Mumbai: Pure software is pass, IT-enabled is in. Software service companies engaged in offering business services using information technology - plainly called IT-enabled service companies - have attracted a lot of venture capitalist attention despite a universal IT slowdown.

Some of the known names, which have either already raised their investment targets in such companies or are in the process of doing so, are: eVentures India, CDC Capital, Global Technology Ventures, Westbridge and Citigroup Ventures, Chrysalis Capital, e4e and eTech Ventures. As much as 40 per cent of the total investible funds from VCs are likely to find their way into IT-enabled service companies by the end of fiscal 2002.

This is not surprising considering the fact that revenues from IT-enabled services contributed almost 10.60 per cent to the total revenues from IT software and services in India in fiscal 2001. As per Nasscom figures, revenues from IT-enabled services rose almost 61 per cent to $890 million in fiscal 2001 from $550 million in the previous fiscal.

For beginners, IT-enabled companies offer or operate services like call centres (customer relationship management), medical transcription, business process outsourcing such as payroll management, human resources system management, internal auditing or account management, distribution and logistics management, content development, remote education and market research. Simply put, IT-enabled services involve delivering business services from one location to a different (used) location through the Internet and telecom infrastructure. Of late, IT-enabled service firms have begun exploring new areas for fanning growth in addition to the traditional areas of call centres and medical transcription. This area is termed as business process outsourcing, global market for which is expected to grow 21.20 per cent compounded and reach a size of $543 billion in 2004 from $208 billion in 1999.

According the Gartner Group, well-known consultants, the US and Europe are the largest markets for business process outsourcing (BPO) with contributions of 54 per cent and 31 per cent respectively. One of the reasons for IT-enabled companies venturing out into new areas is for enlarging their working area base due to the fact that traditional services like call centres and medical transcription have failed to fulfill their potential.

Moreover billing rates are said to be higher in BPO services. Following the identification of huge-potential companies like Infosys Technologies, Wipro, HCL Technologies and Intelnet, a joint venture of TCS and HDFC Bank are said to have moved into this new area. It is also convenient for these companies to get into BPO services as they are not only blessed with the requisite infrastructure but they also have clients, who have been demanding these services from them.