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Nostradamus, Go Away!

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DQI Bureau
New Update

Now that the battlelines have been drawn to mark hatred between countries,

communities and self-proclaimed good and evil, it is time to take stock of what

the current state of political and military affairs can mean to the world at

large and information technology in particular. The "twin brothers"

that represented Capitalism to the world have been brought down in a tragic

assault that shocked the world and resulted in fierce need for revenge in the

American leadership and people. Stock markets have predictably been the first to

feel the impact and all sops provided by market regulators and central banks

have failed to allay the prophets of doom who have predicted a prolonged

recession in America and the world!

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What does this mean for India’s fledgling IT industry? I was invited

recently to speak before some bright students at the Indian Institute of

Information Technology, Bangalore. The topic set, probably with some Nostradamic

prescience, was "How to Bloom in Times of Gloom". Even he expressed

surprise at the heightened sense of gloom evident at the time of the lecture,

just a few days after the September 11 targedy. It was interesting to note that

while the industry itself was full of prophets of doom, Indian youth still

approached the future with a degree of confidence. In fact, two bright students–they

had been asked to set up innovative companies within the institute–were full

of excitement at their prospects despite the visible slowing down of interest

from their global customers. The discussion we had there, which I believe has

immense value for the entire software industry, hovered around the need for new

models, new partnerships and indeed a new approach to customer development and

retention in the tough times that lie ahead.

Recognizing new Opportunities

Ganesh Natarajan 



is deputy chairman and managing director of


Zensar Technologies and the global CEO of Zensar

“The rush to Europe will not help those who used to think that the world began in New York and ended at the San Francisco border”

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In any time of major economic slowdown and war noises, it is inevitable that

corporations slap a freeze on major new initiatives and that includes new

systems integration, enterprise application integration and software

applications. That is why it will need a hundred Nostradamuses to predict

exactly what kind of revenues the Indian industry can now aspire to make in the

short and medium terms, as also where the markets will be–Europe, South-East

Asia or China? Many industry players who felt that the world began in New York

and ended in San Francisco have already pressed the panic button and the

slowdown that is evident and likely to be prolonged across the European customer

base shows that the kneejerk "Europe chalo" slogan can’t take us

very far either.

In this situation, there are three imperatives for every

software player and wannabe:

  • The days of horizontal technology experts are over and

    those who still believe that a battalion of Microsoft-certified engineers

    and Oracle DBAs overseen by a dozen legacy experts constitute a winning

    formula, will need to quickly change gears and find specific industry

    verticals to focus on. As of now, customers in need of solutions ranging

    from business process reengineering to work-flow optimization, information

    architecture design to software development and maintenance, or business

    process outsourcing to e-CRM are all looking for an Indian expertise. The

    opportunity therefore exists for Indian firms to choose a few verticals and

    offer a full range of solutions in those areas.

  • The time is also at hand to revisit the

    products-versus-services argument. When a student asked me which company I

    admired most in the Indian software industry, I had no hesitation in saying

    "I-Flex". Here is a company that has succeeded–through

    single-minded focus and passion–where many of the more illustrious

    software firms have tried and failed. In today’s times, where every

    company is looking for quick solutions that can be personalized with the

    minimum fuss and effort, it is imperative for every solutions company to

    move beyond the services domain to offering at least quick-to-install

    templates if not full-blown products for their chosen customer verticals.

  • Last but not the least is the need to plan for such

    things as object libraries and technology agnostic components. This will

    help companies make software up and running in the shortest possible time,

    through an extensive use of reusable objects and omponents. We will look at

    this area in more detail in subsequent articles in this column.

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What will this new approach achieve? At the very least, it

will reposition the entire industry from its current status as a low-cost

alternative to the US and Europe development facilities to a full service

provider of ready-to-use and quick-to-implement solutions to a large cross

section of global industry segments. When fully implemented, India will emerge

as a complete technology partner to the first world.

Enter the inhibited

During a slowdown, it is inevitable that CEOs and even

industry watchers become complacent, assuming that poor performance is

inevitable and the only thing to do is to hunker down and wait till the storm

blows over. But such an attitude can be deleterious for the Indian software

industry. Note the mature response of the Japanese prime minister to the current

global crisis, when he stressed the need to focus on economic basics. And it’s

not just Japan. Countries like China, the Philippines and the more progressive

East European countries like Hungary, Poland and of course Russia are striving

to become English-savvy so as to compete much more effectively for the

mind-share of the US and European CIO.

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A situation like this will surely mean that the Indian wage

arbitrage advantage will be lost or at least shared with countries like China

and Hungary. And Indian companies will have to arrive at the pole position on

the value chain to maintain both profitability and revenue growth in the years

to come. There are also opportunities here for collaboration between like-minded

companies in Singapore, Hong Kong and Hungary to present a joint front to the

world. The idea may appear hard-to-implement but needs to be put to work if

India were to both sustain and enlarge its competitive position in the global

software industry.

To the myopic, this may sound like a dangerous strategy, but

the benefits of partnering with Chinese, Russian or Hungarian companies can be

enormous.

Such moves will give Indian companies the ability to gain and

exploit complementary skills for global markets, expand on the home turf, and

gain greater market access in Western Europe and the US through the partnering

company.

While prophets of doom have been working overtime to churn

out details of a gloomier tomorrow, another school of thought believes that the

need for a war against global terrorism or the need to rediscover new economic

and transformation models for a new world is anyway around the corner. And Osama

Bin Laden has only accelerated the need to face the challenge and find

solutions. Nostradamus books may have been sold out in all bookstores, but it

certainly does not need a Nostradamus to predict that all of us have to embrace

change and make the transition. That is the true challenge for our people, our

companies and indeed our country if IT has to become India’s tomorrow!

Ganesh Natarajan is

deputy chairman and managing director of Zensar Technologies and the global CEO of Zensar

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