The Information Technology Enabled Services (ITeS) industry, estimated to have experienced a 10% growth in dollar terms, reaching $46 billion in FY23, is anticipated to sustain its momentum with a projected 7-9% growth in the current financial year. This positive trajectory is supported by a robust order book, resilient to the global economic slowdown, as expenditures in this sector are predominantly non-discretionary.

This outlook bodes well for Micro, Small, and Medium Enterprises (MSMEs), constituting 30-40% of the industry, particularly in essential segments such as Customer Relationship Management (CRM), Transaction Services, and Knowledge Process Outsourcing (KPO).

The industry's expansion is expected to be driven by an increased adoption of premium services. This includes a transition to non-voice services within the CRM segment, a surge in digital payments in the transaction services sector, and the evolution of analytics-based offerings in the KPO domain. Additionally, the travel segment is anticipated to contribute significantly, experiencing double-digit revenue growth and further boosting the overall growth of ITeS.

However, despite the positive outlook, the ITeS employee base is forecasted to grow by 0-1%, reflecting a cautious approach among companies. This caution is attributed to deferred discretionary projects, with firms prioritising internal programs for cost optimisation and efficiency improvement. The emphasis is on skill-based additions rather than scaling up, as companies navigate through the dynamic landscape of the industry.

Source: Business Standard