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A growing domestic market and the rising rupee have triggered IT companies to increase their focus on the Indian market.This will be a huge opportunity for Indian BPOs and IT companies which already have some of America’s top banks as clients. The report also suggests that the IT spends in the Indian market are rising, offering strong opportunities for various service providers. The US sub prime mortgage crisis has not visibly impacted India yet. Indian IT firms are unlikely to be hit by the US sub-prime lending crisis as their exposure to clients in the mortgage sector is limited.

IT and BPO companies are now focusing their eyes on job referrals by their employees with a twin-aim to retain the existing workforce and expand it as well. Employees have emerged as the key asset for companies engaged in the information technology and related services. But, frequent job-hopping and a high attrition rate have become a key deterrent for this growth story, even as the entire talent pool is getting smaller compared to the high growth rates coming their way.

IT vendors, who till recently preferred to earn in dollars are now looking at opportunities in the domestic market. And what’s driving their interest is the unprecedented boom in telecoms, banking, financial services and insurance sectors. Suddenly, these areas have become attractive for Indian IT vendors.

Quoting industry estimates, Goel’s report says IT spending in India is set to grow the fastest in the world in 2008. “As the information & communications technology market in Asia-Pacific reaches $154 billion in 2008, India and China will contribute half of the total spend. Over the next three years, the Indian market will nearly triple in size, becoming a $71 bn market by 2012.”

Companies in the automotive, manufacturing, and high-tech industries are more aggressively outsourcing their back-office information technology outsourcing(IT) and business processes outsourcing in order to reduce costs and improve their performance. Around 67 percent of companies surveyed in these industries identified cost reductions as the key means of measuring outsourcing success. Measuring customer satisfaction levels ranked second, cited by 46 percent of respondents, with improved process performance levels coming in third at 31 percent.

“As outsourcing becomes more pervasive and encompasses more back-office support as well as critical functional areas, outsourcing service providers will more closely resemble a critical member of a manufacturer’s supply chain rather than a traditional third-party support organization,” Lepeak predicted. He added that buyers will see a broader array of service provider options, but the number of service providers able to deliver large multi-function deals across multiple geographies will still be limited.

After establishing their position as the leader in the global BPO arena, Indian ITeS (IT-enabled services) firms are now eying their own backyard to expand businesses.

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