Software Technology Parks of India - Visakhapatnam

1. ` Key Enabler for Effective Business Growth :: CMA M.P.Dubey Joint Director and OIC Software Technology Parks of India - Visakhapatnam

2. The History of Indian IT Industry

3. The traditional image of India is now a thing of past • Globalization: Driving into the Emerging Storm • Sophisticated telecommunication systems & infrastructure • Affordable access to core information resources

4. 1986 DOE announces Software Policy 1991 - Establishment of Software Technology Parks Establishment of dedicated Earth Stations for Software Exporters. 1989-90 Apex Industry Association NASSCOM set up. 1998-2000 Development of secondary Cities and creating new Software Hamlets Various Incentive IT policy by State Govt. Now Indian Software Export industry touched US$ 100 B Tracing the History of India’s S/W Exports • New Industrial policy unveiled • Drastic reduction in Import Duty of Computers & software

5. World Class Quality Cost-Effectiveness High Reliability, Rapid Delivery State-of-The-Art- Technologies and Infrastructure Supportive Govt. Policies Unique Time Zone Advantages Where Opportunity is Matched by Diversity

6. Large English Speaking Manpower Resources . High Class Academic Institutions & Chain of R&D Centers of Excellence across the country. Vast pool of trained manpower of both software & hardware engineers Contd…

7. Problem faced by IT industry Software companies are facing rapid change in business environment heightened global competition An increasing need for improvements to cycle time, cost, quality

8. Competitive Location for outsourcing High High Low Low Low Low High High Size of circle indicates quantum of IT services exports Size of circle indicates quantity of knowledge workers IT Services IT Enabled Services Location Advantage Infrastructure Country risks/ FDI incentives Time zone attractiveness Geophysical zone attractiveness Future Strengths Size of IT services Exports Sustainability of cost advantage Depth of talent pool Quality of service delivery Conduciveness of regulatory environment Ireland Australia India Singapore UK China India China Ireland Philippines Russia Mexico People Advantage English language Cost Type of skills Abundance Current Strengths Cost of Service delivery Quality of service delivery Regulatory environment

9. This is where Global I.T. Business is The Indian software professionals have created and established their brand image in the increasingly competitive global market with I.T industry becoming an engine of growth for all sectors of the economy • Indian Infotech companies have been listed on American Stock Exchange & London Stock Exchange. • Majority of the multi-national companies in IT have either Software Development Centre or Research Development Centre in India. Onshore- outsource –BPO-KPO

10. STATUS OF IT-BPM INDUSTRY • Estimated IT-BPM exports in FY 2014 – 86 Billion(13% YOY) • Share in National GDP – 8.1% • Direct Employment – 3.1 million • Indirect Employment- 10 million

11. IT/ITES IN VISAKHAPATNAM

12. IT/ITES IN VISAKHAPATNAM Infrastructure

13. IT/ITES IN VISAKHAPATNAM Exports: Approximate Export Income Earned

14. IT/ITES IN VISAKHAPATNAM Employment: Approximate Employment Generated

15. Role of CMA (Cost& Management Accountant) in Information Technology & Information Technology enabled Services (IT & ITeS)

17. Role of CMA in IT/ITES Businesses today are under more pressure Under the current economic conditions and the rising cost of debt, management teams will require additional effort in restructuring or streamlining operations of acquired businesses to deliver success

18. Role of CMA in IT/ITES Management Accounting techniques has undergone a lot of development from preparing Cost-Volume-Profit Analysis to latest techniques like EVA, Activity Based Management, etc. The expectation from management accountant has been changing with the advancement of technology and new challenges faced to analyze business for its competitiveness.

19. Role of CMA in IT/ITES Management accounting played a great role in decision making now a days such as marginal costing, standard costing, budgeting etc. Marginal costing is helpful for taking new decisions like launch new product whether it is beneficial to invest in it or not. By using techniques of marginal costing, . Same way standard costing, is for calculating variance & deviation from standard and make solutions to improve it. Budgeting for forecasting about figures to do analysis. Other techniques are also available. ………use of IT/ITES tools will increase the productivity & strategy……….

20. Futuristic role of Cost and Management Accountants Management Accountant has to be futuristic including “how better” and help management in decision-making level and for performance improvement. Management Accountant will more often play the role of a catalyst / changing agent rather than an accountant. Change in mind-set from product profitability to customer profitability analysis.

21. Changes in tools and techniques Target costing v/s. Historical costing. Life cycle costing. Activity Based Costing (ABC) – ABM. Total Cost Management (TCM) Business Process Re-engineering (BPR) Benchmarking. Kaizen costing. Total Quality Management / ISO. Cycle time reduction (time compression). Supply chain management (SCM). Just in time (JIT). Elimination of dysfunctional activities.

22. Changes in tools and techniques • Out sourcing and co-sourcing activities. • Defect prevention v/s. fault rectification. • Zero Based budgeting. • Traditional budgeting v/s. New budgeting (comparative Table enclosed). • Full year budget exercise v/s reactive rolling forecast (computer generated budgets are obsolete the minute they are printed). • Dis-continuity of time cycle – month end and year end- and to invent information system to handle multiple time horizons simultaneously. • Radical change in IT/MIS e.g. • Integrated database that meet the total business requirements (like ERP Software • MIS that is accessible and easy to use by all staff. • Rich supply of information in the form of a variety of report. • MIS for decision-making.

23. Human Capital availability and Skill gap analysis in Successor States to meet the dynamic needs of the country

24. Human Capital Availability & Skill Level in Successor States Availability Skill Level IT Industry Software Engineers (0 – 3 / 4 Years) Team/Project/Module Leads (5 – 8 Years) Project Managers (9 – 14 Years) Business Heads/Delivery Heads (15 + Years) BPO Industry Executive - Voice based (0 – 3 / 4 Years) Executive – Non Voice based (0 – 3 / 4 Years) Team Lead (5 – 8 Years) Process Manager (9 -14 Years) KPO Industry Executives (0 – 3 / 4 Years) Domain Specialists & Team Lead (5 – 8 Years)

25. Profile of people employed in the IT Industry

26. Skills required and skill gaps in the IT Industry – Delivery • Role: Software Engineer/ Sr. Software Engineer (0 – 4 Years) • Skills Required • Ability to think logically/analytically • Basic Programming & Database management skills – at least one language/platform • Adequate communication skills (written & verbal) • Ability to think beyond ‘Programming’ and acclimatize with the concept of ‘Software Engineering’ and ‘Systems Thinking’ • Skill Gap • Inability to ‘deep-dive’ into a particular language/technology platform • Inadequate soft skills, especially when it comes to interacting with the client • Inadequate knowledge of corporate culture – reporting, compliance, escalations, e-mail etiquettes and protocols. • Do not view their role as a ‘software engineer’ – more as a ‘programmer’ – leads to lack of ‘systems approach/thinking’ • Poor awareness of concepts of software engineering.

27. Skills required and skill gaps in the IT Industry – Delivery • Role: Project Leads / Module Leads (5 - 8 Years) • Skills Required • Competency in a few technology areas, programming languages/platform, or domain – deep expertise required either in technology or domain or both • Ability to understand the basics of software architecture – databases, platforms, hardware, servers, etc. • Understanding of business functionality resident in the software • Ability to understand customer needs • Ability to translate the Functional Specifications to Design and System Specifications • Ability to lead and work with a team • Skill Gap • Inadequate specialisation • Poor domain exposure • Less than adequate ability to undertake project estimation • Inadequate communication skills and soft skills • Leadership traits and people management skills

28. Skills required and skill gaps in the IT Industry – Delivery • Role: Project Managers (9 – 14 Years) • Skills Required • Deep domain knowledge • Adequate technical knowledge • Ability to interface with customer and on-site teams • Team management skills • Knowledge of process and quality compliance • Project Management skills • Process Management and Risk Management skills – covering Time, Cost, Quality, Delivery • Skill Gap • Inadequate domain/business knowledge • Inadequate ‘solutions’ mind-set when interacting with customer • Inadequate process knowledge • Skills are learnt by experience, and no structured training programmes

29. Skills required and skill gaps in the IT Industry – Delivery • Role: Business or Group Head / Delivery Head (15+ Years) • Skills Required • Ability to maintain profitability of business • Adequate client management skills • Escalation management skills • Ability to plan, set business targets, chart out recruitment and staffing plan • Flair for ‘deal making’ and clinching deals with customers • Ability to negotiate with customer • Skill Gap • Inadequate ability to manage large scale on transition from a Project Manager to a Business Head position • Less than required negotiation skills when interfacing with customers.

30. Major trends impacting skill requirements for the IT Industry • Continuing demand for a skilled workforce • Continuing and building upon transformation from IT Services to include IT Consulting • Continuing focus on Innovation and Product Development • Green IT and Cloud Computing • Increasing play in Migration Projects • Increasing share of new business verticals (retail, healthcare, telecom,…) • Increasing play of Infrastructure Management Services • Larger share of newer markets and Domestic market • Evolution of newer pricing models (outcome based) • Price pressure/cost competitiveness

31. Strategies to meet the talent requirements - IT / ITeS • Government – Industry – Academia team to work on availability of employable workforce at entry level • Encourage and attract reverse migration of talent ( a critical factor in quick talent pool development) • Retain talent pool by creating an eco system that is attractive on the personal front through creation of affordable, good quality and easily accessible housing, entertainment, schools, and high quality support infrastructure • Employee and employer friendly policies and rewards systems

32. eGovernance Vis a Vis Information Technology to achieve Digital India By Progression of information technology resources in India, great opportunity comes to deliver information and services to citizens and business.

33. Digital India Nine Pillars of Digital India- A programme to transform India into a digitally empowered society and knowledge economy Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=108926

34. Pillar 1. Broadband Highways 1yr: 50,000 GP 2yr: 100,000 GP 3yr: 100,000 GP Changes in Rules to facilitate. Integration of SWAN, NKN, NOFN. To be implemented in 2 years Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=108926

35. Pillar 2. Universal Access to Mobile connectivity Ongoing Programme Increased network penetration & coverage of gaps Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=108926

36. Pillar 3. Public Internet Access Programme – National Rural Internet Mission Ongoing Programme Reach of Govt. services to all GPs This should be long term vision for POs Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=108926

37. Pillar 4. e-Governance: Reforming Government through Technology • Government Business Process Re-engineering using IT to improve transactions • Form Simplification, reduction • Online applications and tracking, Interface between departments • Use of online repositories e.g. school certificates, voter ID cards, etc. • Integration of services and platforms – UIDAI, Payment Gateway, Mobile Platform, EDI • Electronic Databases – all databases and information to be electronic, not manual • Workflow automation inside government • Public Grievance Redressal - using IT to automate, respond, analyse data to identify and resolve persistent problems – largely process improvements • To be implemented across government - critical for transformation. Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=108926

38. Pillar 5. eKranti - Electronic Delivery of Services • Technology for Education – e-Education • All Schools connected with broadband • Free wifi in all schools (250,000) • Digital Literacy program • MOOCs – develop pilot Massive Online Open Courses • Technology for Health – e-Healthcare • Online medical consultation • Online medical records • Online medicine supply • Pan-India exchange for patient information • Pilots – 2015; Full coverage in 3 years • Technology for Planning • GIS based decision making • National GIS Mission Mode Project • Technology for Farmers • Real time price information • Online ordering of inputs • Online cash, loan, relief payment with mobile banking • Technology for Security • Mobile Emergency Services • Technology for Financial Inclusion • Mobile Banking • Micro-ATM program • CSCs/ Post Offices • Technology for Justice • e-Courts, e-Police, e-Jails, e-Prosecution • Technology for Security • National Cyber Security Co-ordination Center Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=108926

39. Pillar 6. Information for All • Online Hosting of Information & documents • Citizens have open, easy access to information • Open data platform • Government pro-actively engages through social media and web based platforms to inform citizens • MyGov.in • 2-way communication between citizens and government • Online messaging to citizens on special occasions/programs • Largely utilise existing infrastructure – limited additional resources needed Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=108926

40. Pillar 7. Electronics ManufacturingTarget NET ZERO IMPORTS by 2020 • Target NET ZERO Imports is a striking demonstration of intent • Ambitious goal which requires coordinated action on many fronts • Taxation, Incentives • Economies of Scale, Eliminate cost disadvantages • Focused areas – Big Ticket Items • FABS, Fab-less design, Set top boxes, VSATs, Mobiles, Consumer & Medical Electronics, Smart Energy meters, Smart cards, micro-ATMs • Incubators, clusters • Skill development • Government procurement • There are many ongoing programs which will be fine-tuned. • Existing Structures inadequate to handle this goal. Need strengthening. Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=108926

41. Pillar 8. IT for Jobs New Scheme IT ready workforce ICT enabled growth in NE Ongoing Skilled VLEs and Viable CSCs Telecom ready workforce Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=108926

42. Pillar 9. Early Harvest Programmes Targeted Mass messaging since July 14 1st e-Greeting from PM on 15th Aug 2014 To be completed by Oct 2014 Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid=108926

43. IT/ITES IN VISAKHAPATNAM

44. STPI - FACILITATOR The software exporters’ window to the world

45. OBJECTIVES Areas of To promote the development and export of software and software services including IT-enabled services (ITeS) / Bio-IT. Achievements Growth of IT exports SME Enablement Dispersal of Industry Shift from On-shoremodel to Offshore model Employment Generation To provide statutory and other promotional services to the exporters by implementing Software Technology Parks (STP)/ Electronics Hardware Technology Parks (EHTP) schemes and other such schemes which may be formulated and entrusted by the Government from time to time. To provide data communication services including value added services to IT/ITeS related industries. To promote micro, small and medium entrepreneurs by creating conducive environment for entrepreneurship in the field of IT/ITeS.

46. SOFTWARE TECHNOLOGY PARKS OF INDIA ACTIVITIES • Statutory services – STPI has been implementing the STP (Software Technology Park) and the EHTP(Electronic Hardware Technology Park) schemes • Datacom services – STPI provides datacom services specifically to the software exporting industry • Incubation services - STPI has been providing “state of the art” facilities for technological incubation • Project Management and Consultancy Services – STPI has been providing consultancy services in the areas of communication network implementation, e-governance infrastructure, data centers, network management systems, IT infrastructure management, state of the art network operations centres, co-location and content hosting infrastructure. • Marketing & business promotion support to SMEs – STPI has been promoting SMEs and their cause by offering incubation services, organizing events, sponsoring/co-sponsoring events and co-organizing IT events

47. SOFTWARE TECHNOLOGY PARKS OF INDIA KEY BENEFITS (STP SCHEME) • Single window clearance scheme • STP unit can be set up anywhere in India • 100% foreign equity is permitted • Duty free imports of hardware & software in the STP units • Import of second-hand capital goods is also permitted. • Unit shall be a positive net foreign exchange earner • The sales in the domestic tariff area (DTA) are permissible up to 50% of the export in value terms • Reimbursement of central sales tax (CST) and exemption of excise duty on procurement of capital goods from DTA

48. STPI Ecosystem: Par Excellence • Policy modification • Collaboration with state agencies & educational institutions Interface between Govt. & Industry Facilitation 1. STP Scheme: Cornerstone of Indian IT policy 2. Single window clearance and fiscal benefits under STP Scheme Statutory Role Single Window Clearance and Infrastructure provider ONE STOP SHOP 1. Professional Grade Broadband connectivity, 2. Incubators space for Tiny & SME 3. International cooperation seminars, collaborative Projects Service Provider, Project Consultancy & Trainings 1.Dispersal of industry to tertiary cities Stimulating Demand Development Role

49. Support Centre of SMEs Accelerated Growth of Software Exports Key Achievements of STPI Accelerated Employment Generation Vehicle for Uniform Regional Development KEY ACHIEVEMENTS OF STPI

50. GROWTH IN SOFTWARE EXPORTS BY STP UNITS NATIONAL SOFTWARE EXPORTS(12-13) - $75.8 b (Rs. in Crores.)