India should look at the possible recession in the US as an opportunity as domestic IT Companies are more cost effective, Infosys Chief Mentor N R Narayana Murthy said on Monday.

"The fact that there may be a slowdown in the US means people will become much more concerned over better value for money...we could look at it as an opportunity," Murthy told reporters on the sidelines of a function in Mumbai.

The Indian IT industry fears that a possible slowdown in the US Economy could lead their Companies to cut IT spending.

As Indian IT Companies are earning major revenue from the US, recession is being looked at as having a negative effect on the topline.

Murthy said that instead of an adverse effect, it was more likely that India benefits if the US Economy, the world's biggest, witnesses a slowdown.

"The focus on better allocation of money means a greater opportunity for India," he said adding Indian IT Companies were reasonably well placed to withstand the shocks if any.

Earlier, Murthy inaugurated public sector Bank of Baroda's financial supermarket, N M Chowkshi Business Centre, and its 1,575th core banking branch in Aizwal, Mizoram.

Bank of Baroda Chairman and Managing Director A K Khandelwal said the lender has 88 per cent of its business on the core banking platform.

Courtesy : THEFINANCIALEXPRESS.COM

Indian IT services market is pegged to grow to $10.73 billion by 2011 with anticipation of more contracts from firms, which are grappling with high attrition of IT staff, IT research company Gartner Inc said.

Key factors driving this growth are agility, growth, cost takeout and innovation, it said.

But a prime reason for Companies to consider external service providers (ESPs) is the continuous turnover rates of key IT staff in range of 15-20 per cent, said a Gartner study.

Growth of IT services market is primarily being driven by growth of the Economy, small and midsize businesses, government projects and increased customer focus. Many IT service providers, MNCs and domestic have now recognised this potential and developed strategies exclusively for the domestic market, said Arup Roy, senior research analyst at Gartner.

The market segments that are expected to witness strongest growth are consulting, IT management and business process management (BPM) services with five year CAGRs of 28.1, 23.8 and 27.1 per cent respectively.

Consulting revenue, although coming from a small base, grew 30.1 per cent to USD 340 million in 2006 as compared to 2005. IT management revenue grew 27.3 per cent from 2005 to USD 549 million in 2006.

Increased adoption of remote infrastructure management services has driven the development of network operator centres/security operation centres, remote management centers and other managed service offerings from ESPs.

BPM in India is a high growth area that is moving beyond traditional customer relationship management (CRM) services.

The primary challenges that are driving organisations to be engaged in BPO are cost, growth and business innovation.


Courtesy : THEFINANCIALEXPRESS.COM