How is India Inc Surviving?
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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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