Thriving During the Recession

In spite of the

ongoing recession, the outsourcing industry records similar spending in

technology infrastructure like last year. According to the V&D-IDC Enterprise

Communications Priorities Survey 2009, ITeS segment is again the highest spender

on ICT as percentage of the turnover of organizations. ITeS vertical spends

1.03% of its turnover on ICT infrastructure. With 0.85% of the turnover being

spent on IT infrastructure the sector is the highest spender in this category as

well. The average telecom spend is also highest at 0.18%. This has gone up

slightly with 0.17% being the average telecom spend in the previous year's

survey.

Enterprise Priority Survey is an annual survey conducted

by VOICE&DATA to guage the requirements and satisfaction level of the enterprise

segment. This year, the survey got inputs from 200 firms, out of which 28% or

fifty-five firms were ITeS companies. Of these ITeS firms, 70% of had a turnover

between Rs 200-999 crore, 25% were less than Rs 200 crore, and 5% had a turnover

of more than Rs 1,000 crore. Manufacturing, pharma, retail, BFSI, IT and retail

were the other verticals considered for the survey. Nearly 56% of the ITeS firms

had less than 1,000 employees, and 19% had between 1,000 and 1,999 employees. In

the same vein, 10% had between 2,000 and 4,999 employees, and 15% of the

respondents had more than 5,000 employees.

Interestingly, almost 50% of the ITeS companies

interviewed for the survey, have invested in conferencing solutions. As far as

access technology is concerned, ISDN is the main technology used by this

vertical. This is followed by PSTN and international leased line. Among the ITeS

companies, 38% use domestic leased line as access technology. Metro Ethernet has

the least takers in this segment with only 5% of the ITeS firms opting for it.

VoIP, on the other hand has recorded a decrease from 52% last year to 35% this

year.

The ITeS vertical continues with the strategy of having

the head office take the decision where technology deployment and purchase are

concerned. This is in contrast with the general trend, which is moving towards

decentralization of the decision making process where spending on IT

infrastructure is concerned. About 70% of the firms in this vertical have

centralized decision making at the head office and the rest take decisions at

their regional offices. Around 63% of the respondents in this segment said that

CTO/CIO or IT head is the primary decision maker in the ICT purchase, and 33% of

the respondents claim that MD or CEO is the primary decision maker, and 4% say

that the decision is taken by the committee or vice president. Nearly 83% of the

ITeS respondents say that the IT division staff is the biggest influencer as far

as ICT purchase is concerned.

While business process outsourcing firms are the biggest

spenders in communications infrastructure, this is not the case where formation

of different groups for managing the communications infrastructure is concerned.

Only 15% of the respondents say that they have a separate group where management

of enterprise voice communications is concerned. Nearly 74% of the firms have

the same group which manages the IT and Internet services, and the rest 11% have

both the groups but some overlap exists.

As of now, 30% of the respondents outsource domestic

leased line management and 24% outsource mobility applications management. 17%

of the respondents outsource VPN management and 15% outsource VoIP. Nearly 11%

outsource international connectivity services management. Clearly, the industry

doesn't believe in outsourcing its communications infrastructure. Where the

future intentions are concerned, only 2% of the respondents are looking at

outsourcing their VSAT infrastructure.

Future Plans



Where the future spend is considered, the business process outsourcing

segment will be spending the most in domestic leased line - local. This is

followed by domestic leased line-national long distance, cable model, VPN-MPLS

and PSTN dial-up. Interestingly, in the year gone by, the vertical was also

planning to spend on VoIP as one its focus areas.

The biggest challenge for the segment is the management of

the network. The second biggest challenge faced by the outsourcing vertical is

the lack of convenience and ease of use where technology is concerned. This is

followed by scalability of the technology. The segment is clearly grappling with

shortage of trained manpower. The respondents also feel that some technologies

are too new to be relied upon. Last year, scalability was the biggest challenge

faced by the ITeS segment. The vendors catering to this segment would do well to

take these challenges into consideration while coming out with offerings for the

outsourcing firms.

The outsourcing industry is evolving towards the next

level and going forward, the segment is likely to see the adoption of newer

technologies. The vendors and service providers should keep in mind the

particular requirements of this vertical which would go a long way in meeting

the unique needs of the ITeS segment.

Gagandeep Kaur



gagandeepk@cybermedia.co.in