highlighted the large scale of operation and contribution to the Indian economy, as well as the historical circumstances and political will leading to the liberalisation of the economy and the floating of the exchange rate in 1991.

Then we visited an American IT company Cognizant, to gain an appreciation of the nature and scale of IT service developments in India, of followed by a brief visit to the start-up village to see what the innovative entrepreneurs are up to.

Given it was a public holiday and they were still hard at work, we were all impressed with their passion to achieve their dreams.

There are still huge growth opportunities in the IT industry in India, but perhaps it is time for India to look internally and reorient their strategy from keep growing IT outsourcing to address their internal IT market by focusing on a more product oriented approach.

Outsourcing IT services and BPO will eventually become unsustainable, as price in itself is not a sustainable advantage.

Indian IT industry can learn from the Chinese IT industry because the two share similar market size. Although China has been disadvantaged by the language barrier, it has never the less developed its own successful IT industry.

One lesson learned from the presentations and visits is that India's internal IT demand is still largely untapped by Indian IT companies, which presents a huge opportunity for the brave and innovative to leave their mark in the future.