Natural spring water is a gift of nature; anybody can bring a container and collect water. What happens when the spring dries up? The demand-led global IT market has been the spring under which Indian IT services companies placed their buckets. Consequently,they grew phenomenally in the last two decades. With cost advantage,good management of large scale basic engineering and English speaking manpower,they established the IT backend structures for developed country companies. But the Western market for such commoditised IT services is beginning to dry up; IT needs are shifting towards value led delivery.
Offshore outsourcing is the uneasy gossip in the political climate of developed countries. The 11 million Americans who lost jobs during the recession are mostly still unemployed,and economic growth is miniscule. In this backdrop,only a case for business performance or value as measured by revenue,profit,customer satisfaction and market share justifies the significant,indispensable,recurring IT expenditure. Global IT and technology services buyers are contemplating how to de-risk IT investment. IT has become commoditised like paying for water supply or power. From operational cost cutting,IT is now assuming a business performance requirement,the only way for it to stay relevant.
Role change for CIOs: IT services are still pretty much a buyers market. The recession has increased the clients price sensitivity. Ten years ago,a business driven CIO in global companies was a rarity. Business now has no tolerance for CIOs who are only technologists. Although they still need IT understanding,new generation CIOs are compelled to align technology for their companys business value and performance. The pace of change dictates that they must be part of the executive team. How will Indian IT professionals,who are largely from technical backgrounds and horizontal services,fit here? Global IT brands establish client relationships at a business level with the CFO or COO,not necessarily targeting the CIO. So they are at a less competitive space; they get both high and low-end businesses. Indian origin IT firms are very strong at working reliably and technically only with CIOs or their reportees. They fight it out as commodity players in that competitive price zone. How can they re-orient and shift focus towards helping increase the clients business? Theres some hype of IT companies appointing senior professionals from different industries to present to IT buying clients. But clients find such force fitting to be a gimmick,more like a façade to hide shortcomings of their know how. This move probably helps Indian companies to deliver better,rather than improve the customers business performance.
When technology is continuously advancing,clients no longer say,Write this code. What they ask is,Help me optimise my supply chain efficiencies. In a rapidly shifting economy,if Indian IT companies proactively delve deep into the clients industry,they can find technology-enabled solutions that the client never thought of,and so increase the clients business pros-pects. By crafting new services or tweaking current service,Indian IT can display innovation.
Surprise the CEO client: How can you as an Indian origin IT company,make the difference? To be the clients technology mentor or strategic partner vertically,you have to understand his industry and core processes from the board room down to the factory floor. From a service delivery point of view,how does the client interact with his clients or end-customers? Find out where that chain is broken or not aligned,and fill in some of those holes. To impress the CEO,you have to know the few things that a CEO can impact in his or her time in the organisation,which are the market,resources,capital and service offerings. When you vertically,not horizontally,integrate inside the clients business,you can find and fix those alignment problems to become his preferred strategic partner. Coming in with a proposal that you can do everything,just doesnt work. Most clients dont want that,they seek focus. It is much better for organisations to re-invent themselves to specialise,have depth of service,be narrow,not wide.
Riding on the brand: The global IT companies use their branding on two axes,i.e. relevant solutions and delivery excellence. Accentures High performance,delivered is proactive and solution oriented,indicating that the firm is at the intersection of business (performance) and IT (delivered). IBMs Smarter planet is again a business orientation. Global brands take that extra excellence in delivery,and marry it on the front-end with excellence in solutioning. To survive not being commoditised,Indian origin IT services companies need to proactively provide the client with an opportunity,a point of view of where the world and their business in it is going. For example,one global IT major has documented how cloud computing is going to impact different industries,how will it play out and how companies in that vertical should think about it. Now this global IT biggie is hammering home that it is different,cost competitive,and it dominates with verticals.
The business people still want technology execution probably more than CIOs do,but that is at a business level. When they want to connect the front end with the backend,Indian IT can provide the technology execution of business. But are Indian IT brands considered credible for entrusting high end jobs to? By acquiring and exposing industry expertise for the client’s business advantage,Indian IT can run delivery discipline through their go-to-market to give technology usage a business-like perspective. Aside from focus on vertical centricity,the areas crucial for Indian IT brands to address are relevant soft skills in every customer touch point,outstanding delivery execution with high technology skillset and seamless localisation in their different countries of operation. With a central passion to increase the clients business prospects,challenging them with market driven new ideas,Indian IT brands can make that paradigm shift to gain a positive image.
Shombit Sengupta is an international creative business strategy consultant to top management. Reach him at
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