IT, ITeS to grow 7% by 2008, BTO to contribute $680 bln

New Delhi, Dec 20 (UNI) The contribution of IT and ITeS to national GDP will rise to seven per cent by 2007-08 against 4.8 per cent in 2005-06 and the market potential for Business Transformation Outsourcing (BTO) is expected to be around 680 billion dollar towards the end of March 2009, according to a study.

Releasing the study on BTO, here today, Assocham Secretary, Information Technology Jainder Singh said IT and ITeS which grew at CAGR rate of 28 per cent in the last five years, creating employment for 12.87 lakhs of skilled people, will attain a growth rate of over 35 per cent in next few years.

The IT software exports which grew at 32 per cent during 2005-06 had a growth rate of 23.4 per cent in the last couple of years, said the IT Secretary adding that IT and ITeS will record over 40 per cent growth rate with KPO and BTO services making an aggressive dent into IT sector.

''The concept of BTO is new to India in particular. Its growth rate estimated in most pessimistic form is expected to be around five per cent. But as BTO gains popularity and vendors become more mature in providing these services, it is expected to grow upto 10 per cent per annum. The market potential for BTO is expected to be around 680 billion dollar by 2008-09,'' said Mr Singh.

He said, also the percentage of BTO services in the outsourcing spectrum is expected to increase from 19 per cent in 2004 to 31 per cent by 2009.

As per the chamber's study, the city of Bangalore and Gurgaon have respectively been given first and second ranking followed by Delhi and Chennai whose rank have respectively been placed at three and four. Mumbai has been given fifth ranking position for future BTO hub as against Kolkata and Pune that has been placed at sixth and seventh ranking.

For the potential BTO market, the industry gave mixed response in its feedback. According to some leading outsourcing companies like Genpact, the potential market of BTO services is as huge as 500 billion dollar (measured across supply chain, engineering, design services, human resource management and customer care, etc) and could become 680 billion dollar by March 2009, while Transworks estimates its market potential, within the country, to increase from 2.5 million dollar in 2004 to seven billion dollar by 2007 and Salient BPO estimates it to increase from 2.36 billion dollar in 2004 to 5.64 billion dollar in 2009.

The growth rate of this market is estimated to be around nine per cent compounded annually. 24x7 customers estimates it to be less then five per cent in its nascent stages but is expected to grow at 10-15 per cent in the next few years.

Assocham BPO Council Chairman Umang Das said business players such as GENPACT, 24x7 Customer, Mcrop Global, Trnaswork Information, Stracon Back Office Solutions, NeoIT, Sailent Business Solutions, Vertex, Avaya Global Connect will be among the leading players that will establish a lead in BTO transactions in India in next few years as most of them have already made a mark in it.

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