Monday, July 15, 2013

Worldwide IT Spending 2013 -2014 Gartner reduced due to currency fluctuations & PC Sales

Worldwide IT spending is projected to total $3.7 trillion in 2013 including Telecom Services, a 2 percent increase from 2012 spending of $3.6 trillion, which is half of what Gartner forecasted earlier at the beginning of 2013 in first quarter in U.S. dollars was 4.1 percent. The 2.1 percentage point reduction was forced due to the recent fluctuations in U.S. dollar exchange rates; growth in constant currency is forecast at 3.5 percent for 2013, down only slightly from last quarter. With the Indian rupee falling to record lows, from Rs 54 at the beginning of 2013, it touched Rs 60 against the US dollar Indian companies have reduce their IT budgets as most of the Software, Hardware and Services are imported and are paid for in US dollars. Most of the emerging market currencies have depreciated significantly against dollar which forced Gartner to reduce the IT spending for 2013. Excluding the Telecom services the Global IT Spending is estimated to reach $ 2.068 trillion in 2013 and $ 2.181 trillion in 2014. Apart from the currency fluctuations, the big decline in the forecasting of devices led to significant fall in growth and the forecast for spending on devices in 2013 has been revised down from 7.9 percent growth in Gartner's previous forecast to 2.8 percent.

Within the devices segment majority of the decline is in PC sales, which was highlighted both in the first quarter and second quarters of 2013, with little recovery expected during the second half of 2013. Personal computer sales is hit hard by both the Tablets and the smartphones both at the high end and mid end and both tablets and smartphones are offering equivalent computing power that is offered by a laptop or desktop and customers are using these mobile devices more to browse internet, access email and Social networking sites through mobile devices. While new personal computers particularly laptops that are sleek in design and with touch screen capabilities are expected to be launched in the second half of 2013, they will fail to gain market share due to the underlying weakness of the traditional PC market.

Tablets and Smartphones are expected to keep up the growth rates as highlighted by the outlook for tablet revenue for 2013 is 38.9 percent growth, while mobile phone revenue is projected to increase by 9.3 percent. Enterprise software spending is on pace to grow 6.4 percent in 2013 within which growth forecast for customer relationship management (CRM) have been raised as its adoption expanded coverage into e-commerce, social and mobile. Expectations for digital content creation and operating systems have been reduced as software as a service (SaaS) and changing device demands impact traditional models and markets. Overall both the macroeconomic volatility and changes in the technology trends are impacting the IT spend in 2013 and expected to have significant impact in 2014 too.

Sunday, July 7, 2013

Legal Process Outsourcing Industry in India targeting to reach US$ 1 billion by 2015

Legal Process Outsourcing Industry often termed as LPO industry is targeting to reach US$ 1 billion in revenues in the next two years from the present levels of US$ 440 million. Of course this seems to be an extremely ambitious target as India is no longer the only preferred destination for outsourcing and countries like Philippines, etc. too have emerged as the best alternative destination for outsourcing. More and more business organizations across the globe are looking to outsource to only those countries that not only offer low prices but also have the necessary infrastructure in terms of qualified human resources, information technology and government support. But India is still considered to be the first choice for the Law firms in US and UK that wish to outsource legal services as India has more than 950 law schools that train approximately 60,000 law graduates and qualify them to join the legal profession who will join the 1.2 million registered advocates in the country. Many of the new law graduates prefer to join the LPO firms and the corporate sector rather than opt for judicial clerkship or litigation practice. The number of LPO firms has increased to 140 from around 50 in 2005 and this has led to increased opportunities for law graduates and these firms offer very good salaries. Litigation and judicial clerkship requires a lot of struggle to establish reputation which students today prefer to avoid, but many industry experts and seasoned lawyers believe that finally all the law graduates have to at some point go to courtroom and practice.

Indian LPO firms offer services like reviewing documents and basic due diligence, to automation and process efficiency, review contracts, process loans, provide expert witness advice on data-collection, draft patent applications and conduct litigation-readiness assessment, etc. One of the major challenges for the LPO industry is that every country has a different legal system and the LPO firm employees have to be trained accordingly and Indian law is mostly based on the British Legal system so there is a basic understanding of the British law and they can also easily understand the American Law too which is major competitive advantage for Indian Lawyers.  Another crucial factor is the low cost and subsequent low pricing that Indian firms offer, for example for drafting contracts and legal memos a US Lawyer can charge somewhere between US$ 300-400 per hour but in India same work can be done with US$ 10-30 per hour. This is a major cost advantage for the US and UK law firms and corporate legal departments in business organizations who need to cut costs constantly to survive. The availability of skilled lawyers along with the government support the LPO industry is hoping to cross the billion dollar revenue mark in the next couple of years. Most of the private Universities and big educational groups in India are offering dual degree programs like BBA-LLB, BA-LLB and are also offering Masters Programs in Law with specialization focused on Intellectual property rights, financial and Business laws, etc. which will also help the LPO firms to offer even more specialized services to their clients. Many law students are coming from middle class families who take educational loans for studies and Indian Law firms are majority family owned Law firms which do not provide much opportunity for fresh graduates and everyone cannot enter into Judicial services, corporate legal departments and practice litigation, the only option they have is Legal Process outsourcing firms.