How is India Inc Surviving?

Survival Strategies Diversify or Die The BPO route Riding the Offshore Outsourcing Wave Rein the Expenses

For an industry accustomed to 100 per cent year on year growth, the slowdown threatened to wield a death-blow. India IT Inc was, however, quick to reorganise in the face of a sudden drop in IT spends, declining billing rates and growing customer demands. Rather than adopt a wait and watch policy, the smart players made aggressive moves to retain market share. Last fiscal's 30 per cent year on year growth in the face of a crippling global recession is no mean achievement for the Indian IT industry. AssureConsulting.com bring its readers four strategies which have helped companies buck the downtrend and record growth.

Strategy: Diversify or Die: In the last one year, large Indian companies have made concerted efforts to alter their export profile and capture mind share in non-US markets. The efforts are paying off. A host of Indian service companies are now bagging large orders from Japan and Europe.

Strategy: The BPO route: This site has consistently argued that ITES is not IT but with the BPO sector growing at a rate of 73 per cent in 2001-02, as against 14 per cent for the overall IT industry, Indian IT companies extended existing infrastructure to foray into BPO. The long-term impact is beclouded but the strategy will add to the companies topline revenues.

Strategy: Riding the Offshore Outsourcing Wave: India IT realised that its beleaguered customers were scouting for a high value low cost destination and made a remarkable turnaround from a predominantly onsite business model to an offshore centric model. TCS' recent success in bagging a $1 million order from GE Medical Systems makes this strategy a sure winner.

Strategy: Rein the Expenses: Layoffs, salary cuts, smaller bonuses may have de-glamourised IT but in the face of falling revenues companies were more keen on survival than image upkeep.

The strategies have seen the emergence of a more mature and wiser industry. World-wide economies are reeling and CEOs of global bellwerthers have postponed recovery to 2002. A recent Gartner report on the Indian IT scenario has ruled out any optimism of robust growth for the sector up to 2005 but makes a positive note that the industry will continue to report double-digit growth. That's bitter sweet news, but most IT companies are now more stable and prepared for the long haul.

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