Japan: Business Opportunities Experience of Indian Companies FICCI JETRO DIPP Tata Consultancy Servi

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Japan Business OpportunitiesExperience of
Indian CompaniesFICCI ? JETRO ?
DIPPTata Consultancy Services02 November, 2007
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• Japan Key Business Trends in IT

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IT Services Market Size Japanese IT Services
Spend expected to grow at CAGR of 3.2 from 2005
through 2010

Global/Japan IT Services Market SIze
13 of Worldwide IT Market
Source Gartner 2005
Worldwide IT Services market is expected to grow
at a healthy Rate of 5-6 with Japan keeping its
momentum at 3-4 CAGR between 2005 and 2010
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Japanese Outsourcing Market Market size is 32B
- Manufacturing and Financial Services companies
expected to continue leading the outsourcing
bandwagon
Source Gartner 2005
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Japan Offshoring DestinationsChina and India
are preferred destinations for Japan offshoring
Offshore volumes are likely to reach 5B by Year
2010
Japan Offshoring 1.4B YoY 40
China - 1.1B YoY 43
Transaction
Enterprise
Processing
Appl. Dev.
20
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Offshoring - Current Growth Engines
Embedded
Appl. Dev.
60

• Embedded Appl. Dev
• Enterprise Appl. Dev.

India - 0.29B YoY 24
Other APAC - 0.03B
Embedded Appl.Dev. 100
Source Gartner 2006, TCS GCP Research Desk
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Japan Offshoring Trends across Services
segmentInfrastructure operations likely to be
the next offshoring growth engine
App Dev Maint
Embedded RD
TP
High
Positive
Offshoring Maturity (History Adoption)
Package Implementation
QA
Promising
Note Size of the circle indicates market size
Negative
Infrastructure Operations
Appl. Mgmt
Call Center
BPO
Low
Source Gartner, 2006
Affinity (Language Culture - Knowledge)
High
Low
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Key Emerging Technology TrendsKey emerging
technology trends are driving opportunities for
enterprises to gain competitive advantage
Service Oriented Architecture (SOA)

• Today, more than 70 of large enterprises and
  50 of SMBs adopt some form of SOA in their
  organizations
• By 2008, SOA will provide the basis for 70
  percent of new development projects

Web 2.0 and SAAS

• The intent of SaaS (Software as a Service) is to
  deliver a service that has the attributes of an
  application utility (on-demand and one-to-many).
  It helps clients forgo customization for speed to
  implementation, agility and greater control of
  ongoing costs

• Through 2010, open-source products will account
  for 10 percent of the overall software portfolio
  in Global 2000 companies. This catalyst will
  restructure the industry, producing
  higher-quality software at lower cost.

Open Source
Infrastructure Virtualization

• Its use is well under way in financial services
  and in pharmaceutical firms

• RFID will enter broad use in business processes
  during the next 20 years because of continuous
  reductions in cost, improvements in performance
  and the development of standards

RFID
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• Experience of TCS in Japan

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Everyone agrees that
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Japan CIO ChallengesOptimizing Operational
costs and investing in Business Transformation
programs are key focus areas of Japan CIOs

• 70-80 of IT budget spent on Operating Expense
• High Cost Structure Low ROI on projects
• Skills Shortage Severe Supply-Demand gap
• Lack of Internal Project Management Skills
• Disintegrated IT Too many isolated applications

Source Gartner 2006 (CIO Survey of 550
Organizations in Japan)
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Challenges faces by Indian IT Industry in Japan

• Japanese projects tend to pose special challenges
  to IT project managers primarily due to
• Cultural Gap - Different business etiquettes,
  long working hours, process of collective
  decision making leads to delay
• Communication Understanding what is NOT told in
  words, shortage of bilingual technical persons
• Unclear Scope the initial statement of
  requirements from customers is not adequate,
  scope tends to increase as the project continues.
• Changing Requirements requirements do not get
  finalized till the very end, some new
  requirements are found during UAT
• Ambiguous contracts (warranty clause, work
  locations, etc..) typical Japanese contracts
  have lot of implicit assumptions
• Language Dependency Documentation, testing,
  integration, change in DB, UI
• Maturity of Onsite-Offshore Model most Japanese
  customers are not familiar or comfortable with
  the onsite offshore model
• Extended UAT (High expectation of quality) it
  is quite usual to have multiple rounds even at UAT

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Learning Do it differently Example of modified
SDLC
Customized Software Development Life Cycle for
Japan
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TCS Network Delivery Model for Japan
Single Japan Delivery Owner
Better encapsulation of Japan specific learnings
- leading to improved Service Delivery Customer
Satisfaction

• Centralized Japan Delivery Organization
• PMO Planning and Key Initiatives
• Nihongo KM Portal
• Language Training/ Cultural Initiatives
• Japan Delivery Training

Japan Customers
Yokohama
Shanghai
J-ODC Satellite Sites
Pune
J-ODC Satellite Sites
Bangalore
J-ODC Hub, Kolkata
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TCS Japan An Overview

• Setup Operations in 1987 1st Indian IT Services
  firm
• Near-shore facility setup in 2002 at Yokohama
• Currently 1600 associates serving Japanese
  clients, including
• 300 associates onsite in Japan
• 200 Bilingual associates (English Japanese),
  including 100 Native Japanese
• J-ODC (Japan Offshore Development Center) Hub at
  Kolkata, India satellite sites at Bangalore,
  Pune, Hangzhou, Shanghai (China)
• Customers include leading Investment Banks,
  Automotive major, Manufacturing and Insurance
  Corporations.

Enhancing value for Japanese Corporations through
Global Network Delivery ModelTM and Global Best
Practices customized for Local needs
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TCS Japan - Our Services
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Talent Management in TCS for Japan

• Talent Retention Experience sharing
• Effective Recruitment Training
• Academic Japanization Program
• Hiring from Japanese American Universities
• Japanese Language, Business, Culture training
• Global Workforce
• 23 Onsite associates Japanese
• Dedicated Japanese staff at J-ODC, Kolkata
• Up-skilling
• Program Management
• Domain Competencies
• Certification (including JLPT JETRO)
• Structured Leadership Development
• Customized Project Leaders Training Program for
  Japan market

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Arigato Gozaimasu Thank You