In search of success

When the monarch of the ancient Mediterranean kingdom of Lydia planned an

attack on the great empire of Persia, he sent messengers to the Temple of Apollo

at Delphi to seek the Gods’ prophesies about the war. After communing with the

Deity, the Priestess of Apollo sent this message back to the King: ‘If you

attack Persia, a great empire will fall.’ Emboldened by this prophecy, Lydia

attacked Persia, only to face swift and total defeat. The Pythian priestess had

been right indeed; but the great empire that fell was not Persia, but Lydia.

"While the IT industry is obsessed with the threat from China, the real stumbling block may well be the shortsightedness of policymakers in our own country "

This problem of operating with fuzzy data has been one that has plagued

kingdoms and civilizations through the ages and indeed affects the fortunes of

many industries even today. While the IT industry is obsessed over the threat

from China, the real stumbling block may well be the shortsightedness of

policymakers in our own country with their Hamletian postures on the tax

exemption issue that brings about a decline in the fortunes of the IT services

industry and nips the nascent BPO industry in the bud. And from a purely

external perspective, it may well be the Philippines or even Vietnam which

emerges as a potent threat to our global fortunes while we wait for the Chinese

to learn English. While all this may be mere hyperbole with little impact on the

short term fortunes of the industry, it is worth understanding the mood of

global CIOs and the impact this is  likely to have on the IT and ITeS

industries. A Morgan Stanley survey of a couple of hundred CIOs points to 2003

being "a year of stabilization in spending after two years of belt

tightening". Does that sound paradoxical when compared to the robust

optimism in India? Not really if one analyses what the imperatives for the

global CIO community will be during the year. While consulting and systems

integration continues to be the major focus for most CIOs, one in five CIOs

polled talk about offshore services as one of the top spending priorities for

the year. And no prizes for guessing that BPO itself or even the off shoring of

managed services does not figure in the CIOs list.

The bottomline then for the Indian IT industry is that this is definitely

going to be a year when outstanding providers of offshore capabilities–for

maintenance, migration, management, and processing can expect the floodgates to

open progressively during the year. The new business however will not come to

the "me toos", but only to those who are either already in the first

consideration set or can demonstrate a value proposition that excites the

imagination of the hard pressed decision makers from the US and Europe. There is

no reason for the "sub-scale" companies to lose heart–the very size

of the big boys can sometimes become their Achilles heel and only solid domain

and technology competence and a demonstrated capability to understand and craft

solutions to meet the customer’s needs can win more deals than just flaunting

size in the global markets.

So what are the areas for the IT Services firms to build differentiated value

propositions in the New Year? Predictably, the CIO survey shows security

software still at the top of the priority list, while employee and customer

portals, web-services, and migrations to Microsoft follow. And while CRM, ERP,

and EAI initiatives still figure in the list of half the CIOs, there is little

or no appetite for SCM and procurement software and investments in CAD/CAM and

even new Java applications servers. But before you run out and set up new

companies focused on these areas, it would be wise to remember that in difficult

times where tight purse strings are the order of the day, it needs extreme focus

and excellent marketing to get the customer in through the door. Good hard

selling is still going to be the only way!

The author is the global CEO of Zensar Technologies ganesh@dqindia.com