Failure of Success

It was an induction session for new entrants into the company, a couple of

years ago (just before the peak of the IT boom).



Rather than go through the standard company introduction, I decided that a more
effective way of getting the message across would be to have an open discussion.

"I think the Indian software industry is a failure," I said.

"Anybody disagrees? Any comments?"

After a stunned silence and some initial hesitation, the hands went up and

the discussion gathered steam. " Why would you call a consistent growth

rate of over 50% year after year a failure?" asked someone in the audience.

"After so many years of consistent rapid growth, our country’s share

of the global software market is under 2%," I said.

"Congratulations!"

"Many of our companies have the highest quality certification in the

world!" exclaimed another member of the audience.

"Yes, SEI-CMM Level 5, ISO-9000, great! But has that translated into

market share? Neither Microsoft, Oracle nor SAP has any high quality

certification, but each one is bigger than our entire industry put

together!"

"Even Microsoft, Oracle and SAP are now beginning to get their software

developed in India!"

"We have the cost advantage. More and more Fortune 500 companies are

sourcing their software from India."

And so it went, back and forth. I was taking a deliberately provocative

stance to stimulate the discussion, but it served to set the stage for the theme

of my talk–i-Flex, our corporate strategy, and its rationale.

While my thesis was designed to provoke an active discussion, I do feel that

it is not without an element of truth. Don’t get me wrong. I am extremely

positive about the performance and the future of the Indian software industry,

even more so in the current global economic environment.

But while our industry is a success by any standard, our success so far has

not come without cost. The value proposition to our customers is still based

primarily on a cost advantage which is fast disappearing. We have not

diversified our markets and are overly dependent for our revenues on the

economic health and visa regulations of a few countries. And while our track

record of growth is exceptional, our global market share is still small. How can

we ensure that our business model continues to scale?

By building the "Made in India" brand as one of high value rather

than low cost; diversifying our customer base to reduce risk and sustain growth;

building long term customer relationships which can stand the strain of

competitive pressures and economic turbulence and creating lasting value through

ownership of intellectual property.

R Ravisankar is CEO, International Operations and Technology, i-Flex

Solutions. He can be reached via mail@dqindia.com