In the midst of recession, indian it firms made radical transformations in their business models. now it’s time to do the same for their brands
By the time you read this, the chop shop fiasco and the resulting outrage would probably have sobered down. But reasons to doubt American intentions on being a responsible trade partner with India have only become stronger. A well chosen terminology and a smartly chosen target (if Infosys is a chop shop, it essentially can be interpreted to mean the entire Indian IT industry) has given Senator Charles Schumer the ‘15 minutes of fame’ he was looking for.
Such statements have more to do with American frustration over their current situation rather than the Indian IT sector’s credentials. But from the perspective of Indian companies, improving brand image and value proposition is definitely an issue for introspection. This is not about making the Schumers eat their words, scoring points, or ‘15 minutes of fame’. As discussed in a previous issue of 4Ps B&M, the cost competitiveness factor in the global IT sector is fast getting elusive with rapid commoditisation, and it would take some doing to ensure that these companies get back to the growth rates they once enjoyed.
Firstly, it makes sense to analyse the vantage point on which the ‘Made in India’ brand stands today. Nitin Khanapurkar, Executive Director, KPMG Advisory Services, comments, “They are no longer just low cost service providers or support functions. They are perceived to manage IT effectively and allowing businesses to concentrate on their core strengths.” Over time, these companies have moved from being application developers to developing strong vertical expertise, efficient India-centric delivery systems and of course low cost. More importantly, these companies have stood tall on standards of transparency, ethics and credibility, apart from the Satyam debacle.
Sreedhar Ramanujam, CEO, brand-comm, particularly admires how Infosys took that leap, “Infosys and its founder NR Narayana Murthy in particular kept talking about “ethics” and the way they handled the sexual harassment case gave credence to that.” Besides, Infosys led the way in showing that PR was more effective as compared to advertising. JP Singh, former MD, Bausch & Lomb India & now management consultant, comments, “PR can have high sanctity. User testimonials & key messages through PR can provide a complementary ‘surround’ effect.”
It was expected that the recession would seriously challenge the Indian IT players and expose the chinks in their armour; particularly the dependence on verticals and geographies. Indeed, when you look at the figures, the industry aggregated $73.1 billion in 2009-10., growing by 5.3% yoy (NASSCOM). This is quite subdued in comparison to a growth rate of 30.1% in FY 2007-08 (and NASSCOM also includes Indian subsidiaries of foreign companies like IBM, Accenture, et al). And yet, India remains an integral part of the offshoring strategy for around 51% of the addressable global market and plans to hire 90,000 more people in this year. Their approach to the recessionary phase has been to better serve their clients by improving operational flexibility, adopting radical pricing models, deepening client relationships and building new ones as well as getting adept at delivery through emerging technologies like cloud computing, virtualization and Service Oriented Architecture. Dinesh Sampath Rangaraj, Head, Business Marketing, MindTree Limited (which relied on traditional business models earlier), comments to 4Ps B&M on the shift, “Now, we’re creating business value through market-ready products, services and solutions with a non-linear business model (FP, risk-reward, based on output rather than input).”
By the time you read this, the chop shop fiasco and the resulting outrage would probably have sobered down. But reasons to doubt American intentions on being a responsible trade partner with India have only become stronger. A well chosen terminology and a smartly chosen target (if Infosys is a chop shop, it essentially can be interpreted to mean the entire Indian IT industry) has given Senator Charles Schumer the ‘15 minutes of fame’ he was looking for.
Such statements have more to do with American frustration over their current situation rather than the Indian IT sector’s credentials. But from the perspective of Indian companies, improving brand image and value proposition is definitely an issue for introspection. This is not about making the Schumers eat their words, scoring points, or ‘15 minutes of fame’. As discussed in a previous issue of 4Ps B&M, the cost competitiveness factor in the global IT sector is fast getting elusive with rapid commoditisation, and it would take some doing to ensure that these companies get back to the growth rates they once enjoyed.
Firstly, it makes sense to analyse the vantage point on which the ‘Made in India’ brand stands today. Nitin Khanapurkar, Executive Director, KPMG Advisory Services, comments, “They are no longer just low cost service providers or support functions. They are perceived to manage IT effectively and allowing businesses to concentrate on their core strengths.” Over time, these companies have moved from being application developers to developing strong vertical expertise, efficient India-centric delivery systems and of course low cost. More importantly, these companies have stood tall on standards of transparency, ethics and credibility, apart from the Satyam debacle.
Sreedhar Ramanujam, CEO, brand-comm, particularly admires how Infosys took that leap, “Infosys and its founder NR Narayana Murthy in particular kept talking about “ethics” and the way they handled the sexual harassment case gave credence to that.” Besides, Infosys led the way in showing that PR was more effective as compared to advertising. JP Singh, former MD, Bausch & Lomb India & now management consultant, comments, “PR can have high sanctity. User testimonials & key messages through PR can provide a complementary ‘surround’ effect.”
It was expected that the recession would seriously challenge the Indian IT players and expose the chinks in their armour; particularly the dependence on verticals and geographies. Indeed, when you look at the figures, the industry aggregated $73.1 billion in 2009-10., growing by 5.3% yoy (NASSCOM). This is quite subdued in comparison to a growth rate of 30.1% in FY 2007-08 (and NASSCOM also includes Indian subsidiaries of foreign companies like IBM, Accenture, et al). And yet, India remains an integral part of the offshoring strategy for around 51% of the addressable global market and plans to hire 90,000 more people in this year. Their approach to the recessionary phase has been to better serve their clients by improving operational flexibility, adopting radical pricing models, deepening client relationships and building new ones as well as getting adept at delivery through emerging technologies like cloud computing, virtualization and Service Oriented Architecture. Dinesh Sampath Rangaraj, Head, Business Marketing, MindTree Limited (which relied on traditional business models earlier), comments to 4Ps B&M on the shift, “Now, we’re creating business value through market-ready products, services and solutions with a non-linear business model (FP, risk-reward, based on output rather than input).”
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2011.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM B-School
Arindam Chaudhuri
Rajita Chaudhuri
Planman Consulting
IIPM Proves Its Mettle Once Again....
