Every major historical transformation needs an enabler. Today, advances in technology have left us in no doubt that information and communications technology is the leading enabler for global competitiveness and driving innovation. Foot print of ICT can be seen in the massive growth witnessed in the recent years across sectors including education, healthcare, financial services, business process outsourcing, FMCG etc. in recent times, companies are fast realize that technology has transformed from being a growth enabler to being a growth driver. Technology is helping companies to offer new and innovative products, drive operational excellence, lower costs and manage compliance and risk management functions. In this environment, successful companies are likely to be those that achieve the right balance between speed in the pursuit of the right strategy and the need for focus on operational execution.
Gender Analysis
The gender distribution in the industry is male dominant and the overall male percentage is as high as 90% of the total employed. The situation was similar in both sectors of the industry.
Age Analysis
With respect to the age groups, the majority of employees belonged to the age group of 18-29 (54%) and the older age group is above 45 is consisted of only 7.5% this could be due to the fact that this industry itself was in its infancy, had attracted the younger age groups or those who recently completed secondary and technical education. This trend could be considered encouraging as the past tendency in Sri Lanka was to opt for an accounting or a making career. However the question is to what extent the technical courses offered were capable of fulfilling the job market requirements.
Sri Lanka is positioned to be regional outperformer on the back of strong economic growth as the end the security dividend catalyses faster growth. We forecast a CAGR of 14.8% for 2013-2017, with the market increasing to a value of LRK103bn in 2017. We have a positive outlook for the growth of Sri Lanka IT market over the medium term and expect it to close some of the gap with its regional peers in the terms of PC, software and services penetration. As well as strong domestic demand the local IT industry is also developing, with a vibrant local software and BPO industry. It is also becoming a hub for PC manufacture and assembly to service the local market and wider region.
Sri Lanka’s telecoms market is mature when compared with its regional peers: penetration rates are high, 3G licenses were first available in 2007 and by mid 2013 two Sri Lankan operators had launched 4G LTE services with more launches expected in the near future. Sri Lanka is also seeking to improve speed in the wire line market, with a national broadband network strategy taking shapes as the government aims to facilitate internet access. While Sri Lanka is relatively well developed, its progress has not always been smooth, as the civil war previously prevented the development of telecoms infrastructure in affected areas in the north of the island. Since the end of the civil war, private and public sectors are aggressively investing in the reconstruction and expansion process.
Information Technology essentially refers to the digital processing, storage and communication of information of all kinds. Software development can be broadly categorized into custom developed software and packages or generic software products. Customized software development involves close interaction between the developed team and the end user. Typically, software companies that provide customized software concentrate on vertical market segments or domain areas, like retail, banking and manufacturing.
Software exports make up 20 % of India’s total export revenue in 2003-04, up from 4.9 % in 1997. This figure is expected to go up to 44% of annual exports by 2010. Software service exports increased from US $ 0.50 million in 1990 to $5.9 billion in 2000-01 to 23.6 billion dollars in 2005-06 recording a 34% growth.. Though India accounts for just about 3 % of the world market for information technology services, this sector has been growing at a scorching pace, helped by a large pool of English-speaking workers, nearly 4 million engineers and the increasing tribe of tech-savvy entrepreneurs in the country. The Information Technology industry currently accounts for almost 4.8 % of India’s GDP. It will account for 7 % of India’s GDP by 2010.
A compound annual growth of over 25% per annum is expected over the next 5 years even on the expanding base. The impact on the economy of projected software and IT enabled service exports of $ 60 billion by 2010 is likely to be profound. One manifestation is that India notched up a current account surplus in 2001-02, for the first time in 24 years.
We also can understand from the following analysis that IT industry is very useful for the everyone who are connected with the sector and also who are not connected with sector the there we are take some factor for analyzing the sector that are social, technology, economical, ethics, political ,legal so we can easily understand from that.
These are social factors, the IT industry, the right of the employee participation, language barriers, race, nationality or other business subjects ranges. English spoken language in India has largely help in promoting the industry relationship and interaction in India and on the global stage.
The software industry is viewed by many as an exciting sunrise industry that is key to future competitiveness for our economy.
IT exports:
Hardware (US $ millions) 8,263
Software (US $ millions) less than 12
With such rapid growth the software related service sector today accounts for over 2.6% of GDP in 2003-2004 compared with 0.5% in 1996-97, representing a more than fivefold increase. Its share of India’s exports of goods and services has increased even seven fold (from 3.2% to 21.3%) during the same period. Furthermore, India’s share of the global market for customized software that is outsourced across borders is also more significant. The rapid growth of software exports in the 1990s has been moderated since 2001. Software development and use, the life cycle includes analysis and specification of requirements, design, coding, testing, installation, maintenance and support.
E-government is the application of Information and Communication Technologies (ICT) by government agencies. It was started for the first time in 2006. Its use promises to enhance the effectiveness and efficiency of government and alter its relationship with the public. E-Governance models can be used for effective governance and for higher agricultural growth and development.
In providing health-care services to over 56 million Thais, IT can play a vital role in improving the efficiency and effectiveness of delivery. Thus, both computers and telecommunications are imperative.’
SUMMARY OF PART ‘ II
To focus on core IT Business, it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013.The demerged company offers consumer care, lighting, healthcare and infrastructure engineering and contributed to approx. 10% of the revenues of Wipro Limited in previous financial year.
The company was incorporated on 29 December 1945, in Mumbai by Mohamed Premji as ‘Western India Products Limited’, later abbreviated to ‘Wipro’.
Wipro acquired Wipro Acer. Wipro became a more profitable, diversified corporation with new products such as the Wipro Super Genius personal computers (PCs). Wipro Limited is a global provider of comprehensive IT solutions and services, including Systems Integration, Consulting, Information Systems outsourcing, IT-enabled services, and R&D services.
Wipro Infrastructure Engineering is the hydraulics business division of Wipro Limited and has been in the business of manufacturing hydraulic cylinders, truck cylinders, and their components and solutions since 1976. This division delivers hydraulic cylinders to international OEMs and represents the Kawasaki, Sun Hydraulics.
At the end of FY 2012-13, its employee strength was 134,541 of which 30% were women and 0.35% was persons with disabilities. Its global workforce consists of 98 nationalities working from 57 countries. Approx. 8.5% of its workforce is non-Indian. The average age of a Wipro employee is 29 years.
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‘ Global R&D facility. Retention of the man-power is the best in the industry. Impressive list of clientele. Relatively lower receivable compared to the industry average Diversified skill base across service lines.
‘ Free floating stock is very less. Domestic market was huge but was underdeveloped Small player in global market Limited domain.
‘ In the consultancy area. In the emerging technology areas like Blue Tooth, WAP etc. Huge global market The Company has entered into the global market so now it’s the biggest opportunity available to the company.
‘ Competition by Indian companies in domestic market Presence of big companies in global market Exchange rate: This can be a threat to the company as the company is making profits due to the high exchange rate and if this rate comes down in future it can lead to a major problem for the company.
INTRODUCTION OF WIPRO
Wipro Limited (formerly Western India Products Limited is a multinational IT Consulting and System Integration services company headquartered in Bangalore, Karnataka, India. As of December 2013, the company has 147,000 employees servicing over 900 large enterprise corporations with a presence in 61 countries. Wipro is the third largest IT services company in India and 7th largest worldwide On 31 March 2013, its market capitalization was INR 1.07 trillion ($19.8 billion), making it India’s 10th largest publicly traded company. Azim Premji is a major shareholder in Wipro with over 50% of shareholding.
To focus on core IT Business, it demerged its non-IT businesses into a separate company named Wipro Enterprises Limited with effect from 31 March 2013.The demerged company offers consumer care, lighting, healthcare and infrastructure engineering and contributed to approx. 10% of the revenues of Wipro Limited in previous financial year.
HISTORY
Early formative years
The company was incorporated on 29 December 1945, in Mumbai by Mohamed Premji as ‘Western India Products Limited’, later abbreviated to ‘Wipro’. It was initially set up as a manufacturer of vegetable and refined oils in Amalner, district Jargon, Maharashtra, under the trade names of Kishan, Sunflower and Camel. The company logo still contains a sunflower to reflect products of the original business.
In 1966, after Mohamed Premji’s death, his son Azim Premji returned home from Stanford University and took over Wipro as its chairman at the age of 21.
During the 1970s and 1980s, the company shifted its focus to new business opportunities in the IT and computing industry, which was at a nascent stage in India at the time. On 7 June 1977, the name of the company changed from Western India Vegetable Products Limited, to Wipro Products Limited.
The year 1980 marked the arrival of Wipro in the IT domain. In 1982, the name was changed from Wipro Products Limited to Wipro Limited. Meanwhile Wipro continued to expand in the consumer products domain with the launch of "Ralak" a tulsi-based family soap and "Wipro Jasmine", toilet soap.
1966’1992
In 1988, Wipro diversified its product line into heavy-duty industrial cylinders and mobile hydraulic cylinders. A joint venture company with the United States’ General Electric in the name of Wipro GE Medical Systems Pvt. Ltd. was set up in 1989 for the manufacture, sales, and service of diagnostic and imaging products. Later, in 1991, tipping systems and Eaton hydraulic products were launched. The Wipro Fluid Power division, in 1992, developed expertise to offer standard hydraulic cylinders for construction equipment and truck tipping systems. The market saw the launch of the "Santoor" talcum powder and "Wipro Baby Soft" range of baby toiletries in 1990.
1994’2000
In 1994, Wipro set up an overseas design centre, Odyssey 21, for undertaking projects and product developments in advanced technologies for overseas clients. Wipro InfoTech and Wipro Systems were amalgamated with Wipro in April that year. Five of Wipro’s manufacturing and development facilities secured the ISO 9001 certification during 1994’95. In 1999, Wipro acquired Wipro Acer Wipro became a more profitable, diversified corporation with new products such as the Wipro Super Genius personal computers (PCs). In 1999, the product was the one Indian PC range to obtain US-based National Software Testing Laboratory (NSTL) certification for the Year 2000 (Y2K) compliance in hardware for all models.
Wipro Limited joined hands with a global telecom major KPN (Royal Dutch telecom) to form a joint venture company ‘Wipro Net Limited’ to provide internet services in India. The year 2000 was the year Wipro launched solutions for convergent networks targeted at Internet and telecom solution providers in the names of Wipro OSS Smart and Wipro WAP Smart. In the same year, Wipro got listed on New York Stock Exchange. In early 2000 Wipro Vice Chairman Vivek Paul and Azim Premji approached KPMG Consulting Vice Chairman Keyur Patel and CEO Rand Blazer to form an mega-outsourcing joint venture between the two organizations.
2001’present
In February 2002, Wipro became the first software technology and Services Company in India to be certified for ISO14001 certification. Wipro also achieved ISO 9000certification to become the first software company to get SEI CMM Level 5 in 2002. Wipro Consumer Care and Lighting Group entered the market of compact fluorescent lamps, with the launch of a range of CFL, under the brand name of Wipro Smartlite. As the company grew, a study revealed that Wipro was the fastest wealth creator for 5 years (1997’2002). The same year witnessed the launch of Wipro’s own laptops with Intel’s Centrino mobile processor. Wipro also entered into an exclusive agreement with the owners of Chandrika for marketing of their soap in select states in India.[30][31] It set up a wholly owned subsidiary company viz. Wipro Consumer Care Limited to manufacture consumer care and lighting products. In 2004 Wipro joined the billion dollar club. It also partnered with Intel for i-shiksha. The year 2006 saw Wipro acquire cMango Inc., a US-based technology infrastructure Consulting firmEnabler, and a Europe based retail solutions provider In 2007, Wipro signed a large deal with Lockheed Martin. It also entered into a definitive agreement to acquire Oki Techno Centre Singapore Pte Ltd (OTCS) and signed an R&D partnership contract with Nokia Siemens Networks in Germany. The year 2008 saw Wipro’s foray into the clean energy business with Wipro Eco Energy.[44][45] In April 2011, Wipro signed an agreement with Science Applications International Corporation (SAIC) for the acquisition of their global oil and gas information technology practice of the commercial business services business unit.[46][47] The year 2012 saw Wipro make its 17th acquisition in IT business when it acquired Australian analytics product firm Promax Applications Group (PAG) for $35 million. Wipro is the No. 1 employer of H-1B visa professionals in the United States in 2012.
WIPRO GROUP OF COMPANIES
Wipro Ltd.
Wipro Limited is a global provider of comprehensive IT solutions and services, including Systems Integration, Consulting, Information Systems outsourcing, IT-enabled services, and R&D services.
It is also a value added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software for international brand
Wipro entered into the technology business in 1981 and has over 140,000 employees and clients across 54 countries today. IT revenues stood at $ 6.2 billion for the year ended 31 March 2013, with a repeat business ratio of over 95%.
The business model at Wipro Technologies Ltd is an industry aligned customer facing model which gives greater understanding of customers’ businesses to build industry specific solutions.
Wipro Enterprises Ltd.
Wipro Consumer Care & Lighting
Wipro Consumer Care and Lighting (WCCLG), a business unit of Wipro Limited operates in the FMCG segment offering a wide range of consumable commodities. Established in 1945, the first product to be introduced by WCCLG was vegetable oil, later popularised under the brand name "Sunflower Vanaspati". It offers personal care products, such as Wipro Baby Soft and Wipro Safewash, toilet soaps like Santoor and Chandrika as well as international brands like Yardley. Its portfolio of lighting solutions includes products like Smartlite CFL, LED, emergency lights and more.
Through its customer-centric products and acquisitions, Wipro Consumer Care and Lighting has become a fast growing company in the FMCG segment.
Wipro Infrastructure Engineering
Wipro Infrastructure Engineering is the hydraulics business division of Wipro Limited and has been in the business of manufacturing hydraulic cylinders, truck cylinders, and their components and solutions since 1976. This division delivers hydraulic cylinders to international OEMs and represents the Kawasaki, Sun Hydraulics and Teijin Seiki range of hydraulic products in India.[ It has entered into partnerships with companies like Kawasaki and aerospace giant EADS The commitment to quality has made Wipro Infrastructure Engineering the second largest independent manufacturer of cylinders in the world The company has recently ventured into water treatment systems and solutions to cater to the needs of various industries.
Wipro GE Medical Systems Limited
Wipro GE Medical Systems Limited is Wipro’s joint venture with GE Healthcare South Asia. It is engaged in the research and development of advanced solutions to cater to patient and customer needs in healthcare. This partnership, which began in 1990, oday includes offerings like gadgets and equipment for diagnostics, healthcare IT solutions and services to help healthcare professionals combat cancer, heart disease, and other ailments. There is complete adherence to Six Sigma quality standards in all products.
SUSTAINABILITY AT WIPRO
Wipro’s approach to sustainability is structured on enabling itself, as an organization, and its customers to be more ecologically sustainable. It is driven by issues considered important to employees, India current and future generations, customers, investors, suppliers, and the community as a whole. Wipro has been ranked 1st in the 2010 Asian Sustainability Rating (ASRTM) of Indian companies and is a member of the NASDAQ Global Sustainability Index as well as the Dow Jones Sustainability Index.
In November 2012 Guide to Greener Electronics, Greenpeace ranked Wipro first with a score of 7.1/10-
LISTING AND SHAREHOLDING
Listing: Wipro’s equity shares are listed on Bombay Stock Exchange where it is a constituent of the BSE SENSEX index and the National Stock Exchange of India where it is a constituent of the S&P CNX Nifty. The American Depositary Shares of the company are listed at the NYSE since October 2000.
Shareholding: On 30 September 2013, 73.51% of the equity shares of the company were owned by the promoters: Azim Premji, his family members, partnership firms in which he is a partner and Trusts formed by him/his family. The remaining 26.49% shares are owned by others.
Shareholders (as on 30-September-2013) Shareholding
Promoter group led by Azim Premji
73.51%
Foreign Institutional Investors (FII) 08.82%
Indian Public 05.31%
Bodies Corporate 03.89%
Mutual Funds/UTI
01.90%
NRI
01.04%
Trusts/Others
00.84%
American Depositary Shares
01.93%
Total 100.0%
EMPLOYEES
At the end of FY 2012-13, its employee strength was 134,541 of which 30% were women and 0.35% was persons with disabilities. Its global workforce consists of 98 nationalities working from 57 countries. Approx. 8.5% of its workforce is non-Indian. The average age of a Wipro employee is 29 years. The attrition rate for 2012-13 was 14.1%. During the same financial year, the company incurred 180 billion on employee benefit expenses.
AWARDS AND RECOGNITIONS
‘ In May 2013, it was ranked 812th on the Forbes Global 2000 list.
‘ Wipro was ranked 2nd in the Newsweek 2012 Global 500 Green companies.
‘ It was recognized by the Ethisphere Institute as one of the World’s Most Ethical (WME) Companies in 2013, for the second year in a row.
‘ Wipro received the ‘NASSCOM Corporate Award for Excellence in Diversity and Inclusion, 2012’, in the category ‘Most Effective Implementation of Practices & Technology for Persons with Disabilities’.
‘ In 2012, it was awarded the highest rating of Stakeholder Value and Corporate Rating 1 (SVG 1) by ICRA Limited.
‘ It received the award for excellence in Financial Reporting from Institute of Chartered Accountants of India in 2012.
‘ It received National award for excellence in Corporate Governance from the Institute of Company Secretaries of India during the year 2004.
HIGH TECHNOLOGY EXPORT [AMOUNT IN RUPPIES]
2009 2010 2011 2012
27,764,379,900 34,156,221,484 33,264,733,346 33,767,674,064
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SWOT ANALYSIS OF WIPRO LTD.
In this internal analysis usually SWOT analysis is used. It is an effective way to use this and will be easy to identify the company’s strength and weakness. The opportunity and threats we found in the external analysis will be matched here and the company’s core competencies also and will work on the improvement area.
Strengths:
‘ Global R&D facility ‘ Continuous Innovation: Wipro has global research and development facility. It keeps on innovating new products and services in order it remain its customer and to attract new client and shareholders in the market. Its global R&D is very strong strength for it.
‘ Vast clientele base: its large client base throughout the world gives strength for it. In these starting years it first headed into hardware business, and then it started providing software solutions to them then diversified as a company. The global clients of Wipro Technologies are always strength for it. The down turn in one economy can be pacified by performing well in other economy.
‘ High skilled employees across industries: Wipro’s one of the main strength is its highly skilled employees. The HR practices they follow are very much suitable and sustainable, where in IT industry the attrition is very high.
‘ Economies of scale ‘ Low cost advantage: As they have already had their domestic as well as their global clients. This is an advantage over all. The economies of scale can be achieved easily when compared to start ups. For example when they started the Wipro consulting company, it earned 2 crores within its first quarter of operations, because the client base is huge and the economies of scale are also high for it.
‘ Strong brand value: As Wipro Technologies is the 2nd largest IT end to end service provider in the world. It has attained its brand value. So customer will prefer Wipro technologies for its quality.
‘ Client satisfaction ‘ Quality products & delivery capabilities: Wipro ltd achieved all these all these because it’s continuous assured quality providing capacity and commitment. The clients are more satisfied with wipro.
‘ Alliances with top global companies ‘ GE. Cisco, EMC, Microsoft, Oracle and SAP: To be a global player, a company needs to have alliance with various other companies to provide on time service and delivery. Certainly it’s one of its main strength. The green office area ‘ an innovative thought, which benefits its business.
‘ Green thoughts: Eco friendly products: Where Wipro operates, the innovation keeps on gaining its own value among people. Its green thoughts like green IT that is reusable computer peripherals and less toxic material usage for its production are their strength. The green office area ‘ an innovative thought, which benefits its business.
‘ Customized products: It provides customized products for several industries like aerospace, Engineering Infrastructure, Medical equipment’s; Lighting solutions etc. are its strength.
Weakness:
‘ Low operating margin of the other group companies: Even though IT sector creates huge profits for Wipro Ltd, the other group companies like customer care and Lighting for only 9% for the total revenue. So a conglomerate company like Wipro will get affected if one its main sectors fail. There are other players who are especially in those same sectors who already excelled in that sector like HUL, ITC etc.
‘ Concentrating on mature markets: Domestic market is huge but is underdeveloped. If Wipro Technology considers capturing the remaining under developed rural areas like sub metros, it could have a very strong base in India and can improve its share and can be a No. 1 player in IT sector.
Opportunities:
‘ In the consultancy area and BPO area: As Wipro consultancy is in the list of top consultancies, it could achieve more with its vast client base. In BPO industry it is in 2nd top company in India. It could achieve to come to first place.
‘ Emerging technology: As it has skilled work force, it always have opportunity to come up with new technologies.
‘ Huge global market: As it is already a removed global company, it has a huge scope in global markets. The company has entered into the global market so now it’s the biggest opportunity available to the company.
‘ Huge potential in domestic market: it has potential to capture more market share in Indian it industry so it has both global and domestic to expand.
Threats:
‘ Increasing cost of human capital: As it is well known about IT and BPO industry, the attrition rate is always high. So hiring new people, training and development cost is also highly cost counting part in IT industry.
‘ Intense rivalry in it industry: The rivalry among Indian it industry is very high, because the entry barrier is very low. It needs a low investment cost to start an IT company.
‘ Environmental change: Changing Environmental conditions like economic meltdown and changing technology is a big threat to companies in IT industry. It will face fierce competition in the areas of e-business and ASP services. Slowdown in the banking, financial services and insurance (BFSI) sector.
‘ Exchange rate: This can be a threat to the company as the company is making profits due to the high exchange rate and if this rate comes down in future it can lead to a major problem for the company.
‘ Changing laws and Regulations: Government rules and regulation change may be threat for IT industry companies, exactly for Wipro Technologies, which relies more on overseas projects.
SRI LANKAN COMPANY
CEYNOCTA PVT. LTD.
Ceynocta (Pvt) Ltd is a Sri Lankan ICT BPO company with a blend of highly skilled professionals in web design and development, software development, mobile applications, open source CMS customization and ICT consultancy.
Ceynocta’s main focus is web applications development in open source technologies such as PHP, MySQL. Also the CMS customization and integration is another key area. Ceynocta’s experience in customization of Joomla, WordPress and Drupal will help customers to choose the right CMS for the requirements.
Mobile applications development is another area which Ceynocta is capable of and we develop WAP sites for mobile platforms and mobile applications for Android , Palm, Windows mobile, iPhone and other popular devices and platforms.
By outsourcing to Ceynocta, companies and individuals gain economic advantages while keeping up the high quality of the end product. We have a proven track record with overseas clients as a BPO company.
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SERVICES
Ceynocta offers a wide range of services with the use of latest technologies. By closely collaborating with our clients and understanding their needs we deliver high quality services in following areas:
‘ Web site design Web applications development
‘ E-Commerce applications Software development
‘ Content Management System Open source CMS customization
‘ Search engine optimization Mobile/WAP applications
‘ ERP solutions Kiosk applications
‘ Domain registration Email hosting
‘ Web hosting services Digital signage solutions
‘ Multimedia presentations Flash animations
‘ PSD to HTML: 1 day service Creative design services
‘ ICT consulting BPO services
Outsource to Sri Lanka: Ceynocta BPO Services
There are many reasons that companies outsource various jobs, but the most prominent advantage seems to be the fact that it often saves money. Outsourcing also allows companies to focus on other business issues while having the details taken care of by outside experts. This means that a large amount of resources and attention, which might fall on the shoulders of management professionals, can be used for more important, broader issues within the company Our offshore outsourcing services, based in Sri Lanka, will help to enable and empower your business.
Ceynocta’s BPO model includes short-term or long-term projects with partial or complete services, business analysis and specifications design, coding, testing and quality assurance, maintenance of systems developed by us or any other party and subcontracting services.
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Key Areas
‘ Web site design & development
‘ E-Commerce applications
‘ Software development
‘ Open source customization
‘ Search engine optimization
‘ Mobile/WAP applications
‘ Multimedia presentations
‘ Flash animations
‘ PSD to HTML: 1 day service
‘ Web hosting services
Benefits of doing business with Ceynocta Pvt. Ltd.
‘ Reduce overheads
‘ Free up resources
‘ Minimize capital expenditure
‘ Improve quality
‘ Access to a larger talent pool
‘ Time zone advantages
‘ Risk management
‘ Increased efficiency
‘ Tax benefits
‘ More leisure time ‘
Company Skills
Business Analysis, Design and development using Object Oriented Technologies, industry standard coding methodologies with use of application frameworks and design patterns are our core strengths.
Our domain knowledge lies heavily in open source technologies and Mobile/WAP applications, the Team-Ceynocta is small, but capable of handling any development project in following technologies:
Scripting Frameworks Programming
PHP
JSP
ASP.Net
JavaScript
VB Script Zend
Symfony
Kohana
Codeigniter
.NET Java
C#
C++
Visual Basic
VB.NET
Open source Mobile Designing
Joomla, Drupal, WordPress
phpBB, vBulletin,
OSCommerce, Magento
Sugar CRM, Vtiger,
ADempiere, Alfresco, WAP sites
Windows mobile
iPhone
J2ME
Palm OS Adobe Photoshop
Adobe Illustrator
Adobe InDesign
Corel Draw
Corel Photopaint
Multimedia Databases Web Services
Scala Digital Signage
Adobe Flash
Adobe Premiere
Adobe After Effects MySQL
PostGre SQL
MS SQL Server
Oracle XML-RPC
SOAP
WSDL
JSON
Web Servers Streaming Servers Platforms
Apache, IIS
Tomcat, JBoss Darwin
Helix Windows
Linux
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SWOT ANALYSIS OF Ceynocta Pvt. Ltd.
Strength
‘ To build software products of varied complexities, domains and technologies, including HTML5, .NET and JAVA.
‘ Well experienced in cloud and SaaS technologies and also help our customers.
‘ To mobilize the products in iOS, Android, Windows Mobile and hybrid platforms.
‘ Built up a set of reusable frameworks and components that accelerate software product development.
‘ Their employees are indeed their greatest asset and have best available talent in the industry and all of them are high achievers in their own right.
Weakness
‘ The social issues are observed focused on working in large teams, working in conjunction with multiple teams, and working with a large preexisting code base.
‘ A common weakness in IT firms is having employees who are highly skilled in the technical components of their jobs, but who lack the social or business skills that are needed to fully perform their duties.
Opportunity
‘ Reuse practices at low level design stage provides them to be more productive them to be more productive and cost effective ultimately allowing them to release software faster and better.
Threat
‘ Change in government rules and regulations.
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Market opportunities in ICT industry Sri Lanka
Sri Lanka is emerging as a global ICT destination of choice in number of key focus domain areas. Sri Lanka is ranked among the Top 50 Global Outsourcing destinations by AT Kearney and ranked among Top 20 Emerging Cities by Global Services Magazine.
The growing ICT industry in Colombo offers a unique advantage for Small and Medium Enterprises (SME) to enjoy premium access to a high quality talent pool, which is becoming increasingly challenging in large established destinations such as India and China. The environment is also highly conducive for establishing high-in-demand niche competency centers out of competition for even larger global services companies. Colombo has a well established road network with a quality supply of power, modern office facilities and a well developed set of support infrastructure services.
The modern international airport welcomes more than 20 international airlines with direct flights to many worldwide destinations weekly. There are over 140 flights per week to most cities in India. Most Indian cities are less than 2 hours away from Sri Lanka.
Sri Lanka offers a rapidly growing niche workforce which is highly adaptable, innovative, English speaking and loyal. Currently, over 60,000 are employed in the ICT industry in Colombo and the workforce is growing at over 20% year-on-year. The workforce is stable with very low attrition rates ranging from 10-15%. There are around 300 ICT companies are presently in operation in Sri Lanka. Annual exports of ICT sector is around 400 million US dollars in 2011.
Sri Lanka has an open market economy and is the first country in South Asia to liberalize its economy. Many global companies have been operating in Sri Lanka for decades. Tax holidays up to 5 years and concessionary rates of income tax 5-15% are also extended after the tax holiday period. Government also provides special assistance on real estate acquisition based on investment and employment generation potential.
As a modern trading nation, Sri Lanka, now exports more than 2,000 products to almost every country in the world. In addition, Sri Lanka has emerged as the most preferred ICT hub in the Asian region. And is the destination renowned for Best-Of-Breed in Global Market. Sri Lanka acts as an off-shore development center for several fortune 500 companies from the USA, Ireland, UK, Australia, etc and joint venture development center companies from Sweden, Norway, USA, Japan etc. Sri Lanka provides some ICT & BPO facilities for business entities that have set-up their operations in the island. These Companies include: HSBC, Industrial & Financial Systems (IFS), Amba Research, RR Donnelley, Quattro, Virtusa, eCollege, Eurocenter, Valista, Millennium Information Technology (owned by London Stock Exchange), and Innodata Isogen etc.
Sri Lanka offers ample recreational facilities within just 2 to 3 hours of driving from Colombo. Exquisite beaches, wild life sanctuaries, cultural heritage sites dating back to 500 B.C., beautiful hill country views, surfing, water sports, and exciting night life makes Sri Lanka a truly a tropical paradise to live and work in. Mixing business and pleasure has never been this easy for the discerning expatriate professionals or to the frequent business traveler.
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Driving Forces
Five powerful market forces are driving the new ICT market opportunities.
1. Plunging telecommunications costs and capacity constraints
The growth of offshore opportunities for software products and tele services is being driven by plunging costs in international telecommunications that make offshore labor cost advantages overwhelming. Until recently, the direct labor cost advantages of, for instance, call center and image processing operations, were offset by the incremental cost of international telecommunications. But Internet solutions for voice and data transmission have made it possible in open marketplaces to reduce costs by an order of magnitude or more over traditional circuit-switched providers. Consequently, pager and voice mail transcription and answering services, inbound and outbound telemarketing, customer service, and technical support centers are growing. India’s recent surge in exports of software and related services’to an estimated $8 billion in 2001’springs from openness to steep reductions in telecommunication costs and the introduction of telecommunication breakthroughs, such as systems that bypass the traditional monopoly of international networks. India’s software exporters are therefore able to compete in high-value markets that require continuous interaction with overseas partners and customers, as well as in traditional, highly structured, lower value programming, testing, and maintenance projects.
2. ‘Anytime, anywhere’ learning
How skills are acquired has changed fundamentally. Because of rapidly changing markets and technologies, companies must keep abreast of best practices. In response, new elearning systems that rapidly create and share online learning resources have emerged. Flexible and affordable systems let corporations and universities digitize their courses, workshops, seminars, and technical briefings almost as soon as they are delivered so students and practitioners can keep up with market conditions, skills, and technological change. These resources can be made available at low cost and as needed via CD-ROM, intranets, or the Internet. By enabling world-class skills to permeate throughout the ICT industry quickly and inexpensively, these ‘just-in-time’ training resources help level the playing field for entrepreneurs, faculty, and students in developing countries.
3. Reputation-based online markets
Outsourcing, once dominated by onshore and offshore firms, is now also occurring through new reputation-based online marketplaces that are especially suited to the competitive needs of small and new firms. For example, reverse-auction marketplaces such as Elance (www.elance.com) and Smarterwork.com are offering’at low or no entry cost’opportunities for hundreds of thousands of entrepreneurs to compete for service projects around the world. In these new forums, buyers and sellers meet to contract for projects ranging from secretarial services and data entry to highly sophisticated web design and database projects. These projects tend to be small’ranging from $100 to $10,000’but have already aggregated to more than $80 million over the past 18 months in the case of Elance.com, one of dozens of online marketplaces. Contracting, arbitration, and payment are all handled online. Bidders from developing countries enjoy a strong advantage in these marketplaces, given that the venue favors highly competitive bids. The new markets have also adopted reputation-building systems in which all parties to a transaction post feedback on their experiences. When they satisfy their initial clients, offshore producers gain powerful reputation points and visible client references that can give them a sustained competitive advantage.
4. Online workflow systems
Innovations in ‘virtual’ team management are also driving growth in offshore opportunities. As their role in the delivery of knowledge-based services continues to grow, small and new entrepreneurs are finding that the quality of project management, or workflow, is critical to success. Workflow systems to manage project teams across time zones and national boundaries have emerged; and free and low-cost web-based tools for online meetings, project scheduling, task assignment, and tracking are making it possible for small groups to cooperate effectively. Large companies have turned to workflow solutions built upon Lotus Notes, Microsoft Exchange, Groove.net, and other powerful coordination and communications tools. In most instances, these tools enable round-the-clock work on sophisticated projects, with responsibilities shifting to affiliated production centers in step with their respective workdays. Such tools afford a competitive advantage’speed to market’to those who source knowledge based services globally and coordinate production through online systems.
5. Talent in ICT Diasporas
Offshore sourcing of software and teleservices is being driven by the experience, relationships, and (increasingly) investments by nationals who have succeeded in ICT related professions and ventures overseas. India, for example, has hundreds of thousands of programmers, technicians, and others employed in international companies or overseas business ventures relating to information technologies. In many cases, they have brought their knowledge, contacts, and capital back to India to help launch companies into global markets for software and teleservices. Sri Lanka’s estimated talent base of 10,000 IT specialists now living overseas can play a similar role.
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NORMS AND POLICY
REULES AND REGULATIONS
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Computer software-Export Policy of India
6D1. Declaration of Software Exports
Export of software is undertaken in physical form. i.e. software prepared on magnetic tapes and paper media as well as in non physical form. i.e. direct transmission abroad through dedicated earth stations/ satellite links. As far as export of software in physical form is concerned the procedure relating to declaration of shipment on GR/PP forms, handling of exports documents by authorized dealers and other allied matters is the same as applicable to export of others goods. Export of software, in non physical form including video/tv software and all other types of software products/ packages, should be declared on SOFTEX form. Each set of SOFTEX forms comprises three copies marked original. Duplicate and triplicate which carry an identical pre-printed serial number. All the three forms in eah set should be completed and the entire set submitted for the purpose of valuation together with relevant documents to the officials of Department of Electronics, Government of India.
6D.2 Valuation of Software Exports/Certification of SOFTEX form
The valuation of exports declared on SOFTEX form will be done by the designated official/s of the Department of Electronics (DOE) at the Software Technology Parks of India (STPI). The SOFTEX form of exporters located outside STPI as also forms in respect of export of video/TV software will also be certified by designated official/s at the nearest STPI. DOE have made necessary arrangement for certification/valuation of the Video/TV software declared on SOFTEX form with the Ministry of Information and Broadcasting, Government of India, once in a week at the STPI. The valuation of exports declared on SOFTEX form by Units located in Export Processing Zones will be done by the designated authority of the Export Processing Zone.
6D.3 Disposal of SOFTEX forms
(i) After certifying all the three copies of the SOFTEX form, the designated officials of Government of India at STPI and designated authorities of Export Processing Zones will forward the original directly to the nearest office of the Exchange Control Department of Reserve Bank the day it is received or the next day and return the duplicate to the exporter. The triplicate will be retained by the Department of Electronics for their record.
(ii) Within 21 days form the date of certification of the SOFTEX form, the exporter should submit the duplicate copy together with a copy of each of the supporting documents to the authorised dealer for negotiation/collection. The duplicate copy of the form together with documents will be retained by the authorised dealer till full export value declared on the form or as certified by the designated officials at STPI, whichever is higher has been realised and repatriated to India and thereafter will be submitted to the Reserve Bank duly certified under cover of an appropriate R Return along with a copy/ies of invoice/s.
(iii) After the documents have been negotiated/sent for collection, authorised dealers should report the transaction to Reserve Bank in a fortnightly statement in form ENC under the cover of appropriate R Return. Entries in the ENC statement should be made in chronological order of the transactions as recorded in the internal register (Export Bills Register) of the authorised dealer.
6D.4 Terms of payment – Invoicing
(i) In respect of long duration contracts involving series of transmissions, the exporter should bill their overseas clients periodically, i.e. at least once a month, or on reaching the ‘milestone’ as provided in the contract entered into with the overseas client and the last invoice/bill should be raised not later than 15 days form the date of completion of the contract. It would be in order for the exporters to submit a combined SOFTEX form for all the invoices raised on a particular overseas client, including advance remittances received in a month.
(ii) In respect of contracts involving only ‘one shot operation’, the invoice/bill should be raised within 15 days from the date of transmission.
(iii) The exporter should submit SOFTEX form to the concerned official of Government of India at STPI for valuation/certification not later than 30 days from the date of invoice/the date of last invoice raised in a month, as indicated above.
(iv) The invoices raised on overseas clients as at (i) to (iii) above will be subject to valuation of export value declared on SOFTEX form by the designated official of Government of India (cf. paragraph 6D.2 above) and consequent amendment made in the invoice value, if necessary.
6D.5 Time limit for realization of export value
The full value of the software exported as declared on the SOFTEX form or as certified by the official of Government of India at STPI, whichever is higher should be repatriated to India on due date of payment or within 180 days from the date of invoice, whichever is earlier in the manner prescribed in Rule 9 of the Foreign Exchange Regulation Rules, 1974.
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Computer Software Import Rules of India
Notification No. 96/93-Customs
In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in the Table below (hereinafter referred to as the ‘goods’) when imported into India or procured from a Public Warehouse or Private Warehouse appointed or licensed, as the case may be, under section 57 or section 58 of the said Customs Act, for the purposes of manufacture and development of electronics hardware, or electronics hardware and software in an integrated manner, by the Electronics Hardware Technology Park units under the 100 per cent export-oriented scheme, approved in this behalf by the Inter-Mirdsterial Standing Committee (hereinafter referred to as the ‘Committee’) appointed by notification of the Government of India in the Department of Industrial Development S. 0. No. 117(E) dated the 22nd February, 1993 (as amended), from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty, if any, leviable thereon under section 3 of the second mentioned Act, subject to the following conditions, namely :-
(1) the importer has been granted necessary approval by the Committee for the import of goods for the said purposes;
(2) the importer carries out the manufacture or development or both of the electronics hardware or software under customs bond and subject to such other conditions, as may be specified by the [Assistant Commissioner of Customs or Deputy Commissioner of Customs], in this behalf;
(3) the importer.exports out of India hundred per cent, or such other percentage, as may be fixed by the Committee, of electronics hardware or software manufactured wholly or partly from the goods for the period stipulated by the Committee or such extended period, as may be specified by the Committee.
Provided that all such exports are made against freely convertible foreign currency;
(4) Omitted;
(5) the importer agrees, ‘
(a) to bring the goods into the unit and use them within the unit in connection with the manufacture or development or both of electronics hardware or software for export;
(b) not to move the goods from the unit without the approval of the [Assistant Commissioner of Customs or Deputy Commissioner of Customs];
(c) to export out of India all electronics hardware or software manufactured in the unit;
(6) the importer shall produce a certificate to the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] from the designated officer, to the effect that the goods imported are to be installed or used in the unit and that the import of such goods has been authorised by the Committee;
(7) without prejudice to any other provisions contained in this notification, the Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, subject to such conditions and limitations as he may deem fit to impose under the circumstances of the case for the proper safeguard of the revenue interest and also subject to such permission of the designated officer or the Committee where it is exclusively required under Export and Import Policy, allow the said unit to clear any of the said goods for being taken to any other place in India in accordance with the Export and Import Policy, –
(a) such clearance of capital goods, material handling equipments, office equipments and captive power plants may be allowed on payment of an amount equal to the customs duty leviable on such goods on the depreciated value thereof and at the rate in force on the date of payment of such duty.
(b) such clearance of goods (including containers, suitable for repeated use) other than those specified in clause (a) may be allowed on payment of customs duty on the value at the time of import and at rates in force on the date of payment of such customs duty;
(c) such clearance of used packing materials such as cardboard boxes, polythelene bags of a kind unsuitable for repeated use may be allowed without payment of any customs duty,Provided that the importer shall not be eligible to avail of the exemption applicable to goods falling under heading number 98.01 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), or the exemption available to the imported goods under any Export Promotion scheme other than the Export Promotion Capital Goods scheme permitting import of capital goods at the rate of duty of 5% ad valorem in terms of notifications in force at the time of debonding.
Explanation. – The depreciation in respect of goods covered by clause (a) above shall be allowed for the period from the date of commencement of commercial production of the unit or where such goods have been imported after such commencement from the date such goods have come into use for commercial production upto the date of payment of duty.
(8) the importer executes a bond in such form and for such sum and with such authority, as may be prescribed by the [Assistant Commissioner of Customs or Deputy Commissioner of Customs], binding himself to fulfil the export obligations and conditions under this notification, conditions under the Export and Import Policy and to pay on demand an amount equal to the duty leviable on the goods and interest at the rate of 20% per annum on the said duty from the date of duty free importation or procurement of the said goods till the date of payment of such duty if –
(i) in the case of capital goods, such goods are not proved to the satisfaction of the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] to have been installed or otherwise used within the bonded premises or re-exported within a period of one year from the date of importation or procurement thereof or within such extended period not exceeding five years as the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, on being satisfied mat there is sufficient cause for not using them as above within the said period, allow;
(ii) in the case of goods other than capital goods such goods are not proved to the satisfaction of the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] to have been used in connection with the production or packaging of goods for export out of India or re-exported within a period of one year from the date of importation or procurement thereof or within such extended period as the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow;
(iii) in the case of –
(a) goods produced or packaged, such goods have not been exported out of India, and
(b) unused goods (including container suitable for repeated use) as have not been exported, within a period of one year from the date of importation, or procurement of such goods or within such extended period as the Assistant Commissioner of Customs may, on being satisfied that there is sufficient cause for not exporting such goods within the said period, allow;
(iv) in the case of raw materials, components, spares and consumables (other than capital goods) imported or procured duty free, the unit fails to achieve Net Foreign Exchange Earning as a Percentage of Exports (NFEP) and Export Performance (EP) as specified in Appendix-1 of the Export and Import Policy, within one year of importation or procurement of such goods or within such extended period, not exceeding one year, as the Assistant Commissioner of Customs or Deputy Commissioner of Customs] may on being satisfied that there is sufficient cause allow.
Provided that the Commissioner of Customs may extend the period for achievement of Net Foreign Exchange as a Percentage of Exports (NFEP) or Export Performance (EP) for further period not exceeding five years from the date of importation or procurement;
(9) Omitted;
(10) the procedure, as may be prescribed by the Commissioner of Customs, is followed by such unit;
(11) the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, subject to such conditions and limitations as may be stipulated in the Export and Import Policy and those as may be specified by him in this behalf permit the goods imported or procured by the unit or goods partially processed or manufactured or packaged therefrom to be taken outside the unit without payment of duty for the purposes of test, repairs refining, processing, display, jobwork or any other process necessary for manufacture of final products and to be returned to the said unit thereafter or remove the same without payment of duty under bond for export from the jobworker’s premises;
Provided that the waste or scrap or remnants generated during such processes at the jobworker’s premises is either returned to the unit or is cleared on payment of duty as if the said waste or scrap or remnants have been cleared by the said unit;
(11A) the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, permit to remove moulds, jigs, tools, fixtures, tackles, instruments, hangers and patterns and drawings to the premises of sub-contractors subject to the condition that these goods shall be brought back to the bonded premises of Electronics Hardware Technology Park unit on completion of the job work, within a stipulated period;
(12) the Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, allow the supply or transfer of goods imported by a unit or electronic hardware or software manufactured by such a unit to any other hundred per cent export oriented undertaking or to a unit in the Free Trade Zone/Export Processing Zone for the purposes of manufacture and export or for use within the said unit as per procedure specified by him in this regard and necessary permission granted by the Committee;
(13) the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, subject to such conditions as he may deem fit to impose under the circumstances of the case for the proper safeguard of the revenue interest, allow a unit to re-export goods;
(14) Omitted;
(15) notwithstanding anything contained in this notification, the exemption contained herein shall also apply to,
(a) goods which on importation into India are used for the manufacture or development of electronics hardware or software within the unit and such hardware or software (including rejects, waste and scrap material arising in the course of manufacture and development of such hardware or software), even if not exported out of India, are allowed to be sold in India, under and in accordance with the Export and Import Policy and in such quantity and subject to such limitations and conditions as may be specified in this behalf by the Committee, on payment of duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944) or where such hardware or software (including rejects, waste and scrap material arising in the course of manufacture and development of such hardware or software) are not excisable, customs duty equal in amount to that leviable on the inputs obtained under this notification and used for the purpose of manufacture or development of such hardware or software (including rejects, waste and scrap material arising in the course of manufacture and development of such electronic hardware or software), which would have been paid, but for the exemption under this notification, shall be payable at the time of clearance of such electronic hardware or software (including rejects, waste and scrap material arising in the course of manufacture and development of such hardware or software);
(b) spares and consumables other than
those specified in the Table, to the extent of 1.5% of the ex-factory value of manufacture of articles for export out of India by the unit during the preceding year or such percentage in excess thereof as the Central Government may, in each individual case, allow having regard to the recommendations made to it in this behalf by the Committee for the purpose of supply of such spares and consumables with the export articles for after-sale service, subject to the condition that such supply is specifically stipulated in the relevant export contract and the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] is satisfied that the value of such spares and consumables have been included for arriving at the value addition as required under the said Export and Import Policy.
Provided that sale of software within India shall be allowed through data communication link or telecommunication link subject to such conditions as may be specified by the Commissioner of Customs.
(c) goods which on importation or procurement are used for the manufacture or development of Electronics Hardware or Software, within the unit and such hardware or software even if not exported out of India, are allowed to be cleared to the warehouses appointed or registered under notification of the Government of India in the Ministry of Finance Number 26/98-Central Excise (N.T.), dated the 15th July, 1998, or cleared to the warehouses authourise to carry out manufacturing process or other oprations under section 65 of the Customs Act, 1962 (52 of 1962) and under the Manufacture and Other Operations in Warehouse Regulation 1966 or cleared, on licence holders referred to in clause (e) of paragraph 9.10 of the Export and Import Policy, without payment of duty;
(16) Subject to the satisfaction of [Assistant Commissioner of Customs or Deputy Commissioner of Customs], duty shall not be leviable in respect of –
(i) the said goods used for imparting training to workers;
(ii) the said goods or goods manufactured, produced, processed or packaged in the unit if such goods are destroyed within the unit;
(iii) the scrap or waste material or remnants (arising in the course of such production, manufacture, processing or packing)if such scrap or raw material or remnants are destroyed within the unit.
(iv) the capital goods, if such capital goods are destroyed within the unit or outside the said unit where it is not possible or permissible to destroy the same within the said unit, in the presence of custom officer";
(17) The Assistant Commissioner of Customs or Deputy Commissoner of Customs may, subject to such conditions or limitations as Inter-Ministerial Standing Committee, permit the goods imported or procured by the unit or goods partially processed or manufactured or packaged there from to be taken out of India for the purpose of processing if such processing is not available in India, without payment of duty, and to be returned to the said unit thereafter.
2. without prejudice to other provisions of this notification, where the Assistant Commissioner or Deputy Commissioner of Customs is satisfied that the unit, which has been permitted by the concerned State Electricity Board in this behalf, has been permitted by Development Commissioner to sell into Domestic Tariff Area (DTA) or transfer to other hundred per cent. export oriented undertaking or units in Export Processing Zone or Software Technology Park or Electronic Hardware Technology Park or Special Economic Zone, the surplus power generated in its diesel generating sets or captive power plant subject to fulfilment of such conditions as may be specified by the Assistant Commissioner or Deputy Commissioner of Customs on this behalf, the Assistant Commissioner or Deputy Commissioner of Customs may allow the unit-
(i) to sell such surplus power in Domestic Tariff Area on payment of an amount equal to the duty leviable on consumables and raw materials but for the exemption of duty thereon, used for generation of each unit of power so sold in the Domestic Tariff Area on the basis of norms approved by the Board of Approvals appointed by the notification of the Government of India in the Ministry of Commerce and Industry, Department of Commerce, number 14/1/2001-EPZ dated 7th August, 2001;
(ii) to transfer such surplus power to other hundred per cent. export oriented undertaking or unit in Export Processing Zone or Software Technology Park or Electronic Hardware Technology Park or Special Economic Zone without payment of duty:
Provided that both supplying and receiving unit shall maintain account for the quantity of consumables and raw materials used in generation of each unit of power so transferred as quantified on the basis of norms approved by the said Board of Approval, for the purpose of calculation of Net Foreign Exchange earning as a Percentage of Export.".
Explanation. – For the purposes of this notification,
(a) "designated officer" means an officer designated by the Department of Electronics in pursuance of the notification of the Government of India in the Ministry of Commerce No. 42(N-8)/92-97, dated the 14th September, 1992;
(b) Export and Import Policy means Export and Import Policy 1 April, 1997 – 31 March, 2002, published by the Government of India under Ministry of Commerce Notification No. 1/1997-2002, dated 31st March, 1997 as amended from time to time
http://www.cbec.gov.in/customs/cs-act/notifications/notfns-before2k/cs96-93.htm
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INFORMATION TECHNOLOGY RULES
Internet intermediary law in India is incorporated in the Information Technology Act 2000 (IT Act 2000) and the Rules made there under. Internet intermediaries’ liability in India is now well established and foreign companies and websites must duly comply with the same to avoid civil, criminal, administrative and financial penalties. In short, these foreign companies and their Indian subsidiaries must ensure that they comply with the cyber law due diligence in India.
The Gazette Notification numbered G.S.R. 314(E), dated 11-04-2011, formulated the Information Technology (Intermediaries Guidelines) Rules, 2011 of India. These rules provide the rights and responsibilities of internet intermediaries in India. If the Internet intermediaries follow these rules and exercise proper cyber due diligence, they are entitled to a ‘safe harbor protection’. Otherwise, they are liable for various acts or omission occurring at their respective platforms once the matter has been brought to their notice.
The legal actions against foreign websites can be taken in India. Further, cyber litigations against such foreign websites would increase in India in the near future. It is of utmost importance for these foreign companies and websites to follow Indian laws in true letter and spirit.
Perry4Law and Perry4Law Techno Legal Base (PTLB) are providing the legal position regarding Internet intermediary liability in India under the IT Act 2000 in general and Information Technology (Intermediaries Guidelines) Rules, 2011 of India in particular. The salient features of the same are as follows:
(1) The Information Technology (Intermediaries Guidelines) Rules, 2011 of India have been formulated by the Central Government in exercise of its powers conferred by clause (zg) of subsection (2) of section 87 read with sub-section (2) of section 79 of the Information Technology Act, 2000 (21 of 2000).
(2) Definitions ‘ (1) In these rules, unless the context otherwise requires,’
(a) ‘Act’ means the Information Technology Act, 2000 (21 of 2000);
(b) ‘Communication link’ means a connection between a hyperlink or graphical element (button, drawing, image) and one or more such items in the same or different electronic document wherein upon clicking on a hyperlinked item, the user is automatically transferred to the other end of the hyperlink which could be another document website or graphical element.
(c) ‘Computer resource’ means computer resources as defined in clause (k) of sub-section (1) of section 2 of the Act;
(d) ‘Cyber security incident’ means any real or suspected adverse event in relation to cyber security that violates an explicitly or implicitly applicable security policy resulting in unauthorized access, denial of service or disruption, unauthorized use of a computer resource for processing or storage of information or changes to data, information without authorization;
(e) ‘Data’ means data as defined in clause (o) of sub-section (1) of section 2 of the Act;
(f) ‘Electronic Signature’ means electronic signature as defined in clause (ta) of sub- section (1) of section 2 of the Act;
(g) ‘Indian Computer Emergency Response Team’ means the Indian Computer Emergency Response Team appointed under sub section (1) section 70 (B) of the Act;
(h) ‘Information’ means information as defined in clause (v) of sub-section (1) of section 2 of the Act;
(i) ‘Intermediary’ means an intermediary as defined in clause (w) of sub-section (1) of section 2 of the Act;
(j) ‘User’ means any person who access or avail any computer resource of intermediary for the purpose of hosting, publishing, sharing, transacting, displaying or uploading information or views and includes other persons jointly participating in using the computer resource of an intermediary.
(2) All other words and expressions used and not defined in these rules but defined in the Act shall have the meanings respectively assigned to them in the Act.
(3) Due diligence to be observed by intermediary ‘ The intermediary shall observe following due diligence while discharging his duties, namely: ‘
(1) The intermediary shall publish the rules and regulations, privacy policy and user agreement for access-or usage of the intermediary’s computer resource by any person.
(2) Such rules and regulations, terms and conditions or user agreement shall inform the users of computer resource not to host, display, upload, modify, publish, transmit, update or share any information that ‘
(a) Belongs to another person and to which the user does not have any right to;
(b) Is grossly harmful, harassing, blasphemous defamatory, obscene, pornographic, pedophilic, libelous, invasive of another’s privacy, hateful, or racially, ethnically objectionable, disparaging, relating or encouraging money laundering or gambling, or otherwise unlawful in any manner whatever;
(c) Harm minors in any way;
(d) Infringes any patent, trademark, copyright or other proprietary rights;
(e) Violates any law for the time being in force;
(f) Deceives or misleads the addressee about the origin of such messages or communicates any information which is grossly offensive or menacing in nature;
(g) Impersonate another person;
(h) Contains software viruses or any other computer code, files or programs designed to interrupt, destroy or limit the functionality of any computer resource;
(i) Threatens the unity, integrity, defense, security or sovereignty of India, friendly relations with foreign states, or public order or causes incitement to the commission of any cognizable offence or prevents investigation of any offence or is insulting any other nation
(3) The intermediary shall not knowingly host or publish any information or shall not initiate the transmission, select the receiver of transmission, and select or modify the information contained in the transmission as specified in sub-rule (2):
Provided that the following actions by an intermediary shall not amount to hosing, publishing, editing or storing of any such information as specified in sub-rule: (2) ‘
(a) Temporary or transient or intermediate storage of information automatically within the computer resource as an intrinsic feature of such computer resource, involving no exercise of any human editorial control, for onward transmission or communication to another computer resource;
(b) Removal of access to any information, data or communication link by an intermediary after such information, data or communication link comes to the actual knowledge of a person authorized by the intermediary pursuant to any order or direction as per the provisions of the Act;
(4) The intermediary, on whose computer system the information is stored or hosted or published, upon obtaining knowledge by itself or been brought to actual knowledge by an affected person in writing or through email signed with electronic signature about any such information as mentioned in sub-rule (2) above, shall act within thirty six (36) hours and where applicable, work with user or owner of such information to disable such information that is in contravention of sub-rule (2). Further the intermediary shall preserve such information and associated records for at least ninety days for investigation purposes,
(5) The Intermediary shall inform its users that in case of non-compliance with rules and regulations, user agreement and privacy policy for access or usage of intermediary computer resource, the Intermediary has the right to immediately terminate the access or usage rights of the users to the computer resource of Intermediary and remove non-compliant information.
(6) The intermediary shall strictly follow the provisions of the Act or any other laws for the time being in force.
(7) When required by lawful order, the intermediary shall provide information or any such assistance to Government Agencies who are lawfully authorised for investigative, protective, cyber security activity. The information or any such assistance shall be provided for the purpose of verification of identity, or for prevention, detection, investigation, prosecution, cyber security incidents and punishment of offences under any law for the time being in force, on a request in writing staling clearly the purpose of seeking such information or any such assistance.
(8) The intermediary shall take all reasonable measures to secure its computer resource and information contained therein following the reasonable security practices and procedures as prescribed in the Information Technology (Reasonable security practices and procedures and sensitive personal Information) Rules, 2011.
(9) The intermediary shall report cyber security incidents and also share cyber security incidents related information with the Indian Computer Emergency Response Team.
(10) The intermediary shall not knowingly deploy or install or modify the technical configuration of computer resource or become party to any such act which may change or has the potential to change the normal course of operation of the computer resource than what it is supposed to ‘perform thereby circumventing any law for the time being in force:
Provided that the intermediary may develop, produce, distribute or employ technological means for the sole purpose of performing the acts of securing the computer resource and information contained therein.
(11) The intermediary shall publish on its website the name of the Grievance Officer and his contact details as well as mechanism by which users or any victim who suffers as a result of access or usage of computer resource by any person in violation of rule 3 can notify their complaints against such access or usage of computer resource of the intermediary or other matters pertaining to the computer resources made available by it. The Grievance Officer shall redress the complaints within one month from the date of receipt of complaint.
The cyber laws due diligence requirements for companies in India are strenuous in nature and Internet intermediaries in India need to take care of the same to avoid legal troubles.
Industrial Approval Policy
The major highlights of Industrial Approval Policy include the following:
Industrial Licensing has been virtually abolished in the Electronics and Information Technology sector except for manufacturing electronic aerospace and defence equipment.
There is no reservation for public sector enterprises in the Electronics and Information Technology industry and private sector investment is welcome in every area.
Electronics and Information Technology industry can be set up anywhere in the country, subject to clearance from the authorities responsible for control of environmental pollution and local zoning and land use regulations.
Large Industries (where investment in plant and machinery is more than Rs.10 crores) and exempted from licensing are only required to file information in the prescribed Industrial Entrepreneurs’ Memorandum (IEM) with the Secretariat for Industrial Assistance (SIA), Department of Industrial Policy and Promotion, Ministry of Commerce & Industry, Government of India and obtain an acknowledgement. Immediately after the commencement of commercial production, Part B of the IEM has to be filed. No further approval is required. Forms can be downloaded from the website of the Department of Industrial Policy and Promotion, Ministry of Commerce & Industry (http://dipp.gov.in).
Small Scale Industries (where investment in plant and machinery is more than Rs.25 lakh but less than Rs.5 crores) and Medium Industries (where investment in plant and machinery is more than Rs.5 crores but less than Rs. 10 crores are required to register with the District Industries Centre (DIC).
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Foreign Investment Policy
India welcomes investors in Electronics and IT sector. Government of India is striving to bring greater transparency in policies and procedures to provide an investor friendly platform.
A foreign company can start operations in India by registration of its company under the Indian Companies Act 1956. Foreign equity in such Indian companies can be upto 100%. At the time of registration it is necessary to have project details, local partner (if any), structure of the company, its management structure and shareholding pattern.
A joint venture entails the advantages of established contracts, financial support and distribution-marketing network of the Indian partner. Approval of foreign investments is through either automatic route or Government approval.
Government of India facilitates Foreign Direct Investment (FDI) and investment from Non-Resident Indians (NRIs) including Overseas Corporate Bodies (OCBs), predominantly owned by them to complement and supplement domestic investment. Foreign technology induction is encouraged both through FDI and through foreign technology collaboration agreement. Foreign Direct Investment and Foreign technology collaboration agreements can be approved either through the automatic route under powers delegated to the Reserve Bank of India (RBI) or otherwise by the Government
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Foreign Trade Policy
‘ In general, all Electronics and IT products are freely importable, with the exception of some defense related items. All Electronics and IT products, in general, are freely exportable, with the exception of a small negative list which includes items such as high power microwave tubes, high end super computer and data processing security equipment.
‘ Second hand capital goods are freely importable.
‘ Zero duty Export Promotion Capital Goods scheme (EPCG) which allows import of capital goods at zero% customs duty is available to exporters of electronic products. The export obligation under EPCG Scheme can also be fulfilled by the supply of Information Technology Agreement (ITA-1) items to the DTA provided the realization is in free foreign exchange.
‘ Special Economic Zones (SEZs) are being set up to enable hassle free manufacturing and trading for export purposes. Sales from Domestic Tariff Area (DTA) to SEZs are being treated as physical export. This entitles domestic suppliers to Drawback/ DEPB benefits, CST exemption and Service Tax exemption.
‘ Supplies of Information Technology Agreement (ITA-1) items and notified zero duty telecom/electronic items in the Domestic Tariff Area (DTA) by EOU/EHTP/STP/SEZ units are counted for the purpose of fulfillment of positive Net Foreign Exchange Earnings (NFE).
‘ The import of second hand computers including personal computers/ laptops and refurbished/reconditioned spares are restricted for import. However, second hand computers, laptops and computer peripherals including printer, plotter, scanner, monitor, keyboard and storage units can be imported freely as donations by the following category of donees, subject to the condition that the goods shall not be used for any commercial purpose and are non-transferable
‘ Schools run by Central or State Government or a local body
‘ Educational Institution running on non-commercial basis by any organization
‘ Registered Charitable Hospital
‘ Public Library’
Global Strategy Problem of SRILANKA
Problematic Areas
While the aggregate figures resulting from the ILFTA are impressive, the full potential of the FTA has not been reaped by Sri Lanka. The key question, in terms of moving forward and for lessons for the future is: why hasn’t there been a greater positive impact on the Sri Lankan economy as a result of the ILFTA? Several reasons have been identified.
First, intra-industry trade between the two countries did not grow significantly to stimulate overall trade between the two countries. Abeyratne (2013) finds that Sri Lankan manufacturers have not been successful in linking up with Indian supply chains and this supports the earlier findings of de Mel and Jayaratne (2012) that vertical integration of Sri Lankan industries with Indian industries is at a very low level. The explanation for this could be found in the level of industrialization in India compared to that of the ASEAN region. Abeyratne (2013) argues that the level of industrialization is less sophisticated to encourage large-scale supply chains developing with regional suppliers. It may be noted in this context that India made a shift from agriculture to industrialization, but before the level of industrialization deepened, India made a rapid shift toward the service sector surpassing the shift to services in many other developing countries.
Second, there were a number of impediments for market access in the Indian market. Some of them are highlighted below.
Tariff rate quotas on major exports
Tea, ready-made garments, and textiles, which make up 50% of Sri Lanka’s total exports, were placed under quotas in the ILFTA. Also, quota utilization has been minimal due to stringent ROO requirements and port restrictions. Quota utilization has ADBI Working Paper 458 Kelegama 10
somewhat improved at present following a degree of relaxation of ROO and port restrictions in 2007.6
Sri Lankan ready-made garment exports to India were negligible even after the FTA. Ready-made garments were granted preferential market access of 50% for 8 million pieces per year while textiles were granted a preferential margin of 25% with no quantitative restrictions. Out of the 8 million pieces, 3 million were required to have Indian fabrics as per the ROO. While this condition remained until the end of 2012, the 8 million pieces were made duty free in 2006. The quota utilization for the 5 million pieces was 10%’15% while for the 3 million pieces it was 100% as Sri Lankan ready-made garment exports with Indian fabrics were not competitive in the Indian market. In 2013, the Indian fabrics usage conditionality was completely removed.
Non-tariff barriers
Many Sri Lankan exporters have faced difficulties in entering the Indian market due to the maintenance of non-tariff barriers (NTBs) such as state taxes, quality requirements, and administrative procedures, which are outside the scope of tariff reduction under the FTA. One example is state taxes charged by Tamil Nadu, where Sri Lankan exporters are taxed at 21% while local products are taxed at 10.5% on sales (Kelegama and Mukherji 2007).
Rules of origin
Besides the stringent ROO within the tariff rate quotas (TRQs) for ready-made garments, the more general case of requiring a change of tariff heading (CTH) at the four-digit level has been burdensome for certain Sri Lankan exports. This rule has had a detrimental effect on Sri Lanka’s blended tea exports where a CTH at the four-digit level is difficult to achieve even when blended with Indian tea.
Unilateral imposition of quotas
Following the surge of vanaspati imports from Sri Lanka to India, the two countries entered into negotiations in 2006 to apply a quota on vanaspati exports due to the disruptions caused to the Indian domestic industry. The two countries initially agreed to a quota of 250,000 metric tons per year. However, in 2006 India unilaterally reduced this quota to 100,000 metric tons and canalized all vanaspati imports from Sri Lanka through national procurement agency.7Further negotiations took place and the quota .
A rough estimate shows that if all exports of Sri Lanka go to India it would have amounted to 2% of India’s overall imports; and in this context, India removing more of the NTBs to Sri Lankan exports should not be an issue. However, given the concentration of production and the federal state structure in India, the issue of restriction removal becomes more complicated. For instance, The state of Kerala accounts for 92% of Indian pepper exports, 74% of cardamom exports, and 63% of ginger exports among others, and accounts for 67.5% of total spice exports from India.
(Ahmed and Jena 2012) It is reported that the ILFTA contributed to the depression of pepper prices in the Kerala market that led to lot of hue and cry among local producers in Kerala. In 2006, the Indian Pepper Spices Trade Association pressurized the central government to impose quota restrictions on Sri Lankan pepper imports.8Accordingly, the central government imposed an annual import cap of 2,500 tons on Sri Lankan pepper imports and designated one port, Kochi, for such imports in order to monitor quantity and quality of such imports as there were allegations that third-country pepper was coming to India via Sri Lanka through the FTA.
WINNING STRATEGIES FOR THE WIPRO
1. THE SUSTAINABILITY MOBIUS
The problems of sustainable development have emerged prominently onto the centre stage only in the second half of the 20th century when the world began to understand and grapple with the multi-fold outcomes of rapid industrialization and technology infused modernization.
‘ The Climate Change Crisis
The recently concluded COP 17 at Durban on climate change seemed to provide some hope of a solution to the impasse on the Kyoto Protocol. However, the deeper concern is that after more than ten years of the Kyoto Protocol, Annex I ‘ developed countries ‘ are nowhere near their GHG emission reduction targets.
‘ Sustainable Cities
With more than 50% of the world’s population living in cities today and with another 1.2 billion people set to join the ranks of city dwellers by 2025, cities are often power centers in their own right.
Cities are held to be crucibles of innovation, diversity and wealth creation; at the same time, they are responsible for a disproportionate share of resource consumption, air and water pollution and for destroying natural ecosystems
‘ Universal Education
That education is the most powerful force multiplier in the vision of a just, humane and sustainable society is almost axiomatic. It is one of the eight U.N. MDGs and high on the priorities of most governments – and yet achieving universal education has proven to be an elusive goal for many developing countries.
With nearly 35% of children in Class 5 in India not able to read or write, we clearly have a long path ahead.
‘ Diversity, Inclusivity and Human Rights
Social historians have long held the view that diversity and pluralism engender innovation Closely linked to diversity are the twin issues of Inclusivity and Human Rights ‘ eliminating discrimination on any ground and including disadvantaged minorities in mainstream social processes is a crucial driver of more diverse and vibrant schools, colleges, workplaces and cities.
‘ Ethics and Transparency
Transparency is normally equated with ethical behavior, anti-corruption and high standards of voluntary disclosures. Financial corruption, as much as it is a moral issue, diverts crucial monies from much needed spending on social challenges and has therefore, an indirect but tangible impact on sustainability. Disclosures by institutions hold them up to public scrutiny and thereby, in a constant state of responsible behavior.
‘ Eliminating Poverty
An outcome of the global financial crisis of 2008 that is not widely known is that the number of people living in extreme poverty has actually risen since then. Fuelled by the economic crisis and rising food inflation, nearly 2 billion people live on less than $1.25 a day at 2005 prices ‘ as extreme poverty is defined. Linked with extreme poverty are higher infant and maternal mortality, lower life expectancy and poor levels of education.
2. SUSTAINABILITY STRATEGY AND GOVERNANCE AT WIPRO
‘ Energy & GHG Intensity:
Company’s Energy Efficiency per employee stood at 279 units (kwh) per month Vs 275 units per month for 2008-09. This marginal increase is largely explained by a significant increase in the proportion of data centers in our business model. After factoring for this, the metric is 270 units per month on a consistent comparable basis, a reduction of nearly 1.5%. Company’s GHG emission intensity has reduced by 2.3% to 4.23 metric tons per employee as compared to 4.33 metric tons in 08-09. It is to be noted that this represents the aggregate of Scope 1, 2 and 3 emissions
‘ Employee Health and Safety
Employee engagement and involvement was strengthened with the launch of online surveys to invite employee feedback on Environment, Health & Safety, Transportation, Hospitality and related services. Environment, Health & Safety received high scores, while the latter present identified opportunities for Improvement.
‘ Diversity and Inclusivity
Diversity ‘ People with Disability, Gender, Nationality and the economically underprivileged. We hired 83 people with disability (PWD) in 2010-1, taking our total strength of PWD to 253 Women constitute 29% of the workforce, up from 27% in 08-09.
‘
FUTURE PROJECTIONS OF TRADE
With emerging markets targeting Research & Development (R&D) investment to scale the value chain in the high-tech sector, this illustrates the need for developed economies to invest in innovation to remain competitive.
Wipro Ltd, India’s No. 3 software services exporter, forecast subdued IT services sales for the current quarter after posting an 18 percent rise in quarterly profit that met market expectations on growth in outsourcing work.
The IT services unit, including back-office operations outsourcing, accounts for more than 75 percent of sales at the company that also makes soaps, light bulbs and hydraulics equipment.
Wipro’s IT Services Chief Executive T.K. Kurien is trying to boost market share amid economic uncertainty and currency volatility and attempting to close the narrow lead U.S.-based Cognizant Technology Solutions Corp has established.
Wipro, whose chairman is billionaire Azim Premji, said it expects September-quarter IT services revenue of $1.52 billion to $1.55 billion, a rise of 0.3 to 2.3 percent from the June quarter.
Consolidated net profit rose to 15.80 billion rupees for the fiscal first quarter ended June 30 from 13.35 billion rupees a year earlier for Wipro, which counts Citigroup Inc and Cisco systems Inc among its clients.
Analysts, on average, had forecast a net profit of 15.95 billion rupees, according to Thomson Reuters I/B/E/S. India’s $100 billion export-driven outsourcing sector faces diminishing hopes of an early revival in demand as their biggest markets, the United States and Europe, grapple with changes in the economic and political climate. Earlier this month, Infosys Ltd, the no. 2 software exporter, made a bigger-than-expected cut in its revenue growth forecast for the current fiscal year.
Wipro shares, valued at about $16 billion, are down some 10 percent so far this year. In comparison, the broader Mumbai market has gained 9.2 percent, while the sector index is down 8.6 percent in 2012.
‘ Focus on technology
‘ Low levels of R&D in the manufacturing sector will limit innovation in the high-tech goods sector. In our view, India will struggle to make a noticeable shift away from exports of low- technology goods to high-technology goods.
‘ The Indian authorities are making efforts to reduce imports of high-tech goods; the government announced regulatory proposals in early 2013 to restrict imports of high-tech products such as laptops, printers, Wi-Fi access points, network switches, routers and phones, demanding that a share of at least 30% of product sales should be from Indian suppliers.
‘ Despite these efforts, we still expect import growth of high-tech goods to outpace export growth over the next couple of decades.
‘ Conversely, the software services industry has managed to flourish while largely remaining under the radar of bureaucratic government policies aimed at encouraging domestic production of computer hardware. We expect this sub-sector to continue to expand in coming years as it benefits from a steady supply of engineering graduates.
‘
BUSINESS MODEL
BUSINESS STRATEGY
‘
Executive Summary
At the beginning of 2005, the global IT services market was estimated to be approximately US$630bn, and was growing at around 6% year on year. IDC had estimated that the global BPO market would grow to $1.2 trillion in 2006, sharply up from $300 billion in 2004, representing a quadrupling of business in a two-year time span. Both American and European companies were planning to outsource key business processes, accounting for up to 23% of their revenues by 2007 (versus 5% in 2004). Off shoring had thus emerged as a major disruptive force in the global services industry. India had emerged as the most competitive and popular IT-outsourcing destination in the world (See Appendix 2) and topped the ranking of The Global Outsourcing Report 2005. It was predicted that low-end outsourcing services would grow globally from USD 7.7 billion in Financial Year 2003 to USD 39.8 billion in Financial Year 2010, which implied a Cumulative Annual Growth Rate (CAGR) of 26 percent. In contrast, the revenue from the global KPO market was USD 1.2 billion in Financial Year 2003 and this was expected to grow to USD 17 billion by Financial Year 2010, which implied a CAGR of 46 percent. Wipro had embarked on a process of transformation from being a low-cost provider of offshore resources, to a global competitor vying for close relationships with strategic customer groups. These business-to business relationships addressed end-to-end requirements for IT and business services with large- and mid-scale customers. Wipro had the challenge of building on this initial success and expanding strategic client relationships in order to sustain growth. Given these strategic imperatives, senior management at the firm believed that continued efforts to enhance brand awareness, brand differentiation, and brand positioning would all play increasingly important roles.
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HISTORY AND GROWTH OF WIPRO TECHNOLOGY
Founded in 1945 by M.H Hasham Premji, Western India Vegetable Products (WIPRO) was inherited by his son Azim Premji at the age of 21, on the death of his father in 1966. From its business focus at that time as a manufacturer of food products, Azim Premji led its diversification into the technology domain, first in personal computers, and then in software from 1984 onwards. The company also moved to Bangalore, where it is still headquartered. Wipro also operated out of a number of other Indian cities, and had also increased its global presence over the years. In Europe, it had offices in France, Germany, Switzerland, Finland, Sweden, and The Netherlands, with a regional headquarters in the UK. Its Asia-Pacific offices were in Japan, Australia, China, Malaysia, and Singapore. In North America, it operated out of the West, Midwest, North East, and Eastern regions, and in Ontario, Canada. Wipro’s revenue had increased from in $ 75 million in 1995 to $ 1870 million in 2005 Mr. Premji owned over 80% of the shares of Wipro Ltd. (Wipro’s parent company), valued at over 21bn, making him the richest man in India and one of the richest in Asia. As one of Asia’s leading business leaders, he had been awarded many accolades for his leadership of Wipro, including Business Man of the Year 2000 by Business India, and Business Leader of the Year 2004 by the Economic Times. He was also the prime mover behind Wipro’s achievement of advanced Six Sigma, CMM, and PCMM status.
Today, Wipro Limited was among the first PCMM Level 5 and SEI CMM Level 5 certified IT Services Company globally. Despite his fame and fortune, Mr. Premji was known for his low-key personal management style, which focused mainly on professional values, integrity of character, and extremely high performance standards. He maintained a grueling work schedule, and had inspired many generations of technology leaders in his company and the wider IT industry in India. Wipro-ITes across all walks of the organization were equally proud of their intellectual integrity and professional work ethics, and many referred to themselves as ‘baby-Premji’s.’
Business Strategy of WIPRO
General Strategies
A. COMPETATIVE STRATEGIES
‘ Technological excellence.
‘ Innovative solutions
‘ Operational excellence
‘ Global footprint
B. COST LEADERSHIP
C. Focus Strategy
WIPRO’s strategy to go global
PAST STRATEGIES
‘ Growth has four faces: Organic, acquisition, diversification and joint venture. Growth Strategy over the past years has shown a marked change from earlier pattern.Between1966-2009, it grew through diversification, partnerships and organically, through Innovations.
RECENT STRATEGY
‘ IT services and product segment accounted for 69% of the company’s revenue during the Fiscal year ended March 31, 2009.
‘ WIPRO provided its clients with customized IT solutions in the area of IT services, technology infrastructure and R & D Services.
‘ WIPRO Provides services to banking segment, manufacturing segment, energy industry Etc.
‘
WIPRO’s strategy mainly revolves around three points:
1. Service Line expansions-Building a full portfolio of technology services
2. Quality leadership- Quality standards such as six sigma, effort to become global six sigma leader.
3. Investing in human capital: WIPRO is investing in a lot in training, not only on the technology side but also on teaching its engineer how to become consultants. This helps them to take on large and complex projects and drive them out of India.
WIPRO’s Strategy for future growth
WIPRO expects significantly grow its global IT service business and the percentage of its total revenue and profits contributed by the business over the next few years. It hopes to achieve this objective by identifying and developing service offering in emerging growth areas as separate business opportunities, such as infrastructure support services business intelligence eservices and telecommunication, internet and application service providers.
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KEY TO SUCCESS
The key factors for a successful business implementation can be summarized below’
1) EFFICIENT RESOURCE MANAGEMENT
a) Complete Ownership ‘ Establishing a dedicated Enterprise Test Environment Management team
b) Creating a Perimeter ‘ Denning the Test Environment lifecycle and its scope
c) Sharing the Wisdom – Knowledge Management
2) STRATEGIC PLANNING AND ROBUST PROGRAM GOVERNANCE
a) Improving viability – Denning the Test environment strategy
b) Creating a Perimeter ‘ Denning the Test Environment lifecycle and its scope
c) The Good, The Better and The Best ‘ Program Governance & Continuous Improvement
3) PROCESS OPTIMIZATION AND OPERATIONS EXCELLENCE
a) Consolidation, Simplification and Reuse ‘ Test Environment Assets Utilization
b) Improving efficiency ‘ Process optimization and standardization
c) Thinking Ahead ‘ Demand Forecasting and Capacity Planning
d) Working together ‘ Orchestration through Collaboration
e) An Early Bird Catches the Worm ‘ Involve the Test Environment Team early on
f) The Right Test Data at The Right time ‘ Managing Test Data
4) AUTOMATION
Minimizing Dependencies ‘ Automating Test Environment Activities.
Process Implementation Model
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PRODUCTS AND SERVICES
Wipro Products showcases the best in sophistication and styling across India and the Middle East, with primary focus on blending green computing and your sense of style and comfort. With high-end performance being the cornerstone of our product development process, we bring you a wide array of Green technology products that help you choose what’s best for your day-to-day operations as well as the world around you.
Businesses today are looking for domain specific integrated technology solutions that can help improve asset productivity. With over 20 years of experience and strong alliances, Wipro Infrastructure Technology Solutions helps cater to your IT infrastructure providing latest technology products and services at competitive costs.
Our enterprise products are customized based on a requirement analysis of your IT environment and include the following:
‘ Networking Solutions
‘ Platforms & Storage
‘ Enterprise Information Security
‘ Emerging Technologies
‘ Enterprise Management
‘ Contact Centre Infrastructure
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MARKET RESEARCH
WIPRO wants to go for strategic alliance with Ceynocta Pvt. Ltd. of Sri Lanka. So before go for strategic alliance they should do market research of Sri Lanka. It gives reasons for ‘Why we should invest in Sri lanka’?
With a highly skilled workforce and a cost-competitive business environment, Sri Lanka is emerging as a hidden gem for IT and business process outsourcing (BPO) and knowledge services outsourcing (KPO). Competitive Benchmarking: Sri Lanka Knowledge Services Overshadowed by a long-running war and the success of India’s information technology (IT) industry, Sri Lanka is unrecognized by most as a center for delivering IT, business process outsourcing (BPO), and other knowledge services.
KEY FINDINGS
Tax and regulatory costs
In the last two budgets, the government has taken significant steps to streamline the tax system by eliminating several minor taxes and levies and reducing corporate income tax rates and value-added tax rates. As of April 2011, the standard corporate income tax rate is 28 percent, down from 35 percent.
Moreover, the government offers generous incentives for IT and BPO companies; these incentives reduce the tax rate to zero percent for most investors. The corporate tax rate for all exporting companies has been reduced to 12 percent, and new undertakings with investments in excess of $250,000 are eligible for a four-year tax holiday, while investments in excess of $2 million are eligible for additional tax free years.
People Skills and Availability
With a population of 20 million and a workforce of 9 million, Sri Lanka offers a relatively small talent base compared to most competing countries. Of the 12 countries included in our benchmark sample, only Mauritius and the UAE have smaller workforces. However, many of the countries that have proven most successful as knowledge services locations have even smaller populations; notable examples include Chile, Costa Rica, Ireland, Israel, Singapore, and most of the countries in Eastern Europe. Malaysia has established itself as a major global services center while offering a workforce only marginally larger than that of Sri Lanka.
Future talent pool: graduation rates
Sri Lanka has 23 accredited universities and numerous private higher education institutes offering full degree programs. The total number of students enrolled in higher education now exceeds 400,000, with almost 100,000 students graduating per year. Most graduates have degrees in disciplines relevant to the knowledge services industry, including computer sciences, finance, commerce, law, medicine, architecture, and engineering. More than 5,500 graduates with IT-related degrees and post-graduate degrees are now joining the workforce each year. In addition, more than 25 private educational institutes offer diplomas in IT, and tertiary and vocational education institutes around the country offer preliminary IT training courses.
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Education quality
Since colonial times, Sri Lanka has excelled in education quality compared to other developing countries. With free primary and secondary education in place since 1938 and an extensive university system, Sri Lanka’s education systems are top level. Sri Lanka’s literacy rate has exceeded 85 percent for more than 30 years and is currently 91 percent, while literacy levels in most countries in South Asia have been lower than 60 percent until quite recently.
Business Strategy
Introduction
Business strategy demonstrates the direction that a business will take in order to achieve its goals. It can also be defined as a long term plan of action that a business formulates in order facilitates the achievement of organizational goals. A strategy states how a particular business should be conducted to achieve success.
Advantages of a business strategy process for an Organization
‘ A business strategy should clarify company’s direction and strategic changes required for long term success.
‘ The process of creating a Business strategy forces an organisation to thoroughly analyze structure its business
‘ It will improve profitability within present business model.
‘ The Business Strategy fulfils several importance purposes in the company; it identifies industry changes and key external trends & indicates company’s future direction.
‘ It creates proactive organization
‘ Analyze Strengths & Weaknesses
‘ Determine Core Values
‘ Define Organization end state Goals
‘ Measure Related Risk
Acquisitions
1- The preference of purchasers: stock vs. asset deal
Sri Lanka doesn’t have specific legislation dealing with the tax treatment of acquisitions. Accordingly, general principles of taxation apply when structuring a deal and choosing between an acquisition of assets or stock. Whether a deal should be structured as a stock or assets deal may largely depend on commercial considerations.
2- Stock Acquisitions
Generally, it’s a less expensive for a purchaser to acquire the business under a stock deal, as currently no stamp duty is payable on a transfer of listed stock. However, 0.3% share transaction levy is payable by the seller and buyer on the turnover of such stocks
2.1 Preservation tax losses
Where a target company has accumulated losses carried forward and the buyer wishes to preserve the losses, it will have to acquire the business via a stock deal, as there are no provisions for the transfer of losses from one entity to another. The tax statute provides that, where there has been a change in ownership of a company resulting in more than 33.3% of the issued capital of that company being held directly or through nominees who didn’t hold such share capital in tax year in which the loss was incurred, the carried forward losses may only be set off against the profits derived from the same business. The amount of losses incurred by a company in any year of assessment in any trade, business, profession or vocation, including any brought forward losses, may be set off only up to 35% of the total statutory income excluding any non-assessable income. However, any losses incurred on or after 1 April, 2007 from the business of life insurance can be set off against the profits from the business of life insurance can be set off against the profits from leasing business included in the statutory income.
2.2 Continuity of tax incentives
Where the target company enjoys any tax incentives, the business have to be acquired via a stock deal to ensure continues applicability of the incentives.
2.3 Asset acquisition
An asset deal allows a purchaser to select the desirable assets to be acquired and to transfer assets between one or more entities so as to mitigate the future inter group tax payments.
2.4 Transaction costs
2.4.1 Value added tax
Stock deal: The transfer of shares is exempt from VAT.
Asset deal
A transfer of a continuing business which satisfies certain conditions is also exempt from VAT. The transfer of assets is however liable to VAT at the standards rate of 12%. If the asset is used in the business, the input VAT that is liable could be claimed, provided the asset is purchased from a VAT registered person.
2.4.2 Stamp duty on immovable property
Stamp duty is payable to Provincial Councils on the transfer of immovable properties. Stamp duty is payable by the purchaser t 3% on the first Rs. 1,00,000 of the consideration and 4% on the balance of the consideration in excess of Rs 1,00,000
2.4.3 Share transaction levy
A levy at 0.3% is imposed on both buyer and seller on the sale and purchase of listed shares.
2.4.4 Tax deductibility on transaction costs
The share transaction levy is not tax deductible to the buyer in computing profits and income for income tax purposes. Similarly, the stamp duty would also not be deductible for income tax purposes. Similarly, the stamp duty would also not be deductible for income tax purposes as it relates to a capital transaction.
Acquisition Process
Acquisition Application
Form 01, Form 02, Form 03,Form 04
Applicant Institution – Forward the application through the respective Ministry
Section 2 Direction Ministry of Land and Land Development ‘ Grant authority to enter the land and the decision of Hon. Minister that the particular land is needed for a public purpose.
Section 2 Notice
Sinhala, English, Tamil
Divisional Secretary – Publish the notice in the surrounding area.
Advance Tracing Superintendent of Surveys
Section 4 Direction Ministry of Land and Land Development- Inviting objections from the land owners and decision of the Hon. Minister for investigation
Section 4 Notice
Sinhala, English, Tamil
Divisional Secretary – Publish the notice inviting objections
Objection Inquiry Applicant Ministry – Forward recommendations after conducting investigations on objections
Section 5 Declaration Ministry of Land and Land Development – Decision of the Hon. Minister of Lands that the land is to be acquired
Section 5 Notice
Sinhala, English
Divisional Secretary/Government Printer – Publish a gazette notice that Hon. Minister of Land and Land Development decided that the land is to be acquired
Final plan Superintendent of Survey
Section 7 Gazette Notice
Sinhala, English
Divisional Secretary/Government Printer – Invitation notice to investigate the title of the land.
Section 9- Inquiry into Title Divisional Secretary ‘ Investigating title
Section 10- Decision on TitleNotice, Forward to Court (Form 02, Form 04)
Divisional Secretary ‘ Determine the title
Valuation Valuation Department
Section 17 ‘ Awarding Compensation (Form)
Divisional Secretary
Payment of Compensation Divisional Secretary – Allocate financial provisions from the Ministry of Lands or the relevant Institution and make payments to the land owner
Gazetting 38 Order Ministry of Land and Land Development – Take over the land’s possession to the Government
Taking undisturbed possession Divisional Secretary ‘ Take over the procession and hand it over to the applicant institution
Section 44 Vesting Certificate/ Registration of State Ownership
Form 01, Form 02, Form 03,Form 04, Form 05, Form 06,Form 07, Form 08
Divisional Secretary/Registrar General – Issue vesting certificate to the Institution concerned, after payment of compensations to the land owners
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MARKETING STRATEGY
WIPRO focuses on ‘pull’ marketing initiatives, targeting prospective clients while they are searching for relevant IT information. Mostly this mean web based marketing with four key components.
‘ Search engine promotion
‘ Thought leadership content on leading IT portals and directories.
‘ Web based seminars and events
‘ Website content
1. Planning to aggressively develop the R & D services by focusing on high growth markets dedicated sales team for Europe and Asia
2. Focus on New client acquisition in Europe and Asia
3. WIPRO’s own website is the fulcrum of the entire lead generation program
4. Consciously focused on increasing the revenue contribution from higher-end service lines
5. Special offers and more than 400 case studies to get visitors to demonstrate and register their special interests.
6. Comprehensive web monitoring
7. WIPRO uses permission marketing to strengthen relationship and move prospects along the sales cycle.
8. Marketing team relies on the prospect database to create carefully targeted lists based on incoming traffic, client profiles, and ongoing web activity.
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Financial plan of WIPRO Technology
FINANCIAL PERFORMANCE FY 2013 FY 2012 FY 2011
Revenue (Rs in mn) 3,76,882 3,18,747 2,71,437
Profit before depreciation, Amortization, Interest & Tax 79,885 69,131 61,768
PBIT (Rs in mn) 69,972 59,912 54,441
Depreciation, Amortization (Rs in mn) 9913 9219 7327
Effective Tax rate 21.5% 19.8% 15%
Tax (Rs in mn) 16,912 12,955 8,878
PBT (Rs in mn) 78,596 65,523 59,148
PAT- Profit for the period attribute to Equity holders (Rs in mn) 61,362 53,235 49,938
PER SHARE DATA (for continuing operations)
EPS- basis (in Rs) 25.01 21.36 20.49
EPS- Diluted (in Rs) 24.95 21.29 20.36
Book value (in Rs) 116 116 99
Dividend per share (in Rs) 7 6 6
SHAREHOLDING RELATED
Number of share holders 2,13603 2,27,158 2,20,238
Market price of shares adjusted for bonus (in Rs) 437.2 440.1 480.2
Dividend distribution Ratio (%) 33% 30% 32%
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Projected Financial Plan for Year 2014 and 2015
FINANCIAL PERFORMANCE Projected figure for year 2014-15 Projected figure for year 2015-16
Revenue (Rs in mn) 4,44,720 5,33,664
Profit before depreciation, Amortization, Interest & Tax 87,873 1,01,933
PBIT (Rs in mn) 73,873 86,733
Depreciation, Amortization (Rs in mn) 14,000 15,200
PBT 71,373 84,233
Effective Tax rate 23.20% 24.90%
Tax (Rs in mn) 20,869 24,826
PAT- Profit for the period attribute to Equity holders (Rs in mn) 50,504 59,407
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Findings
‘ The growing ICT industry in Colombo offers a unique advantage for Small and Medium Enterprises (SME) to enjoy premium access to a high quality talent pool, which is becoming increasingly challenging in large established destinations such as India and China.
‘ There are less regulatory burdens in Sri Lanka as compare to India. The government offers generous incentives for IT and BPO companies; these incentives reduce the tax rate to zero percent for most investors in IT/BPO in Sri Lanka.
‘ The chances of theft in (IP protection) Sri Lanka is comparatively high as compare to India.
INDIA AND SRI LANKA COMPARISON
Particular India Sri Lanka
National Average Wages $1,620 $1,584
IT Programmer wages $10,170 $8,996
BPO analyst wages $5,451 $4,104
Accountant wages $10,123 $5,977
Real estate cost ($ per square mtr) $918 $227
Electricity Cost (Per kilowatt hour) 0.15 0.18
Electricity Quality (Per kilowatt hour) 3.1 5
Labor Market Flexibility (Rank among 183 countries) 104 96
Difficulties for Wipro
Build the Culture
Implementation of Six Sigma required support from the higher level managers. It meant restructuring of the organization to provide the infrastructure, training and the confidence in the process. Wipro had to build this culture and that took time in implementation.
Project selection
The first year of deployment was extremely difficult for Six Sigma success. They decided to select the project on the basis of high probability of their success and targeted to complete them in a short period to assess the success. These projects were treated as pilot projects with a focus to learn. For the selection of the right project the field data was collected, process map was developed and the importance of the project was judged from the eyes of customers.
Training
After the set up, the first step of implementation was to build a team of professionals and train them for various stages of Six sigma. The training was spread in five phases: Defining, measuring, analyzing, improving and controlling the process and lastly increasing customer satisfaction. These phases consisted of statistics, bench marking and design of experiments. To find the right kind of people and train them was a difficult job. This motivated Wipro to start their own consultancy to train the people.
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Resources
It was difficult to identify resources that required for short-term basis and long-term basis as it varied from project to project. Wipro did it on the basis of seriousness importance of the project.
Project Reviews
As timely reviews play a very crucial role to judge the success of a project. Wipro had to develop a team of experts for this purpose. The task assigned was to see the timeliness, find out gap, week areas and to check the outcome as per the plan.
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CONCLUSION
WIPRO is one of the leading IT Company in the world. They are serving customers in 50+ countries. They are present in 35+ countries. They have global workforce comprising of 50+ nationalities. They have investors from 24+ countries. We have found that WIPRO has lots of benefits in doing business with Sri Lanka. It is beneficial for both the companies, WIPRO and CEYNOCTA Pvt. Ltd. if WIPRO acquires Ceynocta. In Sri Lanka, there are lower wage WIPRO has to pay in Sri Lanka. Real estate cost is very less as compare to India. Sri Lanka has more labour market flexibility which is the most beneficial for the WIPRO.
At the end we can conclude, it is beneficial for the WIPRO to acquire the Ceynocta Pvt. Ltd. for the international business expansion.
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BIBLIOGRAPHY
‘ http://www.icta.lk/en/icta.html
‘ ICT Electronics. Sri Lanka’s showcase of ICT/ELECTRONICS Export Services
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‘ Narasimha P. Critical success factors for a Successful test environment management. IND/TMPL/OCT2013-APR2014
‘ Kohli R. CMO -Wipro Global IT Business. GLOBAL CXO OUTLOOK Growth Strategies for 2012 and Beyond. July 28, 2011.
‘ Sharma M. Pandla K. Gupta P. Case study On Six Sigma at Wipro Technologies: Thrust on Quality.
‘ Annual Report 2012-2013. Customers focus collaborating for the future
‘ Kelegama S. The India’Sri Lanka Free Trade Agreement and the Proposed Comprehensive Economic Partnership Agreement: A Closer Look. No. 458. February 2014
‘ Gerhard P. Driving Strategy to Execution. January 4, 2013.
‘ Ceynocta (Pvt) Ltd. http://www.ceynocta.com/web/
‘ WIPRO Technology. http://www.wipro.com/india/