India is considered as a exporter of Software & Services. Considering figures published by NDTV, its $68.02 billion for year 2011-12. Refer There is no doubt that major percentage of this revenue would be contributed by Software services company. and Indian product companies would be contributing in minor way.
Now What generally a Software Services Company do?
Broad answer to this is:
1) They do maintenance of softwares built by companies in US.
2) They do resource extension - Supply trained professionals to work on client site, who know abt software.
3) They take up configuration projects for big products like SAP, Oracle, Salesforce.
4) They provide support for Softwares to answer the queries.
Software service company's 80% workforce is software engineers/IT engineers or people who can do some support activities around software.
If you see major In-College Job Placement Scenario, Majority of jobs were and are offered by IT Services companies like TCS, Infosys, HCL, Cognizant. Apart from these big names, Lots of mid and small services companies are there who are working on small scale projects and earning livings.
How do they earn revenue?
These companies normally takes project from US & Europe. They charge from $10 to $1000 per hour (or more) for work done by an employee. It means ~INR 500 to INR 50,000. More the number of hours estimated for a project, more is the revenue. Whatever revenue they earn from customer, they charge some fixed amount to employees. For Example. If an employee in XYZ company is working on a project for a month. His total work days would be ~20 days. If we count 8 hrs of work every day. It would come to ~160 hrs. Normally a company charges $50 or INR 2500 per hour. So monthly they would get arnd Arnd 4,00,000 or whopping 4L rupees. while company normally pays arnd 40k Rs to an employee as monthly compensation. So Company earns arnd 3.6 Lakhs per employee per month.
What is on Bench?
As companies do outsourced work and business is generally profitable when employee is working on some project. so These companies need to constantly
hunt for projects. Sometime a projects get over and company doesnt have any other project for an employee to work on. So they ask employees to wait or sit on bench. He is not allocated any computer to work on. They do pay salaries without him to have to do any work. Its loss for company certain period.
What are challenges?
Although it looks all is well and very goody-goody affair, but it may not for some companies.
There are certain challenges in running business
1) They need to find Projects and Negotiate on per hour and Total Project Duration. Sometimes for acquiring projects, sales guys give less cost and less duration, Which may result is more stress on end workers who are software manager, engineers.
2) Retaining employees - During onbench period, Its hard to retain good people.
3) US/UK visa - Many times client demands that they need employee work from their premises. For this companies need to enable visa's but Visa processes have become more stringent day by day.
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