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Nasscom, McKinsey set to rechart vision for IT industry

Bipin Chandran & Anjan Mitra

Three years after McKinsey and Nasscom charted the vision for the Indian software sector, Nasscom is in talks with the global consultancy major to revisit the vision.

According to industry sources, "Nasscom is in talks with McKinsey to revisit the 10-year vision that they prepared jointly in 1998. They are on the verge of signing a new agreement for revisiting the projection made by the Nasscom-McKinsey study in 1998.”

The source added that revisiting of the vision will be necessary as there are newer opportunities for the Indian software and IT enabled services companies.

The 10-year vision had predicted that the Indian software industry would reach a $87 billion turnover by 2008 with $50 billion coming from software exports.

This move by Nasscom assumes significance as there are concerns about the impact of the global technology slowdown on the Indian IT industry. Industry sources also said the new study would consider the changing market conditions and technological developments.

Sources also said that one of the major focus areas for the study this time would be to identify the global opportunities for the Indian IT-enabled services companies.

“We believe that the opportunity for the Indian IT-enabled services companies is very large and the earlier estimates are understated. We are expecting the revenues from the IT-enabled services to be much higher,” said a source.

The Nasscom-McKinsey study in 1998 had estimated that IT-enabled services would account for about 20 per cent of the total software revenues and generate about one million job opportunities.

Sources also added that if the global IT scenario is taken into consideration the opportunity for the Indian IT sector is much higher as outsourcing of software services is much more prevalent today than in 1998.

The new study is expected to consider factors such as the brand equity of the Indian software companies, changing global business and technology scenario and performance of the domestic software companies over the past three years.

The second study by Nasscom and McKinsey may also be conducted in phases.

According to sources, the study is slated to begin in November and would be completed in February.

“Besides, we are thinking of conducting this study on a continuous basis as we feel that it is imperative to take a look at all kinds of predictions in such a fast changing business scenario,” source said.

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