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!
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
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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:
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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.
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.
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