The Future of Indian IT Companies

Finally, the language is beginning to be spoken. About Indian IT companies needing to accelerate their Innovation Strategy and implementation. On the eve of 19th edition of Nasscom India Leadership Summit, there is a buzz  that “The industry believes that innovative business processes and business models will have to be implemented in the next three-five years for the IT sector to leapfrog into the next decade. It will also be a key parameter to capture the $175-billion opportunity by 2020 that Nasscom has projected.”http://www.business-standard.com/india/news/innovationway-forward-for-it-sector/424516/ ).

There has never been a shortage of courage and hard work put in by the people in the industry. On the contrary, the people in the industry especially from India work extremely hard with the revolving sun and Indian families are more tolerant and understanding of their spouses than anywhere else in the world. Management of companies sometimes without sophisticated Information Systems is also extremely smart and aggressive; balancing market demand with available supply.The marketing and sales of these companies over the years have evolved from shoe string budgets and resources to perhaps more comfortable outlays today to keep the pipeline turning. Indian IT companies are still considered as reliable companies to invest in and expect fair returns by retail investors. So what is stopping these companies from taking that next higher leap?

Their very success. They are rendering the Chinese Proverb true…”Those whom God wants to punish, he bestows upon them 30 years of success”. The mindset needs to change, the language and so the presentation. Right from the Customer facing front to the delivery and administration of their organization needs a dramatic transformation in Thinking, Acting and Realizing the demands of the new market economy. The trading mindset needs to change to an engineering mindset. This is best exemplified by the recent Maruti ad campaign that says “for a country obsessed with mileage…http://www.youtube.com/watch?v=y0IKkoIfR1g&feature=BF&list=PL47AA7A22CE0F1BB1&index=1”. Customers anywhere in the world find it difficult to trust the fact that Indian companies can actually do something beyond body shopping. This is despite all the acquisitions and market presence engineered by some of the top 10 companies at a fair amount of cost. The most significant barrier comes from the very front people who are not Indian in these companies; who have a hard time trusting that they could expect fair delivery of the promises made. So the easiest route has been the path of low resistance; competing on cost and volume.

It is an entirely different ball game on how one innovates for niche and value. The organization structures will have to dramatically change. The posture and the language will have to transform as well. The culture and therefore the structure will have to move from selling like a vendor to collaborating like a partner. There is no point mouthing slogans like co-creation; it will have to be tangibly demonstrated. The very definition and evaluation of Risk will have to change from “the risk of doing versus the risk of not doing”. Deals will have to be replaced with annuity based relationships. The very nature of business will move to be more inclusive of Products, Processes, Service and / or Platform. Scale will only help the organization to sustain the Service and Platform end of the business. But the companies must now gear up to the understanding that they will make new revenue and profits from products and processes that will then move business down to the commoditized sections of service and platform. Therefore when one reads of the iGate’s acquisition of Patni and TCS’s 500 Million stash for acquisitions, it is hoped that there are more cash reserves to make the transformation that is so fundamental to happen in these companies happen. It is not going to happen overnight and it will  not happen across the organization. It will be along drawn process where the effort would  be to arrest the attrition from the 20% and get more inflow from the 80%  of the enterprise into  the 20% zone. Where it is generally understood that the 20% zone is the contributing zone to the growth of the enterprise and the other 80% is the consuming one.

All the assets of People and infrastructure gathered over the years must be made to come to play. In this game, the software players deal first and in order to win, anticipate and raise the capacity of the player they are playing with and in the process raise the stakes. In other words, the Customer’s Customer Value is a reality more than a clichéd statement. The emphasis would be more on design and solution and not just on tools and implementation. Resources will be specialized and generalized at the same time working with the convergence of technology and the divergence of business requirements; mutually inclusively. Some companies who have even boasted of creating certainty in an uncertain world will now have to seehave the world differently. It is only the ones who can thrive in all the uncertainty who will have the creative license to innovate. Value doesn’t need to make a statement.  It is perceived (very tangibly in the five dimensions of Quality, Cost,  Delivery, Service & Flexibility mutually inclusively) and the minute any of the parameters drop, it affects the perceived reality, the customer will dis-engage. The IT companies must realize and realize quickly that humans learn only by experience (doing); whether it is walking, running, riding a bicycle, climbing a mountain or flying an aeroplane. Nobody can claim that they have learnt something by just looking at others. Each one of us dive in and act out  our observations and in the process learn. The good learners refine their weaknesses quickly and master a craft.

About Subbu Iyer

Subbu Iyer is an Innovation & Transformation Leader as with 28 years of serving customers globally. He is currently the Chief Designer & Transformer at Energizing Innovation, an enterprise that is being founded to facilitate continuous growth in enterprises and as a consequence create societal wealth. The Radical Shift that this enterprise intends to employ is focusing on the Potential rather than the Performance of a business. He has been a serial entrepreneur and an intrapreneur in his past life, having founded Nihilent Technologies and Nandaki Systems besides being associated in senior leadership roles with firms such as Coopers & Lybrand, Cambridge Technology Partners, Tata Consultancy Services, Wipro Technologies and Steria.
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