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Tie kanpur Som Mittal Oct8,2014

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Tie kanpur Som Mittal Oct8,2014

  1. 1. Unlimited Opportunities of your Making SOM MITTAL FORMER PRESIDENT & CHAIRMAN, NASSCOM OCTOBER 2014 Som Mittal
  2. 2. 2 What we will discuss today • Where are we today, what does the present hold for us • What are the disruptions that are happening • What opportunities are these disruptions creating • How do we make most of these Som Mittal
  3. 3. 3 India – the country 7th largest country 780 dialects spoken, 86 scripts used 2nd largest population >50% below 25 years >65% below 35 years 2nd largest pool of scientists and engineers Largest democracy 815 million voters Internet users  2nd largest  215+ million Teledensity  75+%  920+ million subscribers Source: IAMAI, New reports Mix of contemporary and traditional Poverty rate 1994 45% 2012 22% Som Mittal
  4. 4. 4 Indian market presents a huge global opportunity Source: IBEF, McKinsey Healthcare spending to be USD 160 billion by 2017 Consumer market to be over USD1.5 trillion by 2025 Growing rural market – potential to add USD 1.8 trillion to economy Attractive FDI destination 25% of world’s skilled workforce by 2025 Infrastructure investment – USD 1 trillion over next 5 years Growing middle-class – ~600 million by 2025 Broadband growth – expected to have 1.38% multiplier effect on GDP Retail industry – expected to be USD 750-850 billion by 2015 A fast growing e-commerce industry – USD 100 billion by 2015 World's second-fastest growing auto market Banking sector to become fifth largest in the world by 2020 Som Mittal
  5. 5. 5 Technology can also play a key role in India’s transformation GROWTH  500 million skills needed over the next decade  400 million people need stable electricity INCLUSIVENESS  650 million people need proper nourishment  120 million rural households need bank accounts GOVERNANCE  #134 out of 189 countries on ease of doing business  #94 out of 176 countries on corruption perception index KEY FOCUS AREAS FOR NEW GOVT Technology can help in bringing about a positive change in the lives of millions Som Mittal
  6. 6. 6 IT-BPM industry: Highest impact sector 8.1% Relative industry share in national GDP 45% Offsets nearly half of India’s oil import bill 38% Spearheading the Indian MNC story Largest share in total services exports Highest attractor of PE/VC investments 3.1 mn Largest private sector employer Largest private sector women employer Promoting balanced regional growth 60- 70% >1 mn >60 Total cross border M&As; 28% share in total $2.4 bn Total investment; IT-BPM share: 47% 99 Operational IT SEZs; 44% in Tier II/III Highest net value add sector Source: NASSCOM Som Mittal
  7. 7. 7 Services industry providing value addition across five distinct levels Som Mittal
  8. 8. 8 India leadership drivers BENEFITS IMPACT ON CUSTOMERS Cost Competitive Human Capital Customer First Scalability, Security Strong Ecosystem 3X cheaper than US >5 million graduates >3 million workforce 100% coverage of outsourcing engagements ~75 countries ~600 ODCs 43 Tier II/III cities • Optimum cost • Operational flexibilities, efficiencies • Largest employable pool • Diverse background • Customer centric business outcomes • End-to-end services • Niche, domain capabilities • Global delivery network • Best-in-class governance frameworks • Competitive infrastructure • Emerging potential locations Maturity USD 118 billion industry • Scale: 16,000 firms • Depth of services: across IT-BPM • Vertical-wide presence 1 2 3 4 5 6 Source: NASSCOM Som Mittal
  9. 9. Diverse industry structure: Future growth driven by innovation 9 Large 11 players Mid-sized 120-150 players Emerging players ~1,000-1,200 Small sized ~15,000 players % contribution to total IT-BPM revenues >40 per cent ~35-40 per cent ~9-10 per cent ~9-10 per cent • 1% (~150) companies contribute 80% of industry revenues • This segment needs facilitatory environment, policy predictability & stability, ease of doing business; • 99% (~16,000) companies contribute less than 20% of revenues • Future growth driven by innovation, IP & valuations rather than revenues • Need support, markets, incentives and simple regulation • Can contribute 50% of growth by 2020 Incentivize expansion to Tier 2/3 towns & integrate with new cities program Som Mittal Source: NASSCOM
  10. 10. India will continue to play a dominant role in the KPO market 10 Som Mittal Key trends in KPO services • Expansion in breadth and depth of services • Services are likely to be offered in near-shores along with language capabilities • Emerging verticals and non-traditional markets will be the growth engine Scope of services • Many knowledge services deal with regulatory standards across nations • Data compliance with respect to regulatory standards (especially those defined by the United States, Canada and the European Union) will be required Awareness of regulations • Domain expertise in sales and marketing team to sell appropriate services to client • Collaboration with client will be required to access business related data for performing value-added analysis on it Investment in sales and marketing capabilities Exports KPO - Split by verticals (2020E) 100% = $11.3bn1 • China for key phases of clinical trial process • Philippines for number of key areas, including healthcare outsourcing • Sri Lanka for specific service lines such as equity and credit research Emerging geographies 32% 14% 13% 9% 4% 6% 2% 20% Hi-tech/ Telecom BFSI Healthcare T&T Retail Manufacturing Construction & Utilities Others Source: NASSCOM
  11. 11. 11 Four major trends are driving investment in ER&D Som Mittal Increasing use of electronics Fuel efficiency/ Alternate Fuels  Electronics / Communication technologies increasing across verticals (e.g., Automotive, Construction, Energy)  Enables real time monitoring, greater operational efficiencies and higher comfort  Higher fuel efficiency and sustainability becoming a priority 1 2 3 Products for local markets  Required customized products for the emerging markets  Leverage local talent (India and China) to develop products for the emerging markets Convergence of Technologies 4  Devices and products with multiple functionalities (e.g., Consumer Electronics, Mobile handsets, Medical Devices) Source: NASSCOM
  12. 12. 12 India also emerging as hub for products and innovation Tectonic Technology Shifts Underway • Software / Hardware / Services silos merge into “Solutions” • Majority of new software delivered "as a service” • Hardware of all kinds embed software intelligence • India is uniquely positioned to deliver innovative combinations of world class product, services and hardware India's Young will Invent the Future • Innovation landscape worldwide is more youthful, agile, capital efficient and multi-disciplinary than ever before Goal: Transform India into an “Innovation Nation”! Som Mittal
  13. 13. 13 Govt Support Increasing for Startups plus the Digital India initiative • Rs 10,000 crore debt and equity fund • Widespread incubator and accelerator network • Simplified laws for setting up and closure • Focus on rural entrepreneurship Som Mittal Impact 2020 50,000 tech start-ups can add 2% to India’s GDP and 3 million jobs
  14. 14. 14 Vision of Digital India Announced by Modi Govt Centered on 3 Key Areas 1. Digital Infrastructure as a Utility to Every Citizen 2. Governance & Services on Demand 3. Digital Empowerment of Citizens Som Mittal
  15. 15. 15 Nine Pillars of Digital India Som Mittal 1. Broadband Highways 2. Universal Access to Phones 3. Public Internet Access Programme 4. E-Governance – Reforming government through Technology 5. eKranti – Electronic delivery of services 6. Information for All Electronics Manufacturing 7. Electronics Manufacturing – Target NET ZERO Imports 8. IT for Jobs 9. Early Harvest Programmes
  16. 16. 16 Composition of Monitoring Committee on Digital India Som Mittal Special Invitees • Principal Secretary to PM • Cabinet Secretary • Secretaries of Expenditure, Planning, DoT and Posts • Secretary, DeitY – Convener Prime Minister – Chairman Finance Minister Minister of Communications & IT Minister of Rural Development Minister of HRD Minister of Health
  17. 17. 17 What Is Driving the Opportunity New disruptive technology evolving fast Most of these are consumer oriented Consumer and people behaviors are getting impacted This is creating completely new green field opportunities Som Mittal
  18. 18. 18 What do these things have in common? Technology is constantly shaping our lives...
  19. 19. Revenge of the Nerds..CHANGING established behaviors! Apple iTunes  Retailing of digital Wearable Devices  Wearable devices for pathological usage Napster’s growth and industry response  1992 Global adoption music – Legal alternative to p2p sharing  Arrival of Napster –  Artists can produce 15 users in 1999, 32mn in 2000, 80 mn in 2001 19 PGGroiPnoStg eBldea NMseaadvp iTgsoamtioTonm Ap&p Garmin Sleep HealthCenters  Overnight stay to diagnose sleep ailments  Launched in 1997, revenue of $10mn in 2004 & $30mn in 2010  Abruptly shut down in 2012 Book Stores Music Industry on MP3 std their own music  Revenue in 2012 – $4bn  East is east, west is west!  Dominant role of film music & recording companies  Limited power to artists  Bezos waited for exponential imprv in storage, battery life & display tech(E Ink)  2011 – eBook sale exceeded that of printed books  Winning combination of Mobile & Payment tech to disrupt FS supply chain? Amazon Kindle What next? Innovators aren’t targeting your business. You’re just collateral damage. Som Mittal
  20. 20. 20 Increasingly rapid adoption of innovative technologies Big Bang market adoption with disruptions It is no longer a 'bell curve' but a 'shark fin'... Time to reach 1bn users has been halving with each new technology!  Telephone – 110 yrs  TV – 50 yrs  Mobile – 20 yrs  Internet – 15 yrs  Smartphones – 8 yrs  Messaging apps – 2 yrs Next 1bn in less than 5 years? Increased Re rsautelt ionfg a idno sphtoiornte dr upero tdou mctu litvipelse factors Som Mittal
  21. 21. 21 Big Data and Analytics break entry Virtual shopping in subways-Korea US health insurer New platforms make interactions social Mobile Virtual N/w Operator, UK Telefonica • Social forums - customers are rewarded for answering other customer queries • P2P lending, free SIM and other offers barriers • Better health care at lower costs using interactive devices • Monitor members, through remote detection/ advisory Physical footprint much less relevant today • Add to cart by scanning code with smart-phone • Home delivery after work Clinical visits reduced by 50% 130% increase in online sales 90 secs avg waiting time for complaints Disruptions are triggering a PARADIGM SHIFT Disrupts physical retail! Disrupts medical consulting & pathology labs! Disrupts Call Centres & BPO! Intelligent personalized public transport (Finland) • Personalised public transport - Travel almost door to door using shared transport • Tailored trips without transfers & parking concerns Kutsu plus offering new kind of bus service Disrupts public transportation, private car ownership? Som Mittal
  22. 22. 22 ...some could impact MULTIPLE INDUSTRIES Disrupts energy, home automation? Google driverless cars • Self-driven car will reduce automobile accidents, nullifying speeding, drunk/ distracted driving - 6.5 bn hours of on-road driving time to be available • Use as automatic taxis, cars for disabled Disrupts automotive industry? Escorts Group – Tractor Health Monitoring Internet of things • N/w of low-cost sensors, wireless NFC devices • Smart devices connect to mobile wallet & auto debit • Big data gets bigger with interacting machines • Early warning messages Disrupts service centres? New platforms make interactions social • 3-D printing consumers could save 50-60% in costs per printed product • Rapid prototyping, rapid manufacturing, mass customization, bioprinting Disrupts manufacturing! Som Mittal
  23. 23. E-Comm and Retail players are the true poster children of Big Data … 23 “Customers who bought this item also bought…” “You need baby products now” Som Mittal
  24. 24. 24 … with applications going beyond business, to creative arts and public health “We know what you like to see” "We own the Netflix customer experience from the moment they sign up, for the whole time they are with us, across TV, phone and laptop," - Todd Yellin, VP of product innovation. "We climb under the hood and get all greasy with algorithms, numbers and vast amounts of data. Getting to know a user, millions of them, and what they play. If they play one title, what did they play after, before, what did they abandon after five minutes?" “We can predict flu trends better and quicker than CDC” Google flu tracker USA CDC flu report Som Mittal
  25. 25. 25 Will require a lot of out of the box thinking How to inculcate a problem solving mindset in students school level onwards? How to partner with academic institutions? In a country of a billion plus people, how to encourage free flowing ideation? How to create next generation leaders from current Indian talent? Som Mittal Skill-set Social Media Analytics Mobility Cloud platform Domain skills Solutions/Recommendations India level - Hackathon / Codefest Collaboration with industry external partners Collaboration with Universities Problem Solving Leadership training How to fuel disruptive innovation in India? Source: NASSCOM
  26. 26. 26 Ecosystem is vibrant than ever! Som Mittal
  27. 27. 27 India has produced 3500+ tech startups… Som Mittal
  28. 28. 28 Som Mittal
  29. 29. Photo by kevin dooley - Creative Commons Attribution License https://www.flickr.com/photos/12836528@N00 Created with Haiku Deck
  30. 30. Have we missed the opportunity in UP? 30 Som Mittal
  31. 31. 31 If we act now we can still make it happen • We have to re-energize our colleges; improve the output; Som Mittal MOOCs; new ideas • Get entrepreneurship kicked in; set up incubators ; invite industry; create mentors; increase visibility • Focus on local solutions; tie up with Digital India vision • Do not start with trying to convince Government; they will follow • If need Govt., support be very specific; find a champion • Encourage participation in forums outside; expand network
  32. 32. 32 In Summary: Fortunate to be at this time • World is changing fast; globalization has made world almost a Som Mittal border less market • Technology has evolved and is now consumerised • New ideas and innovation are threatening old models and business as usual • India itself offers large opportunities to solve its problems • Government will itself be a key customer and driver • The eco system is encouraging entrepreneurship. Young people have more career options The future is of our own making - Will you be the next Disrupter?