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.

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

overseas.

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 ganesh@dqindia.com