Perspective 2020Toward New Beginnings and Great Outcomes

The stupendous success of the Nasscom India Leadership Summit demonstrates
that there is still great optimism in the Indian IT and business services
segment. A galaxy of outstanding speakers, from John Chambers of Cisco to
Rosabeth Moss Kanter and Pankaj Ghemawat of the Harvard Business School and
every CEO worth mentioning in our own industry had an audience of over a
thousand enthusiastic participants listening with rapt attention as the
conference tried to peep into the crystal ball and paint a short-term and
long-term picture of the industry and all its constituents.

The preview of the Perspectives 2020 Report presented by the McKinsey team
with an orchestra of support provided by the chairman and vice chairman of
Nasscom has clearly spelled out the numerous benefits that the growth of the
industry in the last ten years has delivered to the country. Tertiary education
in the key IT states has grown over six times, the opportunities for youth,
particularly young women has multiplied with women now constituting over 30% of
the knowledge workforce and over 45% of urban job creation can be directly
attributed to our industry thats a lot to be proud about. Most importantly, we
can all take pride in the fact that this is one industry that has put India on
the world map!

However, there are some dramatic shifts expected in the nature of work done
by software exporters that needs to be understood by all firms who do not want
their portfolio to be rendered obsolete by market shifts. Automation of basic
services will see popular present day services like voice based call centers and
even application development, support and testing go into a growth decline.
Rapid productivity gains and increasing standardization will limit the job
creation potential of the industry. Product and services innovation and even
process and business model innovation through the deployment of truly global
delivery models will be necessary for firms to shift from being arbitrage
players to true transformation partners, and global supply chains will need to
be set up for just in time recruiting at development centers established on a
global footprint.

All this will mean that industry players who want to survive the slowdown and
become leaders in the next wave of growth will have to consider multiple
step-out models. Companies can emerge as winners through four action sets. The
first set oriented at a rebalancing of customers and services portfolio will
call for end-to-end capabilities in recession resilient areas like healthcare as
a segment and BRIC as a market.  The second set will be an adaptive sales
offering like impact sourcing or a portfolio which targets the quick savings
sought by recession hit customers. The third set will be for operations and
delivery strengthening to bite 20-30% from the cost base of existing providers
and the fourth and final set would be to make strategic investments in
transformative acquisitions, strategic alliances and key markets like India.

An action agenda is clearly needed for the entire industry and its ecosystem
partners like the government and academic institutions. Catalyzing growth beyond
todays core markets will enable the reinvention of business models and the
development of new verticals and geographies, establishing India as a trusted
sourcing destination will need a wider location network. The worst is not over
yet for global economies. It will need a concerted focus on waste elimination
and capitalization on every sliver of opportunity, and those who are able to
deliver on this challenge will be the leaders of the next decade of Indian
knowledge services!

Ganesh Natarajan

The author is Chairman of NASSCOM and Vice Chairman & MD of Zensar
Technologies. He can be reached at
maildqindia@cybermedia.co.in