AIM for zero error

Nasscom 2002 turned out to be all that one expected for all the expected
reasons — there was the expected noise level about the tough situations that
prevailed in the second half of 2001. Then there were the expected prophesies of
a revival in the second half of 2002 and the usual panacea about moving up the
value chain to embedded systems and domain consulting on one hand and exploring
the seemingly never ending flow of business opportunity that is promised by
business process outsourcing on the other.

“As the outsourcing fever spreads, the expectations in the areas of pre-sale and delivery support will get higher and higher”


The ICT exhibition accompanying the conference turned out to be a damp squib.
Why does so much effort go into shows like these, which have so little to offer
to industry participants and customers alike?

One conference that provided almost equal value for money in a much more
compressed time frame was the Investor Camp organized by CNBC where some of the
doyens of the financial markets — veteran BSE broker Ramesh Damani,Kotak
Mahindra Mutual Fund’s Vetri Subramanian and CNBC’s Udayan Mukherjee brought
home an excellent perspective from the stock market. Here are some gems that
came through…

  • The relative value of a Dow Jones
    Investment to Gold Purchase has increased 33 times in the last 20 years, and
    people still buy gold.

  • The time to start selling in the
    stock market is when your mother-in-law is excited about good times in the
    stock market.

  • The magic of
    compounding is such that even steady and small investments made for the long
    term and not with a view to trade, can be the best way to get rich.

It should come as an encouragement to investors that the
market cap — sales multiple of good IT firms is still as much as 30 to 40
times that of some of the staid manufacturing firms. So, what really makes a
good IT stock a great investment? In Damani’s opinion, winning stocks and by
extension, excellent companies are those that are able to show consistent growth
over the medium term, have high quality of management as well as business, pay
their taxes and dividends regularly and focus on providing an excellent return
on capital employed in the business.

Quality of business can improve only if IT firms are willing
to invest in domain consulting and transformation skills rather than continuing
to be a ‘Nothing short of everything’ technology provider waiting for the
RFPs (requests for procurement) to peep in through the letterbox rather than go
out aggressively with new value propositions.

What does a customer really look for in the current context?
For the big boys, it may be enough if there is confidence that the software will
be delivered on time and with all bugs fixed prior to delivery. But as the
outsourcing fever spreads across a larger cross section of customers, the
expectations of pre-sale and delivery support will be substantially higher. This
is because customers whose world began and ended in the US, Germany or Australia
have suddenly discovered both the joys and teething troubles of getting their
software developed and their processes supported from a few thousand miles

In these highly competitive times, there is also the
imperative to treat on time delivery as a key component of the overall quality
management system. My friend MS Jayaraman, who runs a consulting firm in Chennai
has a favorite story about a seminar for ISO 9000 companies: The program leader
in the seminar asks the audience to comment on their companies’ adherence to
delivery schedules. A proud participant finally says “Close to 97%.”
The leader asks him to consider his own response if a doctor would give a
similiar answer, “We are very safe with all babies and only three out of
100 get dropped by the nurses!”

Deserves some thought, as Indian companies go beyond SEI CMM
Level 5 to Six Sigma and Total Customer Delight!

It would be important to remember this was the first big
Nasscom event after the demise of Dewang Mehta early last year. If today, every
global CIO worth her salt knows about the Indian offshore story and software
firms in India stay profitable and buoyant in spite of the markets slipping
beneath our feet, we have much to thank Dewang for. May his soul rest in peace.

The author is deputy chairman and managing director of Zensar
Technologies and the global CEO of Zensar.
He can be reached at

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