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On the client side, while the economy seems to be heading towards stabilisation with banks and financial institutions having better control and understanding of their portfolio risks and earnings, after having gone through a devastating phase of capital destruction, economists believe that growth is unlikely to happen in a hurry. Many organisations focused on the longer term are looking at the difficult economic environment as a possible opportunity to innovate and push growth.
Customers are looking for direction and leadership on how to turn the present challenge into a strategic opportunity. And every business leader is under challenge to deliver sustainable growth and generate cash. For Indian IT companies, this spells a huge opportunity.
The Indian IT offshoring industry is witnessing a radical shift from what it has been traditionally asked to deliver. Technology and process expertise have become comfort factors. Top-tier service providers get invited for deals because they have such factors firmly in place.
However, to win business, they are required to demonstrate transformation thinking and capabilities and sharp insight into their business challenges and priorities. The competitive arena and its accompanying success factors are getting dramatically redefined. Some of the customer priorities that will need to be addressed by the Indian IT industry in order to remain relevant in the post-recession world are as follows:
Go global: Client organisations have to find new markets and develop customised products and services to be successful in these new markets. There is no choice but to globalise and do it on a large scale. Organisations such as GE and Dell have done it. However, there exist hundreds of medium to large organisations that have not globalised from a demand and/or supply perspective, which are both critical for growth and sustained success. Indian IT firms have to be proactive in helping customers enter new markets by offering new capabilities.
Cost structure: Organisations have to fundamentally change their cost structures and achieve breakthrough reduction in their operating cost. For example, shared services designed and delivered on standardised IT platforms can take out massive operational costs across HR, finance, procurement and IT. This, coupled with a global delivery model, can deliver breakthrough reduction.
CFO as stakeholder: The CFO’s role is becoming strategic and undergoing transformation with unprecedented demands being placed on the person to deliver liquidity, cash protection, risk management, innovation and growth. The CFO is moving from being a goal keeper (operations and risk management role) to a frontline striker (business strategic growth and innovation role). Indian IT offshorers will have to make the CFO connect and get in the front with innovative ideas. Opportunities could range from transforming a client’s IT assets into revenue-generators and creating a revenue generation model, to leveraging of captive operations and data centres as cash generation opportunities.
Simplify business: The slowdown is a good opportunity for CIOs to simplify IT architecture and reduce redundancies and complexities. Indian IT offshorers should advocate and propose relevant business pro-cess redesign and architecture simplification initiatives that will drive earnings and profitability for clients in the next decade.
In sum, anticipating and building capabilities is becoming imperative to staying relevant to the customers in the post-recession world. New customer demands would need sales force reconfiguration and more consulting-oriented selling. Considering that execution would remain the key success factor, the right tack for offshorers may well be to balance the consulting and execution focus to retain competitive edge in the global IT industry.
The writer is senior manager, banking and financial services practice at Cognizant. The views expressed are personal
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