As the third quarter results season comes to an end , more questions have been asked than answered - is the ongoing slowdown in Europe going to be the bane or boon of the IT sector this year, is the opportunity to bid for the 50 B USD plus contracts that will be renewed soon a benefit for India firms particularly the nimbler Tier 2 ones and finally is this period of uncertainty going to enable the firms in the software sector to further strengthem their porcesses and quality with attrition at an all time low ?
The answers will unfold over the next two to three quarters. Early signs indicate that the European economic problems will not go away in a hurry and if Greece finally goes down and Italy Ireland and Spain get into a trough with weak growth also evident in UK and Germany, the situiation can become grim. The redeeming factor seems to be the US where there is a new confidence emerging that even if unemployment does not improve substantially, 2012 will be a decent year for the corporate sector leading to strengthening of the fortunes of all outsourcing companies.
The opportunity for being at the forefront of the action when contract renewals occur has always been there for the Indian top tier against the global majors and now for the 300 to 2 billion dollar firms against the top three Indian incumbents. However transitions are not automatic and contracts will still be won on real and perceived capabilities. Firms which have a "point of view" and are clearly able to articulate their differences vis a vis competition stand to gain in the churning that will play out over the next two years.
Finally, there is no doubt that a climate of calm pervades the Indian IT sector today. Our own company has seen attrition levels now kissing the single digit mark for the first time in half a decade and the critical talent that we seek to retain at all costs have been steadfast in their loyalty to the organisation cause. This certainly provides an opportunity to embark on intellectual property creation, expand relationships with customers and invest in training people in emerging areas like cloud mobility and enterprise social media to surprise and delight customers with a new range of offerings.
All in all these are interesting times. More power to the brave as we chart our corporate ships into the new year !
Sunday, January 22, 2012
Monday, March 17, 2008
Valedictory Session QnA Contd....
Question: In order for us to get ahead in the game and considering the shortage of Skills and adaptable Management depth, what are some of our initiatives to create a steady superior middle level Management adapted to the future market demands.
Ganesha: Training them to be quality conscious, have strong adherence to deadlines and focus on innovation and creativity. All firms are making efforts to ensure this.
Question: In order for us to get ahead in the game and considering the shortage of Skills and adaptable Management depth, what are some of our initiatives to create a steady superior middle level Management adapted to the future market demands.
Ganesha: There are a number if initiatives being taken by industry either through its own resources or through collaborations with customers as well as academic institutions to build a competent middle management cadre. An example is the Zensar Centre for Business Innovation which has launched a successful one year Business Transformation Analyst program to build 100 managers with domain, technology and management skills.
Question: Isn’t the view of the Industry Leaders changing the focus from America to Europe as the “prominent revenue generator” for IT and ITES industry shows our inability to structure our Business processes and Business Policies as it can’t sustain the unexpected fluctuations of the World Market? Shouldn’t we have understood the importance of a balanced and optimal distribution of regions across the globe which can balance the ups and downs of the Global Market? The next question popping up would be which continent we would focus next after a civil war or economical slow down in Europe with Dollar still losing itself against Rupees?
Ganesha: It is a fact that the US has been the dominant market for the Indian IT and BPO sector but the focus on expanding the opportunities in Europe or Asia has been there for quite some time and is not some kind of a knee-jerk response to a specific situation.
Ganesha: Training them to be quality conscious, have strong adherence to deadlines and focus on innovation and creativity. All firms are making efforts to ensure this.
Question: In order for us to get ahead in the game and considering the shortage of Skills and adaptable Management depth, what are some of our initiatives to create a steady superior middle level Management adapted to the future market demands.
Ganesha: There are a number if initiatives being taken by industry either through its own resources or through collaborations with customers as well as academic institutions to build a competent middle management cadre. An example is the Zensar Centre for Business Innovation which has launched a successful one year Business Transformation Analyst program to build 100 managers with domain, technology and management skills.
Question: Isn’t the view of the Industry Leaders changing the focus from America to Europe as the “prominent revenue generator” for IT and ITES industry shows our inability to structure our Business processes and Business Policies as it can’t sustain the unexpected fluctuations of the World Market? Shouldn’t we have understood the importance of a balanced and optimal distribution of regions across the globe which can balance the ups and downs of the Global Market? The next question popping up would be which continent we would focus next after a civil war or economical slow down in Europe with Dollar still losing itself against Rupees?
Ganesha: It is a fact that the US has been the dominant market for the Indian IT and BPO sector but the focus on expanding the opportunities in Europe or Asia has been there for quite some time and is not some kind of a knee-jerk response to a specific situation.
This year at the NASSCOM India Leadership Forum, the agenda for the last day during the Valedictory Session was made a spontaneous questions and answers session - questions that had been pouring in through the NASSCOM EMERGE Blog. While there were just so many we could handle during the session, there were still lots waiting to be answered.
Here are a few of them answered:
Question: India should not assume KPO boom as a natural evolution after IT boom, KPO boom may elude India altogether unless the India (NASSCOM!) charts out a clear action plan eg. setting up Universities which provide industry specific domain knowledge much the same way as IT knowledge is being provided. Are our leaders/ govt really working towards facilitating KPO boom or expecting it more by way of a right?
Ganesha: BPO is itself a large opportunity and KPO is only one aspect of it. The new budget will provide an impetus to the creation of talent which is so essential for this sector and industry will work with NASSCOM to ensure that the right ecosystem is created to sustain the momentum.
Question: Over the last 2-3 years there is a change in which we look at our resources in the Indian BPO industry. From cheap labour, today we are talking about skilled labour and output Indian employees give to their respective firm. My question is, with the deprecitaion in the US Dollar rate v/s Indian rupee and with labour getting expensive in India in the BPO industry, ho wwell will this theory help to retain jobs in India when countries like SA, Phillipines, etc are offering cheaper labour and equal skilled staff in the coming decade.
Ganesha: It is a very valid question and with all the sops being given by competing countries, we may not be able to compete only on costs for much longer. Good processes, superior quality, innovation and superior capability of manpower will all need to be there to sustain and increase our competitive advantage.
More coming up....
Here are a few of them answered:
Question: India should not assume KPO boom as a natural evolution after IT boom, KPO boom may elude India altogether unless the India (NASSCOM!) charts out a clear action plan eg. setting up Universities which provide industry specific domain knowledge much the same way as IT knowledge is being provided. Are our leaders/ govt really working towards facilitating KPO boom or expecting it more by way of a right?
Ganesha: BPO is itself a large opportunity and KPO is only one aspect of it. The new budget will provide an impetus to the creation of talent which is so essential for this sector and industry will work with NASSCOM to ensure that the right ecosystem is created to sustain the momentum.
Question: Over the last 2-3 years there is a change in which we look at our resources in the Indian BPO industry. From cheap labour, today we are talking about skilled labour and output Indian employees give to their respective firm. My question is, with the deprecitaion in the US Dollar rate v/s Indian rupee and with labour getting expensive in India in the BPO industry, ho wwell will this theory help to retain jobs in India when countries like SA, Phillipines, etc are offering cheaper labour and equal skilled staff in the coming decade.
Ganesha: It is a very valid question and with all the sops being given by competing countries, we may not be able to compete only on costs for much longer. Good processes, superior quality, innovation and superior capability of manpower will all need to be there to sustain and increase our competitive advantage.
More coming up....
Sunday, March 2, 2008
The Innovation Ecosystem - IT's New Imperative
The launch of the NASSCOM – Boston Consulting Group report on Innovation in the IT and IT Enabled Services industry in Bangalore at the end of July demonstrated the industry’s determination to create a new sigmoid of growth for the industry. After successfully using the “value for money” wage arbitrage advantage to get a toe in the door of global multinationals and then making the transition from on site to off shore delivery through the perfection of high quality processes and the ability to migrate technology development and business process management to Indian centres, the third wave if success in this industry may well come from innovation, adding a potential fifty billion dollars of new revenues in the next five years.
Its not that innovation is a new mantra for this industry. The tremendous success of the innovation forum of NASSCOM in the last couple of years has got not just innovative startups a place in the sun but also recognized the success of product, process and business model innovation among larger Indian and even multinational players with the innovation awards being given by none other than President Kalam and Prime Minister Singh at the annual leadership conferences of the association. The commissioning of the study with BCG is recognition of the fact that the time has come to take instances of successful innovation and build an environment where an entirely new paradigm can be created, for all aspiring firms as well as the entire industry.
The recommendations of the report and the true imperatives for the coming months can broadly be grouped into three areas – at the firm level, diagnostic exercises on the present state of innovation activity and the path to reaching a desired state of extensive innovation need to be undertaken so that serious projects are planned and executed. New product creation in intellectual property oriented firms and process innovation to look at new delivery methods and collaboration with customers and partners should be attempted in all services firms. And finally, all the participants in the eco-system – the Government, Research and Academic institutions, financing agencies in addition to the firms and the association need to work in concern to build an enabling environment for innovation. The formation of innovation clusters – It for automotive innovation in Pune and IT for Telecom innovation in Chennai for example – could be one step in the right direction where the ability to multiple the velocity of innovation can be demonstrated and then proliferation through chosen clusters in a variety of locations and industries.
Dr. Mashelkar, eminent scientist and scientific administrator, in cautioning the industry that it was better to aim high and fail rather than aim low and achieve, hit the nail on the head – the industry has had a marvelous decade with revenues growing tenfold and has demonstrated abundant resilience and the capability to reinvent itself and look at new avenues of growth in both IT and BPO. The possibilities in the next decade are enormous but so are the challenges and it will need innovative thinking and innovation in action for the trailblazing growth to continue!
Its not that innovation is a new mantra for this industry. The tremendous success of the innovation forum of NASSCOM in the last couple of years has got not just innovative startups a place in the sun but also recognized the success of product, process and business model innovation among larger Indian and even multinational players with the innovation awards being given by none other than President Kalam and Prime Minister Singh at the annual leadership conferences of the association. The commissioning of the study with BCG is recognition of the fact that the time has come to take instances of successful innovation and build an environment where an entirely new paradigm can be created, for all aspiring firms as well as the entire industry.
The recommendations of the report and the true imperatives for the coming months can broadly be grouped into three areas – at the firm level, diagnostic exercises on the present state of innovation activity and the path to reaching a desired state of extensive innovation need to be undertaken so that serious projects are planned and executed. New product creation in intellectual property oriented firms and process innovation to look at new delivery methods and collaboration with customers and partners should be attempted in all services firms. And finally, all the participants in the eco-system – the Government, Research and Academic institutions, financing agencies in addition to the firms and the association need to work in concern to build an enabling environment for innovation. The formation of innovation clusters – It for automotive innovation in Pune and IT for Telecom innovation in Chennai for example – could be one step in the right direction where the ability to multiple the velocity of innovation can be demonstrated and then proliferation through chosen clusters in a variety of locations and industries.
Dr. Mashelkar, eminent scientist and scientific administrator, in cautioning the industry that it was better to aim high and fail rather than aim low and achieve, hit the nail on the head – the industry has had a marvelous decade with revenues growing tenfold and has demonstrated abundant resilience and the capability to reinvent itself and look at new avenues of growth in both IT and BPO. The possibilities in the next decade are enormous but so are the challenges and it will need innovative thinking and innovation in action for the trailblazing growth to continue!
Building an Innovation Ecosystem
An ongoing study into the innovation imperatives and processes for India's IT and BPO Industry undertaken by the Boston Consulting Group NASSCOM postulates that a vibrant eco-system for innovation needs the active participation of five key players – the government, educational institutions, financing agencies, industry associations and the firms themselves. While the most active relationships between all the five can be seen in Silicon Valley in the USA, where the active role of institutions like Stanford and Berkeley have spawned a whole breed of new economy entrepreneurs, angel investors, venture capitalists and private equity firms have been quick to fund new ideas and teams, and companies themselves have showed that they have what it takes to dream big and succeed – nationally and globally.
It could be argued that the role of government agencies in the US has been very much in the background and there are no associations with even a fraction of the popular support that NASSCOM enjoys but the strength of the other three key constituents has enabled an eco-system to evolve that is the pride of the entire technology community today, not just in the USA but internationally. In different contexts, the government too has played a stellar role – Singapore, Israel and Taiwan are shining examples of entire industries being supported by proactive government policies. In our country too, the Government has moved very effectively from passive support in the early years when a nascent software export industry flourished under the benevolent watch of Secretary Vittal. The STPI scheme formulated in those days led to the flourishing of hundreds of companies in multiple cities as it embraced a near virtual model that enabled small companies to establish units that could enjoy the tax relief and gradually aspire and attain maturity and growth. The wisdom of three IT Ministers in the last decade and the visible support of successive commerce and finance ministers has ensured that the crown jewel of India’s global success continues to shine.
The presence of an active association like NASSCOM with the widespread support it enjoys from most of the IT and BPO firms in the industry, is perhaps the biggest pillar of future success in innovation that the country can enjoy. Under able professional leaders like Dewang Mehta and Kiran Karnik, with the active support of successive industry leaders who have chaired the executive council and taken the association to greater heights, this association has the potential in the remaining years of this decade to extend its reach from companies to individuals, from overseas ambassadorship to country-wide evangelism and achieve what one worthy participant in the innovation forum has called ‘an information tone for every Indian’.
A sector vital to the Indian IT sector is the SME sector which contributes a fountain of new ideas , many of which are extremely innovative and enable the creation of new enterprises. NASSCOM’s focus on the emerging companies in this decade has resulted in many small companies achieving national and international success and the future will surely belong to these young companies, set up by intelligent and enterprising entrepreneurs with stars in their eyes and the confidence that they have what it takes to be successful in the face of global competition. The good news is that while invention typically happens at the top of the pyramid in any industry sector, innovation can happen anywhere and history shows that the best innovation germinates in the mind of imaginative young entrepreneurs. With the right mentoring, timely does of seed, angel and venture finance and supportive Government policies , there is no stopping India’s IT and BPO SMEs as they aspire to their own place in the sun.
What else is needed to enable a true innovation eco-system to flourish? Can the enthusiasm of individual entrepreneurs and some innovative firms overcome the malaise that persists in the education system and succeed in an environment when angel funding and early stage capital is just showing the stirrings of life after a decade long hiatus? We will continue this discussion in subsequent blogs!
It could be argued that the role of government agencies in the US has been very much in the background and there are no associations with even a fraction of the popular support that NASSCOM enjoys but the strength of the other three key constituents has enabled an eco-system to evolve that is the pride of the entire technology community today, not just in the USA but internationally. In different contexts, the government too has played a stellar role – Singapore, Israel and Taiwan are shining examples of entire industries being supported by proactive government policies. In our country too, the Government has moved very effectively from passive support in the early years when a nascent software export industry flourished under the benevolent watch of Secretary Vittal. The STPI scheme formulated in those days led to the flourishing of hundreds of companies in multiple cities as it embraced a near virtual model that enabled small companies to establish units that could enjoy the tax relief and gradually aspire and attain maturity and growth. The wisdom of three IT Ministers in the last decade and the visible support of successive commerce and finance ministers has ensured that the crown jewel of India’s global success continues to shine.
The presence of an active association like NASSCOM with the widespread support it enjoys from most of the IT and BPO firms in the industry, is perhaps the biggest pillar of future success in innovation that the country can enjoy. Under able professional leaders like Dewang Mehta and Kiran Karnik, with the active support of successive industry leaders who have chaired the executive council and taken the association to greater heights, this association has the potential in the remaining years of this decade to extend its reach from companies to individuals, from overseas ambassadorship to country-wide evangelism and achieve what one worthy participant in the innovation forum has called ‘an information tone for every Indian’.
A sector vital to the Indian IT sector is the SME sector which contributes a fountain of new ideas , many of which are extremely innovative and enable the creation of new enterprises. NASSCOM’s focus on the emerging companies in this decade has resulted in many small companies achieving national and international success and the future will surely belong to these young companies, set up by intelligent and enterprising entrepreneurs with stars in their eyes and the confidence that they have what it takes to be successful in the face of global competition. The good news is that while invention typically happens at the top of the pyramid in any industry sector, innovation can happen anywhere and history shows that the best innovation germinates in the mind of imaginative young entrepreneurs. With the right mentoring, timely does of seed, angel and venture finance and supportive Government policies , there is no stopping India’s IT and BPO SMEs as they aspire to their own place in the sun.
What else is needed to enable a true innovation eco-system to flourish? Can the enthusiasm of individual entrepreneurs and some innovative firms overcome the malaise that persists in the education system and succeed in an environment when angel funding and early stage capital is just showing the stirrings of life after a decade long hiatus? We will continue this discussion in subsequent blogs!
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