Category Factors

For ITES (Enterprises S/w)Industry

Introduction
ITES(Information technology as Enterprises Service).

 One of the booming business side in IT industry &

believed to be the parent of SaaS industry.
 Considered as a revolution maker in back office
operations.
 Challenges the other industries which are having a
larger number of World class players.
 Dominated by few world class companies like Oracle,
IBM, Microsoft Dynamics, SAP, etc.
 Provides job opportunities for most of the IT
companies(Coding, Analyzing, Testing, Integration).
Category Factors
 Category Size

 World Class organizations occupy a huge space of the

available market, as they meet efficient progress
through quality product supply.
 Local/Domestic level organizations contributes much
in developing and under developed nations providing
customized applications.
 Red carpet welcome for Global and Domestic
emergent's, as more than 60% of the industries are
not using or unsatisfied with current products around
the world.
Category Factors
 Market Growth

 Shown a strong growth in last five years,

particularly in developing nations due to
advancement in technology and rapid growth of
client industries.
 Domestic market has grown by 2 times as number
of local players are very less.
 Number of domestic sub industries too, has grown
100% in last 2 years.
Category Factors
 Threat for New Entrants

 The Industry is wide open for new entrants.

 A large number of companies are emerging, which
shows the available place for new competitors.
 But, the race is against world class players.
 Buyers look for tested & quality products.
 Economy of scale, keeps the new entries in a
remote place.
Category Factors
 Economies of Scale

 Product mix such as CRM, ERP, HCM, Retailing, etc.,

are given by all the world class suppliers.
 The standard products has high economies of scale
as the same product is sold all over the world for
specific industrial purpose.
 Customized Software products has low economies
of scale as unique software has to be designed on
demand.
Category Factors
 Product Differentiation

 Though all the firms make software for similar

industries, quality and access to users gives the
competitive advantage.
 Advanced technology based software makes it
perform better.
 Few industries provide software with human
resources support, in order to provide service
difference(competative advantage)
Category Factors
 Capital Requirement

 Software firms need a huge investment as initial to

develop infrastructure and to make software.
 Has to spend in promotion, sales force distribution
arrangements and legal formalities.
 Product may take years for user ready stage, so
monetary support should be high.
 Different software has to be made for different
industries and for different purposes and recycling
of software, which incurs very high capital.
Category Factors
 Switching Cost

 Cost of each software is very high (12 lacs<).

 Implementation needs very high technical structure
and support.
 User’s training incurs very high cost for every new
tool.
 Data formatting takes a long time to process
according to different software repository.
Category Factors
 Distribution

 ITES firm use different source of distribution, that

includes sale, Implementation, Training, information
gathering and recycling/ updating of products.
• Internet marketing and Selling(templates),
• Through resellers(geographical based),
• Potential partners(Demographical),
• Consultants(work nature based),
• Educational institutes,
• SaaS industry.
Conclusion