Moving up the value chain has been an aspiration for Indian IT brands for quite sometime now. Now it may well be deemed an unavoidable necessity!
To reach these big order deals and to gain the confidence of clients, Indian companies do need to urgently brand themselves now as value players. Chakraborti of Gartner laments the fact that not a single Indian IT company ranks among the top 100 brands of the world. In B2B branding of this nature, the most important differentiator is the branded product. Indian companies have to be up there leading some next wave of IT adoption now, rather than just playing catch up. That is how clients will identify their capability for big ticket deals. Leading firms are realising this. For instance, Infosys has created a research group called the Software Engineering and Technology Labs (SETLabs), which has developed numerous process frameworks, methodologies, service platforms and reusable knowledge objects. However, as Apte of Forrester points out, the innovations made by Indian companies are generally below the water line; as in they are more in the cost control arena. Clients, meanwhile, define innovation differently. Big ticket acquisitions can also stamp your authority on the world map, just as it happened for Tata with Corus and JLR.
Besides strengthening their base, it is also imperative for these companies to pay a lot more attention to client facing roles. Currently, as per analysts, there is a total neglect of the importance of marketing. Marketing people in these companies are mostly restricted in their role to documentation and proposal building. There has to be clarity in message and positioning by each player with respect to what they stand for. Chakraborti says, “Apart from a very few companies, it is restricted to participating in seminars, events, doing white papers; case studies et al. But marketing thinking is lacking. Creating credibility at multiple levels is necessary – India, Indian IT companies as a destination for outsourcing as well as the services they offer.” In that sense, controlling marketing costs, which Indian companies did in the tough recessionary phase, isn’t exactly what the doctor ordered. Admittedly, Indian IT majors have been ramping up on onsite and near-shore hiring over the past few years. They have to leverage that well.
However, it may be noted that we are mostly discussing the Big 6 here (TCS, Wipro, Infosys, HCL, Tech Mahindra and Cognizant). It is still quite hard to discount their ability to scale up and play on volumes. But the Indian IT sector has a very long tail following that. The challenges for this tail are even greater, as they have to quickly scale up to take strong positions in niche areas. Otherwise they may actually be on the wrong end of the acquisition bandwagon. But experts warn that the global M&A ball game is far from over. IBM has made 74 acquisitions in the business analytics space in a span of one year. Also, the recent acquisition of EDS by HP, Sun by Oracle and Satyam by TechMahindra have had significant impact on partnership models and IT SP strategy over the long-term. In addition, over the near-term, the industry could expect global players making a bid for Tier-2 Indian players and acquiring stake in a Tier-1 Indian IT SPs as well. Big IT is on the prowl; and if Indian players fail to enter the big league with huge promotional exercises, it could well prove a short life for their so called ‘low-cost’ brands. They have had their share of cheap; now it’s time to take their share of best!
To reach these big order deals and to gain the confidence of clients, Indian companies do need to urgently brand themselves now as value players. Chakraborti of Gartner laments the fact that not a single Indian IT company ranks among the top 100 brands of the world. In B2B branding of this nature, the most important differentiator is the branded product. Indian companies have to be up there leading some next wave of IT adoption now, rather than just playing catch up. That is how clients will identify their capability for big ticket deals. Leading firms are realising this. For instance, Infosys has created a research group called the Software Engineering and Technology Labs (SETLabs), which has developed numerous process frameworks, methodologies, service platforms and reusable knowledge objects. However, as Apte of Forrester points out, the innovations made by Indian companies are generally below the water line; as in they are more in the cost control arena. Clients, meanwhile, define innovation differently. Big ticket acquisitions can also stamp your authority on the world map, just as it happened for Tata with Corus and JLR.
Besides strengthening their base, it is also imperative for these companies to pay a lot more attention to client facing roles. Currently, as per analysts, there is a total neglect of the importance of marketing. Marketing people in these companies are mostly restricted in their role to documentation and proposal building. There has to be clarity in message and positioning by each player with respect to what they stand for. Chakraborti says, “Apart from a very few companies, it is restricted to participating in seminars, events, doing white papers; case studies et al. But marketing thinking is lacking. Creating credibility at multiple levels is necessary – India, Indian IT companies as a destination for outsourcing as well as the services they offer.” In that sense, controlling marketing costs, which Indian companies did in the tough recessionary phase, isn’t exactly what the doctor ordered. Admittedly, Indian IT majors have been ramping up on onsite and near-shore hiring over the past few years. They have to leverage that well.
However, it may be noted that we are mostly discussing the Big 6 here (TCS, Wipro, Infosys, HCL, Tech Mahindra and Cognizant). It is still quite hard to discount their ability to scale up and play on volumes. But the Indian IT sector has a very long tail following that. The challenges for this tail are even greater, as they have to quickly scale up to take strong positions in niche areas. Otherwise they may actually be on the wrong end of the acquisition bandwagon. But experts warn that the global M&A ball game is far from over. IBM has made 74 acquisitions in the business analytics space in a span of one year. Also, the recent acquisition of EDS by HP, Sun by Oracle and Satyam by TechMahindra have had significant impact on partnership models and IT SP strategy over the long-term. In addition, over the near-term, the industry could expect global players making a bid for Tier-2 Indian players and acquiring stake in a Tier-1 Indian IT SPs as well. Big IT is on the prowl; and if Indian players fail to enter the big league with huge promotional exercises, it could well prove a short life for their so called ‘low-cost’ brands. They have had their share of cheap; now it’s time to take their share of best!
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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