Lessons for Indian IT in the world of cloud

At the macro level,globalisation and digitalisation are affecting all industries; at the micro level,cloud computing and social networking will impact all companies. Since the Industrial Revolution,Western nations have ruled the worlds markets using talent pool from their colonies. Similarly,global IT biggies will colonise the IT world,leveraging their brand worth and localising in every country using emerging technologies like cloud computing. They will command the powerful cloud reservoir to become the central hub,monopolising the IT eco-system of global companies. Majors like Accenture and IBM,among a few others,have tremendous clout as they already drive their clients IT strategy on investment,innovation,solutions and applications at the strategic CEO/CFO and Board level. They even manage their clients other IT application sub-contractors,including Indian vendors,so clients can sleep easy. Companies like Google and Microsoft,who are not big service providers per se,have access to almost every PC/Internet user in the world. They too will try and leverage their position to gain traction in the cloud world. Emerging players like Facebook with 500+ million members might already be working on devising strategies to have their play in the new world of cloud. Thus Indian IT majors are squeezed (or perhaps sandwiched) between global IT biggies with their brand and customer trust on the one hand,and players with deep pockets and reach like Google,Facebook and Microsoft on the other. A sandwich typically ends up being lunch.

Recession has made global companies extremely price sensitive. When technology is advancing so rapidly,cloud computing may become the cost effective solution to de-risk IT investment. Here shared resources are available on demand,the way we draw our electricity or water supply from a common grid,effectively democratising it and freeing it from rigid silo-like structures.

Indian-origin IT getting clouded?

So will Indian-origin IT companies eventually lose their direct customer base and become third party sub-contractors of global IT biggies? Global clients have always considered Indian IT to be order takers rather than consultative vendors who enhance the clients business. Indian ITs current focus on the global delivery model chases volume growth. In going after quantity,they fail to strategise and invest qualitatively in imbibing best practices for long-term sustainable brand worth for better growth and net worth. In working directly with clients,when technology has become competitive and commoditised,a huge cost reduction is expected. Work volume could become very high,but the bottomline will plummet to 5 per cent.

Emphasise human intelligence in basic coding interface

The days of 25-30 per cent bottomline may be a thing of the past. A dramatic mindset shift is required towards becoming client business-centric. The only choice is vertical centricity,diving in-depth into the clients industry to shape his business strategy with high quality IT execution. Eighty per cent of Indias delivery execution people are below 30 years of age. They dont like to be software coders. After three to five years spent coding,these IT professionals want to become managers who control teams. The IIMs have MBA courses for them,but omit to teach how they can help the clients business in a global marketplace. So these engineering MBAs do not imbibe high quality technical skill or global marketing skills,eventually falling into the order taker trap.

Indian-origin IT enterprises also need to emphasise on making their brand globally accepted as a value differentiator. They fail to engage at a strategic level because of soft skills deficiency among employees. All companies claim they have soft skill training. Unfortunately thats an ISO-type certification that clients fail to perceive. A further gap is non-usage of best practices and their vast knowledge experience that already resides in the company to build a globally reputed brand. Scant attention is paid to collecting the companys historical data and managing it for easy retrieval. Indian managements give special consideration to the time employees spend at work rather than to productive quality.

Menu rather than thali

To localise solutions,Indian-origin IT companies may borrow a leaf from how star restaurants in the West serve customers. Using the same ingredients,chefs create their brands by embellishing dishes differently to sell at different prices. Western cuisine does not mix food like we do in the Indian thali system. From pre-starter to starter,main course,dessert and digestive,all are served separately by changing plates every time to restore each taste. The point is to understand cultural differences,not criticise either system of eating. Indian-origin IT companies serve like the thali where everything can be mixed. This generic IT service with several service lines caters alike to different industries. It does not sharpen focus for specific business requirements of customers. Volume business with standardised basic technology is processed to benefit customers with reduced cost and people arbitrage. Such service is commoditised today,like our water or electricity requirements. All customer touch points that engage the customer professionally and psychologicallyin marketing,sales,PR or delivery executionare in a thali today. Clients dont care for sales and marketing people,or large service lines numbers. They just need to enslave technology in their own industry to grow their businesses better than their competitors.

Excellence in execution is the need of the hour

Indian-origin IT enterprises will gain respect as global brands of IT intelligence if they drive this menu: 1) Exceptional localisation in each country they operate in,from culture,business and resource perspectives 2) Seamless blend of different human races of the world at work 3) Employees should be trained to become gold mines themselves,unlike the current transactional training for gold hunting 4) Deep-down focus on the clients business vertical with superior quality execution,the way the Japanese and the Koreans promoted their brands into new lands very successfully. They have globalised several brands with high execution quality,rather than claiming to innovate. This should be the grand route for Indian-origin IT; innovation and inventions are buzz words that the world is not yet ready to accept from them.

Every effort of global clients is to build the worth of their own brands for gaining proximity of their products and services to their end-customers. Global IT biggies are totally in sync with that and cloud computing may be an accessory. Unless Indian IT is superbly relevant to their clients business growth,will you still find Indian IT millionaires tomorrow?

Shombit Sengupta is an international creative business strategy consultant to top management