Open doors for Indian IT industry : Japan.


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Indian organizations looking to de-hazard themselves from reliance on the US ... Indian IT organizations have a chance to set up themselves as the top of the line ...
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Slide 1

Open doors for Indian IT industry : Japan PRESS CONFERENCE New Delhi, October 20, 2008 EMERGING MARKETS SERIES Mr. Ambarish Dasgupta, Partner and Head of Consulting practice, PricewaterhouseCoopers Mr. Som Mittal, President, NASSCOM

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Agenda Introduction and review India and Japan - requirement for vital organization Offshoring market in Japan Key discoveries of the report \'Open doors for Indian IT industry : Japan\' IT Landscape in Japan Who serves the business sector Indian nearness in Japan Challenges for Indian players in Japan offshoring background Fallouts of the conventional IT administration model Recommendations for partners Service to target What ought to Indian merchants do Manage customer\'s desires Initiatives should be taken by Japan NASSCOM\'s part Advantage India, Advantage Japan

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Overview India\'s offer of IT fares to Japan is under $2Bn a year Penetrating the second greatest IT administrations market on the planet keeps on being a noteworthy test for the Indian IT organizations. Indian organizations looking to de-hazard themselves from reliance on the US/European markets market have since quite a while ago attempted to build up themselves in this business sector. Indian players have discovered ostensible achievement. Just achievement being in the inserted frameworks space where they could work straightforwardly with the end clients India, with its expansive actually qualified labor base and IT administration conveyance ability, has a major part to play as the maturing Japanese economy settles on decisions to stay aggressive in worldwide markets. Japan perceives and regards India\'s ability in IT This study endeavors to draw out the key open doors for Indian IT organizations and the potential techniques for achievement in this business sector

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India and Japan: Need for key association The maturing Japanese economy in its extension stage is confronting intense labor lack and solid worldwide rivalry as far as expenses and in addition development The current money related emergency is driving Japanese organizations to search for fantastic, demonstrated and minimal effort sourcing destinations and also more up to date markets India is a characteristic partner, supplementing the requirements with its superb administration conveyance skill, expansive range of HR and a gigantic shopper market Governments of India and Japan know about this open door for a vital association. Both nations are encouraging expanding number of joint revelations, appointment visits and different business occasions between the two nations. India with its extensive shopper base is a major business sector for Japanese enterprises

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Size of the offshoring market Japanese IT administrations market at USD 108 Bn is the second biggest on the planet. India\'s offer in the business sector is between USD 1 to 1.5 Bn Offshoring is restricted to 8-10% of the aggregate business sector China is the greatest offshoring accomplice

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Key discoveries – IT Landscape in Japan IT use has concentrated on enhancing the business efficiencies in managerial and intra organization exchanges. Just little parcel of organizations have used IT for fortifying aggressiveness of the firm. Low general IT spending. Spend/deals proportion is around 1-1.5% for most ventures when contrasted with around 3.5-4% in the US BFSI and Manufacturing are the most noteworthy spenders

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Key discoveries – IT Landscape... Solid conventional inclination for custom manufactured applications Increasing interest for bundle items Reasons for inclination to custom assembled applications: The characteristic "closeness" of Japanese organizations focusing on keeping up the uniqueness of procedures Low representative versatility Relatively less instances of corporate takeovers and mergers with low requirement for incorporation More than 53% of Japanese IT administrations constitutes altered programming improvement Drivers for change : COBOL aptitudes deficiency, requirement for expanded adaptability and cost weights Top 3 ERP sellers : SAP, Oracle, Glovia Other ERP merchants : Gemplanet (Hitachi), COMPANY, Superstream, Flexprocess, SCAW, ProActive, SSA, IFS Highly divided ERP items market. Main 3 sellers possess just 40-half of the piece of the overall industry. Most Japanese organizations keep on operating legacy centralized server

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Key discoveries - Who serves the business sector in Japan? The Japanese IT Services Pyramid "Keiretsu" of IT administration suppliers Top level work as accomplices to customers. All real IT administrations contracts are marked by the top level. Top level then outsource bits of work to various little and medium size suppliers Secondary administration suppliers further break every module and outsource segments Modularisation proceeds till more than 4 or 5 levels Indian and Chinese merchants regularly wind up at the base of this chain of importance with zero ability to see of the primary client

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Key discoveries – Japanese offshoring background Only 8-10% IT administrations are offshored China is the biggest offshoring accomplice for the Japanese representing more than half of the aggregate offshoring. Single greatest variable for decision of China for offshoring is the social homogeneity. Nonetheless, the administrations offshored are low end IT administrations of coding, testing and BPO. Worries over offshoring to China: Limited abilities to oversee vast complex undertakings Lack of top of the line space and specialized skill Concerns over information security and IP assurance High whittling down India as offshoring destination is picking up ubiquity China is a favored accomplice today, simply because of the absence of options

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Key discoveries – Limitations of the customary IT administration model IT is seen as a cost focus and not a key empowering agent. Most Japanese organizations do not have the idea of the CIO office. IT speculation choices are regularly impacted by the prime contractual workers. Oligopolistic control on customers. Customers have no dependable option Incumbents have no impetus to offer a substitute model Usually, Primary accomplices the integrator and has equipment, middleware, item, answers for push. Sub merchant has zero ability to see to end client Poorly characterized IT anticipate administration. Uncertain contracts and inadequate "extent of work" archives. Vague details Frequent changes in extension and determinations Inadequate documentation of the IT applications and inside procedures Low open door for cost reserve funds through offshoring

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Key discoveries – Indian nearness in Japan Indian organizations have wandered in this business sector from as right on time as the mid nineties Several of them have set up Japanese work areas and have made huge speculations with nearby contracts. Unmistakable Indian organizations in Japan : TCS, Wipro, Infosys, Zensar, Satyam, Mastek, Patni, NIIT Tech, KPIT Cummins, HCL Technologies Most players have discovered accomplishment in inserted frameworks improvement where they have chance to manage the immediate clients instead of turning out to be a piece of the chain of importance. Other than this, most players additionally offer AMD in this business sector However, even the bigger players acquire under 3% of their incomes from Japan

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Key discoveries – Challenges that Indian players face in Japan Struggling to offer the right esteem recommendation and situating themselves Barriers to passage as far as dialect & social similarity. Low Japanese dialect aptitudes accessible in India. There are around 71,000 Chinese understudies selected in Japanese colleges as against just 480 from India Lack of center: Far excessively bustling serving US and UK Struggling to adapt to the stickler state of mind of Japanese customers, long incubation periods and vague task administration rehearses Keiretsu Japanese plan of action doesn\'t energizes section of new players 48% < 2%

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Recommendations - Services to Target administrations which have high market potential and in the meantime permit Indian players to expand on the current capacities Embedded frameworks Engineering and R&D Application advancement & Maintenance Package Implementation

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Recommendations - What ought to Indian merchants do? Maintain a strategic distance from advantage. Have a key long haul perspective of this business sector. Business sector is huge and would require tolerance to create Establish right esteem suggestion ; begin little and construct trust. Comprehend the business contrast in legally binding terms. Showcase association based relationship for common preferred standpoint instead of customer merchant model. Target transformational change ventures Localize, confine, limit ; put resources into comprehension connection Develop qualities in Japanese dialect and be more touchy to social issues

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Recommendations - Manage customer desires

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Recommendations – Initiatives should be taken by Japan For Japanese industry to harvest advantages of this open door and enhance its aggressiveness Japan has too intentionally grasp globalization; acknowledge that dialect and society can\'t keep on being obstructions; they should be broken Japanese government ought to proactively urge enterprises to look past the administration supplier pyramid and draw in with worldwide players. Acknowledge that worldwide players can offer considerable worth through space aptitude and administration conveyance development, Facilitate inflow of remote talented specialists and their acknowledgment in the Japanese social and additionally business setups. Businesses in Japan, to genuinely understand the advantages of IT have to re-assess their conventional demeanor to IT and perspective it as a vital empowering agent as opposed to a cost focus. Building up a CIO/CTO office to oversee IT is an initial step, which will likewise help associations experienced on the worldwide IT anticipate administration best practices

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Recommendations - NASSCOM\'s part as a facilitator Run projects to sharpen Indian IT industry on particular necessities of this business sector Open a Japan work area to encourage sharing of data and give access to Japanese organizations Work with Governments both sides to expand spread of Japanese dialect and society Develop solid bonds with METI; JISA; JUSA; JETRO to advance normal interests Evolve em

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