Information technology Industry

Information technology, and the hardware and software

associated with the IT industry, are an integral part of nearly
every major global industry.

The information technology industry has become of the

most robust industries in the world. IT, more than any other
industry or economic facet, has an increased productivity,
particularly in the developed world, and therefore is a key
driver of global economic growth. Economies of scale and
insatiable demand from both consumers and enterprises
characterize this rapidly growing sector.

The Information Technology Association of America (ITAA)

explains 'information technology' as encompassing all
possible aspects of information systems based on
computers.

Features of the IT Industry at a Glance

Economies of scale for the information technology industry
are high. The marginal cost of each unit of additional
software or hardware is insignificant compared to the value
addition that results from it.

The IT industry helps many other sectors in the growth

process of the economy including the services and
manufacturing sectors.

Unlike other common industries, the IT industry is

knowledge-based.

Efficient utilization of skilled labor forces in the IT sector can

help an economy achieve a rapid pace of economic growth.
 The role of the IT Industry

The IT industry can serve as a medium of e-governance, as

it assures easy accessibility to information. The use of
information technology in the service sector improves
operational efficiency and adds to transparency. It also
serves as a medium of skill formation.

Both software development and the hardware involved in

the IT industry include everything from computer systems,
to the design, implementation, study and development of IT
and management systems.

Owing to its easy accessibility and the wide range of IT

products available, the demand for IT services has increased
substantially over the years. The IT sector has emerged as a
major global source of both growth and employment.

What is the future of IT industry in India ?

According to leading reports, Indian software industry is set
to achieve a turnover of 10 billion dollars by the year 2005.
The projected demand for trained I.T. professionals is
estimated at over 400,000 per year. There is a clear
imbalance between the demand and supply of IT
professionals with the result that this sector offers one of
the highest remuneration packages. The Internet is a new
revolution that is sweeping the world. It promises to change
the way we work, live, shop, communicate and entertain
ourselves.

The Indian information technology (IT) industry has played a key role
in putting India on the global map. Thanks to the success of the IT
industry, India is now a power to reckon with. According to the
National Association of Software and Service Companies
(NASSCOM), the apex body for software services in India, the
revenue of the information technology sector has risen from 1.2 per
cent of the gross domestic product (GDP) in FY 1997-98 to an
estimated 5.8 per cent in FY 2008-09.

Further, the industry body expects the sector to grow between 4 per
cent and 7 per cent during 2009-10 and return to over 10 per cent
growth next year.

India's IT growth in the world is primarily dominated by IT software

and services such as Custom Application Development and
Maintenance (CADM), System Integration, IT Consulting, Application
Management, Software testing, and Web services.

As per NASSCOM's latest findings:

• Indian IT-BPO sector grew by 12 per cent in FY 2009 to reach
US$ 71.7 billion in aggregate revenue (including hardware). Of
this, the software and services segment accounted for US$
59.6 billion.
• IT-BPO exports (including hardware exports) grew by 16 per
cent from US$ 40.9 billion in FY 2007-08 to US$ 47.3 billion in
FY 2008-09.

Moreover, according to a study by Springboard Research, the Indian

IT services market is estimated to remain the fastest growing in the
Asia-Pacific region with a compound annual growth rate (CAGR) of
18.6 per cent.

At present, there are 60 million Internet users in the country.

According to the Manufacturer’s Association of IT (MAIT), the number
of active Internet entities rose to 8.6 million by March 2009 from 7.2
million units in March 2008.

MAIT has outlined 'Goal 511', an ambitious target that talks about 500
million Internet users, 100 million broadband connections and 100
million connected devices by 2012.

A study by MAIT estimated that the total PC sale in India is likely to

grow by 7 per cent in 2009-10, with total sales expected to cross 7.3
million units.
Moreover, software companies continued to constitute the fastest
growing firms in the Deloitte Technology Fast 50 India 2009 program.
In 2009, the composition of software companies amounted to as
much as 80 per cent. Despite the slowdown and challenges for
growth, the report stated that the average growth rate of the top ten
winners increased significantly to 1,003 per cent, compared with 845
per cent in the previous year.

Outsourcing

According to NASSCOM, software and services exports (including

exports of IT services, business process outsourcing (BPO),
engineering services and research and development (R&D) and
software products) reached US$ 47 billion in FY 2008-09, contributing
nearly 78 per cent to the total software and services revenue of US$
59.6 billion.

India continues to be the most preferred destination for companies

looking to offshore their IT and back-office functions. It also retains its
low-cost advantage and is among the most financially attractive
locations when viewed in combination with the business environment
it offers and the availability of skilled people, according to global
management consultancy, AT Kearney.

Global IT giant, IBM, plans to scale up its business process

outsourcing (BPO) operations in the country and looks to recruit
5,000 people to support the expansion.
Some big deals in the outsourcing space include:
• HCL Technologies has entered into a five-year deal with media
conglomerate News Corp for managing its data centers and IT
across British newspapers. The deal is pegged to be in the
range of US$ 200-US$ 250 million, according to industry
experts.
• HCL Technologies has also received a contract worth US$ 50
million from UK-based defence equipment maker Meggitt for
providing engineering services.

Walmart has selected three IT vendors in India — Infosys

Technologies, Cognizant Technology Solutions and UST Global —
for multi-year contracts worth over US$ 600 million.

Use of IT on Business Systems

T he use of information technology has

revolutionized the way in which businesses function
on a local, national and global scale. In addition, it
has impacted on work practice and communication
at all levels.
Employees can now be more flexible and mobile in
their roles. The emergence of networked systems
and mobile technologies has enabled more people to
work from home and also en route to and from work.
Adapting to technology has not only created more of
a financial burden to organizations that have to
invest in hardware, software and expertise, but also
forced some organizations to think about what they
do and how they do it, and this has resulted in
possible downsizing, delay ring, restructuring and re-
engineering employees.
ROLE OF INFORMATION TECHNOLOGY IN
BANKING INDUSTRY
INTRODUCTION I.T. in Banking:
1). Technology has opened up new markets, new products, new services and
efficient delivery channels for the banking industry. Online electronics
banking, mobile banking and internet banking are just a few examples.
2). Information Technology has also provided banking industry with the
wherewithal to deal with the challenges the new economy poses.
Information technology has been the cornerstone of recent financial sector
reforms aimed at increasing the speed and reliability of financial operations
and of initiatives to strengthen the banking sector.
3). The IT revolution has set the stage for unprecedented increase in
financial activity across the globe. The progress of technology and the
development of world wide networks have significantly reduced the cost of
global funds transfer.
4). It is information technology which enables banks in meeting such high
expectations of the customers who are more demanding and are also more
techno-savvy compared to their counterparts of the yester years. They
demand instant, anytime and anywhere banking facilities.
5). IT has been providing solutions to banks to take care of their accounting
and back office requirements.

This has, however, now given way to large scale usage in services aimed at
the customer of the banks. IT also facilitates the introduction of new delivery
channels - in the form of Automated Teller Machines, Net Banking, Mobile
Banking and the like. Further, IT deployment has assumed such high levels
that it is no longer possible for banks to manage their IT implementations on
a stand alone basis with IT revolution, banks are increasingly
interconnecting their computer systems not only across branches in a city
but also to other geographic locations with high-speed network
infrastructure, and setting up local area and wide area networks and
connecting them to the Internet. As a result, information systems and
networks are now exposed to a growing number.
Technology Products:
(1). Net Banking
(2). Credit Card Online
(3). One View
(4). Insta Alerts
(5). Mobile Banking
(6). Net Safe
(7). e-Monies Electronic Fund Transfer
(8). Online Payment of Excise & Service Tax
(9). Phone Banking
(10). Bill Payment
(11). Shopping
(12). Ticket Booking
(13). Railway Ticket Booking through SMS
(14). Prepaid Mobile Recharge
(15). Smart Money Order
(16). Card to Card Funds Transfer
(17). Funds Transfer (e-Cheques)
(18). Anywhere Banking
(19). Internet Banking
(20). Mobile Banking
(21). Bank@Home (i) Express Delivery (ii) Normal
Delivery
(22). Cash on Tap
 INDUSTRY & SERVICES

Industrial Sector
• Auto Industry
• Biotechnology
• Cement
• Drugs and Pharmaceuticals
• Fertilizers
• Food Processing
• Gems and Jewellery
• Heavy Industry
• Mines
• Oil and Gas
• Real Estate
• Steel

• Textiles
Service Sector
• Financial Sector
• Information Technology
• Knowledge Process Outsourcing
(KPOs)
• Media and Entertainment
• Retailing

• Tourism
Infrastructure Sector
• Civil Aviation
• Education
• Ports
• Power
• Roads and Highways
• Special Economic Zones
• Telecommunications

• Health
Useful Weblinks
• DIPP
• Ministry of Small Scale Industries
INDUSTRY
• Industrial Development Bank of India