B2B WAP: The New Paradigm

The

transformation of Silicon Valley is complete. As a regular visitor to the Valley

for the last decade or so, it seems as though several lifetimes have been

compressed into just this decade and one can almost map the seeding–the early

rise, the halcyon years and now, the painful slowdown. The latest morbid joke

doing the rounds from San Jose through Santa Clara to San Francisco is that

every quarter has a new definition for B2B.

In April 2000, it was business-to-business e-commerce. Sometime around July

2000, when dot-coms declined, it became back to banking. Then, when layoffs

started, it became back to Bangalore. And now in what seems to be the ultimate

agony, a new name has evolved–B2B WAP, which they say is back to bench without

a project! One of the most compelling pictures depicting the ongoing slump was a

cartoon by the discerning RK Laxman–showing an old beggar shifting his spot

from the Dalal Street building in Mumbai, fearing that talk of the stock

exchange crash would actually come true.

What can you say of a market where the Dow Jones goes up 400 points and the

Nasdaq records its third-highest gain just because one company meets its numbers

and promises not to retrench people? And this is despite the fact that it

quickly clarifies that it won’t stick to its earlier plan of 2,000 new

recruitments… the following day, the market does a nosedive because a few

negative numbers pour in.

Back home, the bears are salivating at the number of reasons provided to them

to keep pulling stock prices down. If the Nasdaq is not a good reason on a given

day, there is always the broker scam and if both seem stable, the government is

sure to chip in and cause one ‘tehelka’ or the other.

The re-engineering opportunity

But why waste precious column centimeters on the vagaries of the stock

market? One reason: it’s hard reality that the present situation in the US is

near-recessionary. It won’t be before the next few weeks that one will get to

know if the much promised third quarter revival will really happen and whether

those running IT companies should start looking at the ‘newer economy’ jobs.

The optimists may please hold on; I’m not hinting at the biotech space, it’s

the single-digit dollar-per-hour salaries at US health clubs or burger joints

that I’m talking about! Reports emanating from the silicon state of Andhra

Pradesh have indicated that over 300,000 Indian software engineers have been ‘benched’

in the US between November 2000 and January 2001. In view of one senior official

of the Hyderabad Software Exporters Association, a majority of them–about 80%–are

from Andhra Pradesh.

As an eternal optimist, I firmly believe that there is no reason to worry and

this situation presents a real opportunity for every firm and every visionary

CEO to re-engineer business models and give customers and stakeholders the value

for their money.

Let’s see how this can and should happen. One, in the current market

situation, it would be wise to focus on the technology-absorbing sectors like

financial services, healthcare and manufacturing. Over dependence on the

technology-producing sector–IT services firms in the US and Europe or even the

once hyped telecom and wireless sector–should be avoided. Much has already

been said on the need for vertical focus and domain skills building, so crucial

to make a major dent in the Fortune 1000 user community.

Yet, most Indian firms have been comfortable preparing themselves to move up

the technology value chain through partnerships with global vendors, rather than

the real value chain, which demands working in close association with CIOs of

large organizations. Only then can the business as well as technology concerns

be realistically addressed.

I've found that in the US, there is as much demand for business process

re-engineering and quality improvement consulting as the ongoing need for

support in offshore maintenance, development and customer support. Also there is

an equal interest in knowledge management and in extending Oracle financials and

SAP Systems to the e-commerce landscape. The implication of all this has been

that tremendous retraining and development of multiple skill-sets of both

technical manpower and domain experts has been called for, thus leading to

better consultants and a more satisfied customer.

Horror story, inflection point

The alarm bells don’t bode very well for the computer training industry

either. Reports emanating from Hyderabad have also pointed out that 600 of the

1,300-odd training institutes are planning to close shop and others are

pondering over reducing both the frequency and the length of their courses in

the face of the weak demand expected this summer. Their most zealous customers,

the IT-struck teenagers, find their dreams clouded by horror stories of their

brethren in the land of Uncle Sam. This may well be another inflection point for

the private computer training industry, which has been through three such points

before.

The first was in the late eighties, when pioneers like NIIT and Aptech proved

that there was value in long-term career courses, which could successfully train

students for computer applications and co-exist with the formal sector and its

computer science offerings. The second came in the second half of the last

decade, when short-term technology courses became the first choice of software

wannabes.

The third was the e-learning wave at the turn of the century. Unfortunately,

not just in India but also anywhere in the world, a host of e-learning firms

quickly plummeted from the peak of inflated expectations to the trough of

customer disillusionment–the e-learning wave failed to live up to

expectations.

This is not just a challenge for the private training industry but also for

the host of universities conducting undergraduate and postgraduate courses in

computers and the clutch of IIITs that rode the wave of ‘IT is India’s

Tomorrow’ slogan. All of them will have to focus on providing real value,

going back to basics to create good software engineering fundamentals and a

healthy mix of business application knowledge as well as technology buzzwords.

Students will also need to take a long and hard look at realities beyond the

front office and the brand, and look at the merits of the institute they choose

to pay their parents’ hard earned money to. A track record of good placement

and well-qualified faculty members capable of preparing them for the vagaries of

the industry need to be reinforced in their minds to ensure that they get value

for money from their career investments.

The real customer

With the downturn in the US economy also beginning to affect other export

markets, maybe there is also a new opportunity for the software industry to turn

some attention and earmark resources toward meeting the needs of the

often-ignored domestic industry.

The common-sense approach that most organizations should take is to focus on

their core business capabilities and provide increasing and compelling value to

their present and future customers. Beyond all the hype that has pervaded the

dot-com era and the overheated tech marketplace, there is a real customer out

there with real concerns that have to do with revenue maximization and cost

minimization. This is the time for the Indian infotech industry to focus on

these real issues and come out with some real solutions.

Ganesh Natarajan



former president of Aptech and a founder-director of BConnectB, is deputy

chairman and managing director of Zensar Technologies.