BANGALORE, INDIA: SME sector poses good opportunity for Indian companies in the area of IT services, business process outsourcing (BPO) and engineering services, says a report by NASSCOM.

“ There is a huge demand in the SME sector that has largely remained untapped, and verticals like Automobile, Manufacturing, and Logistics have emerged as quick-win opportunities for Indian companies,” said Sankar, executive director, PreicewaterhouseCoopers.

The National Association of Software and Services Companies, NASSCOM, announced the report ‘Opportunities for Indian IT – BPO industry in Germanic countries’, in association with consulting firm PricewaterhouseCoopers.

The report focuses on identifying partnership opportunities for both India and the Germanic countries in the area of IT services, business process outsourcing (BPO) and engineering services.

According to the report, There also lies huge opportunity in the large mid-market segment in the Germanic region. More than 95 per cent of the enterprises in the Germanic countries in the fields of chemical, machine building, automotive and electrical belong to the small and medium size enterprise segment.

This is where the Indian IT firms that have access to a pool of technically skilled work force should capitalize by seeking partnerships with similar-sized Germanic companies for front-end capabilities. Newer partnership models on joint product development can help built a viable SME segment in both markets.

“ Long term commitment and effective partnerships would emerge as the biggest deciding factor that will sway client contracts towards Indian IT companies in the region,” added Ramamurthy.

The report identifies Germanic companies amongst the early adopters of outsourcing (not offshoring) and many companies in the region have well defined IT outsourcing and vendor expertise.  India is amongst the preferred destination for off shoring.. Eastern Europe and the CIS states including Russia with the nearshore capabilities are the more attractive options for the Germanic clients.

Other key findings mention that the Indian companies earning less than USD 2.6 Bn from this region across the IT, BPO and engineering services space as against the addressable market size of more than USD 53bn.  Business from this region which is the largest market in Europe has the potential to grow to USD 10 Bn by 2020, provided Indian companies take the strategic and tactical steps required to succeed in this market.

Som Mittal, president NASSCOM said, “Germany, Austria and Switzerland have emerged at the economic forefront of Europe and present significant opportunities for the Indian IT sector as we continue to build inroads into newer and emerging markets. The Germanic countries are facing acute talent shortages in the knowledge based sectors like IT and Engineering services.”

He further said that India is a natural partner, complementing the needs with a large technically qualified talent based, global experience and lower cost credentials. Current European uncertainties are short term in nature and we are confident that the European bloc as a whole will continue to be one of the largest markets for the Indian IT – BPO Industry.