Chemicals Pharmaceutical Textiles Preface| Foreword|Executive Summary|Methodology|Cluster |SME Financing|Initiatives for SMEs |Industry Overview|Cluster Trends|Issues|Interview| Partners | Launch Event | Editorial Team Cluster Overview

Dun & Bradstreet India (D&B India) continues its commitment towards supporting the development of small and medium enterprises with the launch of SME Cluster Series 2009: Bengaluru. The publication is third in the cluster series that is dedicated exclusively to understanding the key clusters across the country. SME Cluster Series 2009: Bengaluru focuses on SMEs in the ITeS and BPO sector in Bengaluru. It gives an insight into the ITeS and BPO sector on the basis of data collected through questionnaires and interviews conducted with SMEs operating in this sector. The publication provides an update to readers on the present status and structure of the ITeS and BPO SMEs operating in the Bengaluru cluster in terms of operational highlights, key trends and IT usage. Further, it highlights the strategies used by SMEs that operate in the cluster and also comments on the future growth prospects of the cluster. Some of the key findings that are covered in the insights section are listed below:

• Over 93% of the surveyed companies are private limited companies that had a total income of more than Rs 5 mn as on Mar 2009.
• Traditional BPO services such as medical transcription, technical support, customer care, and document management emerged as the most popular service lines for the surveyed SMEs as these services had a 79% share in the total services offered. The KPO services (12% share) and clinical research (3% share) were the other popular services.
• BFSI continues to be the most-favoured vertical for ITeS and BPO SMEs in Bengaluru; the survey revealed that the vertical had a 49% share in the total verticals served pie. Healthcare and telecom verticals accounted for a share of 24% and 7%, respectively.
• The economic slowdown seems to have affected the employees deployed in support departments such as HR, finance and IT more than the ones employed in core ITeS functions. During June 2008- June 2009, the strength of employees in the core functions decreased by less than 0.5%, while the strength of employees in support functions decreased by 14%.
• Over 46% of the surveyed ITeS and BPO SMEs in Bengaluru earned more than 75% of their revenue from the domestic market whereas only 23.33% SMEs generated over 75% of their revenue from the international market.
• Among the surveyed companies, in terms of seat utilisation, companies catering mainly to the international market (0.83 employees per seat) have done marginally better than companies catering mainly to the domestic market (0.82 employees per seat).
• Data security and client requirements emerged as the key drivers for the surveyed ITeS and BPO SMEs in Bengaluru for upgrading their existing IT infrastructure. However, infrequent power supply was identified by these SMEs as the biggest hindrance in upgrading IT infrastructure.
• The surveyed companies pointed out that better infrastructure and availability of skilled manpower were the key benefits that the Bengaluru cluster offered to ITeS and BPO companies.
• The surveyed ITeS and BPO SMEs in Bengaluru found maintaining data secrecy and tackling high employee attrition to be the biggest challenges.
• As countries across the world are gradually recovering from the slowdown, 46% of the surveyed ITeS and BPO SMEs in Bengaluru have a pessimistic outlook, and feel that the sector will record a growth rate of below 10% in the next 2 years.

Kaushal Sampat
Chief Operating Officer
Dun & Bradstreet India