SMAC to help India’s IT-BPO industry cross $225 billion by 2020

CHENNAI, INDIA: The disruptive technologies of Social media, Mobility, Analytics and Cloud computing (SMAC technologies) have opened new gates for the Indian IT-BPO vendors.

Since enterprises globally are adopting SMAC technologies for operational efficiency, cost optimization and for other business advantages, the Indian IT-BPO vendors can develop their SMAC strategies and cross the $225 billion mark by 2020, according to CII Report - ‘The SMAC Code - Embracing New Technologies for Future Business'.

The CII Report was released by P Thangamani, Hon'ble Minister for Industries, Government of Tamil Nadu, at the 12th edition of Connect, a two-day premier ICT event, organized by the Confederation of Indian Industry (CII) in partnership with Government of Tamil Nadu with the theme: "Towards Scaling New Frontiers in ICT".

The report says that SMAC enables enterprises leverage the cloud for storing huge volumes of multi-structured customer data, generated over mobile devices and social media and analyze these data sets for business advantage.

SMAC is considered to be a multi-billion dollar opportunity, globally for the IT-BPO vendors. The enterprises are increasingly adopting these technologies, as they become more agile with information sharing within organization and seek more insights about their customers to serve them better. SMAC has the potential to be a multibillion dollar opportunity in the forthcoming years.

Industry estimates suggest that the world ICT spending will reach the US$5 trillion mark by 2020 driven by the combination of social media, mobility, analytics, and cloud. In 2012, SMAC approximately contributed about 20 percent of the total ICT spending and they are collectively, growing at about 18 percent year-on-year, that is, around six times the rate of the rest of the IT industry. At this rate it is expected that these technologies will become 80 percent of the total spending by 2020.

The Report observed that social media would help IT-BPO firms capitalize on the growth generated by the increasing usage of social media by consumers and businesses; Mobility, would offer two pronged growth path of enterprise mobility and consumer mobility; Analytics would drive businesses through the way of big data, business intelligence and analysis of multi-structure high volume datasets, while Cloud computing is expected to provide the solutions for IT-BPO companies that would help them offer more cost optimzed solutions to their clients.

Talking about the business impact of SMAC and other disruptive technologies including artificial intelligence, robotics, and augmented reality, the Report pointed out that the organization structure has changed from highly centralized to highly decentralized. The decision making process is driven by management in collaboration with customers, who are highly informed. The role of technology is not a support function but it has become a business enabler.

Today, there are over 4.5 billion mobile subscribers and over 2.5 billion Internet users, and the world has already entered the post-digital era. There are over 1 billion social media subscribers globally, who are already disrupting traditional models of marketing and selling. The mobile Internet users in the country are expected to grow from 4.1 million users in 2009 to 164.8 million in 2015 at a CAGR of 85 percent.

With mobility, the industry is shifting from the PC/laptop to mobile devices. There are nearly 900 million mobile phone subscribers in India, where the spread of affordable 3G and 4G networks are driving the growth of mobile apps. Every year, companies and individuals generate billions of gigabytes of data.

The CII Report said that the rise of information coming from new sources both inside and outside the walls of the enterprise creates integration, management, governance, and architectural pressures on IT. The report urged the technology vendors will need to change the way they are structured to deal with SMAC.

"They need to be nimble, and think on their feet. Rather than being bureaucratic organizations, technology vendors will need to create an entrepreneurial culture, along with next-generation delivery and pricing models that will work in realizing the maximum potential from SMAC. They will also need to look at an inorganic strategy to add to their capabilities in some of these areas. This will also have the added advantage of bringing in talent that will act as a force of disruption in these organizations," it observed.

The past two decades have seen the Indian IT-BPO industry grow from strength to strength. The industry expanded from a mere $8 billion in 2000 to an estimated $108 billion in 2013, contributing significantly to India's economic progress over the last decade. The industry took advantage of the vast pool of highly skilled resources available at low cost, and rode on the wave of application development and BPM services to spread its wings.

However, "going forward, the vendors should seek to work closely with their customers to stay abreast of the latest technological developments, and come up with solutions that can take advantage of SMAC". The Report added that IT-BPO industry should seek to use customer input more diligently while innovating / developing solutions and products. The emphasis should be on tapping inputs from various channels, mediums and devices and using these as critical inputs for offering new solutions and incremental innovations to their customers.

The CII Report was prepared in association with KPMG.