'SCAM' to make 2013 a promising year for IT-BPO sector

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Flat IT budgets and uncertain macro environment may continue to challenge the Indian IT-BPO industry, but as technology becomes more central to everyday lives of consumers and corporate alike, 2013 promises to be a good year for the USD 100 billion sector.

Post the 2008 global financial crisis, the Indian IT industry, which saw phenomenal growth in the preceding five years on back of a over 25 per cent growth in exports that made companies like Infosys , TCS , and Wipro poster boys for investors, seems to have lost its sheen.

Factors like weakening rupee, high production input prices, hike in borrowing costs, and geo-political situation continued to plague the industry in 2012.

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These along with domestic policy paralysis prompted software services industry body Nasscom to lower growth forecast for 2012-13 for IT-BPO exports to 11-14 per cent from previous fiscal's target of 16-18 per cent growth.

IT companies seem to be ready for this new "normal" and are now embracing technologies like social media, cloud, analytics and mobility (SCAM) to optimise and ensure efficiency in business environment, all within flat or lower than usual IT budgets.

While the global macroeconomic scenario remains uncertain in the coming years, the industry will continue to exhibit resilience and adaptability in continually reinventing itself to retain its appeal to clients, Nasscom said.

"The year 2012 has been a landmark year for the Indian IT industry... At such a large base, we expect the industry to clock double digit growth in FY 2013 which exhibits that despite global uncertainties, IT-BPM industry has moved from efficiency to effectiveness," it added in an emailed response.

Year 2012 was a mixed one for the top five IT services firms. While Tata Consultancy Services (TCS), HCL Technologies and Cognizant saw good growth, Infosys and Wipro lagged peers.

TCS and HCL Technologies have registered quarterly revenue growth 13 per cent and 17 per cent in dollar terms, while both Infosys and Wipro registered under 5 per cent growth.

Also, Infosys slashed its revenue growth outlook to five per cent for FY2012-13 and suspended its practice of giving quarterly guidance, while Wipro hived off its non-IT businesses like Consumer Care & Lighting into a new company to focus exclusively on IT.

Cognizant continued to give strong competition to its counterparts, pushing Infosys to the third spot in the top Indian IT services players tally with growth of over 20 per cent.

Though it is not listed in India, Cognizant is often referred to as an Indian entity with three-fourth of its over 1.50 lakh employees being based.



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